Independent Education Union of Australia v Catholic Church of the Diocese of Darwin Property Trust Incorporated T/A St John's College
[2022] FWC 796
| [2022] FWC 796 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
Independent Education Union of Australia
v
Catholic Church of the Diocese of Darwin Property Trust Incorporated T/A St John's College
(C2021/8749)
| COMMISSIONER RIORDAN | SYDNEY, 6 MAY 2022 |
Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)].
On 21 December 2021, the Independent Education Union of Australia (the IEUA/the Applicant) lodged an application (the Application) pursuant to s.739 of the Fair Work Act 2009 (the Act) for the Fair Work Commission (the Commission) to deal with a dispute with Catholic Church of the Diocese of Darwin Property Trust Incorporated T/A St John's College (the Respondent). The dispute relates to the interpretation and application of Clause 5.2 of the Catholic Schools (Northern Territory) Collective Enterprise Agreement 2018 – 2021 (the Agreement).
A conference was convened in this matter; however, it was unable to be resolved.
The Hearing took place on 29 March 2022 by video using Microsoft Teams. Mr John Spriggs appeared for the Applicant. Mr Chris Owens, Head of Professional Services, Catholic Employment Relations Ltd appeared for the Respondent.
Mr Anthony Odgers, Assistant Federal Secretary of the IEUA, appeared and gave evidence for the Applicant.
Relevant Provisions of the Agreement
The Dispute Settling Procedure is found at clause 3.2 of the Agreement as follows:
“3.2 Dispute Avoidance and Grievance Procedure
3.2.1 If a dispute relates to:
(a) a matter arising under the agreement; or
(b) the National Employment Standards (NES);
this term sets out procedures to settle the dispute.
3.2.2 An employee who is a party to the dispute may appoint, at any stage, a representative for the purposes of the procedures in this term.
3.2.3 In the first instance, the parties to the dispute must try to resolve the dispute at the workplace level, by discussions between the employee or employees and relevant supervisors and/or Principal or his/her nominee.
3.2.4 If the matter remains unresolved, it shall be referred to the Secretary of the relevant Union(s) covered by this Agreement, or his/her nominee, and the Director of Catholic Education Northern Territory or his/her nominee for discussion and appropriate action.
3.2.5 If discussions at the workplace level do not resolve the dispute, a party to the dispute may refer the matter to Fair Work Commission.
3.2.6 Fair Work Commission may deal with the dispute in two (2) stages:
(a) Fair Work Commission will first attempt to resolve the dispute as it considers appropriate, including by mediation, conciliation, expressing an opinion or making a recommendation; and
(b) if Fair Work Commission is unable to resolve the dispute at the first stage then with the agreement of both parties the dispute can be referred to Fair Work Commission to arbitrate the dispute with the determination binding on the parties.
Note If Fair Work Commission arbitrates the dispute, it may also use the powers that are available to it under the Act.
A decision that Fair Work Commission makes when arbitrating a dispute is a decision for the purpose of Div. 3 of Part 5.1 of the Act. Therefore, an appeal may be made against the decision.
3.2.7 Agreement for arbitration shall not be unreasonably withheld.
3.2.8 While the parties are trying to resolve the dispute using the procedures in this term:
(a) an employee must continue to perform his or her work as he or she would normally unless he or she has a reasonable concern about an imminent risk to his or her health or safety; and
(b) an employee must comply with a direction given by the employer to perform other available work at the same workplace, or at another workplace, unless:
(i)the work is not safe; or
(ii)applicable occupational health and safety legislation would not permit the work to be performed.
3.2.9 Nothing contained in this procedure shall prevent the Director of Catholic Education Northern Territory or his/her nominee or the Secretary of the relevant respondent Union or his/her nominee from entering into the discussion at any level either at the request of a member or on their initiative in respect of matters in dispute should such action be considered conducive to achieving resolution of the dispute.”
Clause 5.2 of the Agreement sets out the entitlements regarding Public Holidays:
“5.2 Public Holidays
5.2.1 An employee shall be entitled to holidays on the following days:
(a)New Year’s Day, Good Friday, Easter Saturday, Easter Monday, Christmas Day and Boxing Day; and
(b)the following days as prescribed in the Territory: Australia Day, Anzac Day, Queen’s Birthday and May Day;
(c)Show Day and Picnic Day as prescribed in the Territory or locality;
(d)when Christmas Day is a Saturday or a Sunday, a holiday in lieu thereof shall be observed which is generally observed in a locality as a substitute for any of the said days respectively;
(e)when Boxing Day is a Saturday or a Sunday, a holiday in lieu thereof shall be observed which is generally observed in a locality as a substitute for the said day;
(f)when New Years Day or Australia Day is a Saturday or a Sunday, a holiday in lieu thereof shall be observed which is generally observed in a locality as a substitute day for any of the said days respectively; and
(g)where in the Territory or locality, public holidays are declared or prescribed on days other than those set out in 5.2.1 (a) to (f), those days shall constitute additional holidays for the purpose of this Agreement.
5.2.2 Substitution of Public Holidays
(a)By agreement between the employer and the majority of employees, an alternative day may be taken as a public holiday instead of any of the days specified by the NES. The agreement will be recorded in writing and made available to every affected employee.
(b)Where substitution is agreed, the substituted day will be the public holiday for all purposes of this Agreement.”
Background
The issued identified by the Applicant in their Application were refined for the purposes of the Hearing as follows:
“This application, for current purposes, requests that the FWC determine the rate to be paid for casual boarding services employees (subject employees) for ordinary hours directed to be worked on a public holiday.”
The position advanced by the Respondent is that on the ordinary meaning of the words used in the Award, the minimum hourly rate is exclusive of the casual loading and the public holiday penalty rate is payable to all employees at 250% of the minimum hourly rate.
The position advanced by the IEUA is that the cumulative method (which involves the casual loading being added to the public holiday penalty) should be used.
Applicant’s Submissions
The Applicant cited relevant clauses of the Agreement as follows.
Clause 1.3 of the Agreement provides the Agreement’s relationship to Awards:
“1.3 Relationship to Awards
1.3.1 The conditions of employment of Catholic Education employees under this Agreement will be those prescribed by this agreement and those prescribed by the following awards:
(a) Educational Services (Teachers) Award 2010;
(b) Educational Services (Schools) General Staff Award 2010;
(c) Nurses Award 2010;
(d) Children Services Award 2010.
1.3.2 To the extent of any inconsistency between this Agreement and any of the Awards listed above, this Agreement shall prevail. In all other circumstances the provisions in those Awards will continue to apply.”
(My emphasis)
As to casual employee pay rates, clause 13.7.1 (b) of the Agreement provides:
“A casual employee shall be paid for all time worked at an hourly rate calculated as per clause 4.2 at the appropriate rate of pay for the classification in which engaged, plus 28 per cent.”
(My emphasis)
Clause 4.2 of the Agreement provides:
“4.2 Hourly Rates
The formula to be used for calculation of hourly rates of pay for all non teaching employees shall be:
Annual rate ÷ 26.089 ÷ (ordinary hours worked per fortnight) = per hour rate.”
The Applicant submitted that in absence of the Agreement, the employees the subject of this dispute, would be covered by the Educational Services (Schools) General Staff Award (the Award).
The Applicant noted that clause 13.7.1 (Casual employees) of the Agreement, is silent in relation to the rate to be paid to the subject employees for working their ordinary hours on a public holiday. Therefore, by virtue of clause 1.3 of the Agreement, the provisions of the Award apply.
The Applicant provided that in relation to payment for work performed on a public holiday, the Award at clause 28.2 provides:
“An employee required to work on a public holiday will be paid 250% of the minimum hourly rate for ordinary hours worked, unless the employer and the employee have agreed to the employee taking a day off instead of payment in which case the employee will be paid the minimum hourly rate for work on the public holiday.”
The purpose of a casual loading
The Applicant observed that the purpose of casual loading is not that of a penalty rate and made reference to the 4 yearly review of modern awards – Overtime for casuals [2020] FWCFB 5636 at [24]. The Applicant submitted that any argument based on the concept of a penalty on a penalty (or sometimes called ‘double dipping’) is irrelevant.
The Applicant submitted that the fundamental basis of the existence of a casual loading is to compensate a casual employee for a number of benefits that such an employee does not enjoy because of the casual nature of their employment. Such benefits include: the majority of the forms of paid leave, severance payments, plus an unquantifiable component for certainty.
The Applicant further submitted that an ongoing employee would accrue entitlements based on all of their ordinary hours of work, including those performed on a public holiday, thereby, a casual employee should, conceptually, receive the casual loading for all of their ordinary hours of work, including those performed on a public holiday.
The Applicant concluded that it would be unfair in the extreme for a casual employee to be deprived of the recompense prescribed by the applicable industrial instrument for the absence of a range of benefits where some of their ordinary hours happen to be worked on a public holiday.
Guidance from recent Full Bench decisions
The Applicant accepted that there is a difference between overtime and payment for ordinary hours on a public holiday, however, submitted that the concepts endorsed by recent Full Benches are relevant.
The Applicant submitted that, in essence, the “4 yearly review of modern awards” decisions indicated that the Commission had a preference for the ‘cumulative’ method of reflecting the interaction between the casual loading and penalty rates as opposed to the ‘compounding’ method.
The issue of implementing penalty rates for casual employees was extensively and definitively dealt with by a Full Bench of the Fair Work Commission as part of the “4 yearly review of modern awards”. The Applicant submitted that the Decision handed down on 30 October 2020 ([2020] FWCFB 5636) is a useful reference, and provides:
“These are traditional industrial expressions which have a traditional meaning. The “time” referred to is the rate of pay that would be payable to the employee for ordinary hours. In the case of casual employees, the ordinary time rate is inclusive of the casual loading. Therefore, the overtime rate is calculated by reference to the ordinary time rate inclusive of that loading, unless there is some provision which expressly indicates otherwise. That means that the casual loading is included in the overtime rate on a compounding basis.”
(Applicant’s emphasis)
The Applicant made further comment on the phrase “unless there is some provision which expressly indicates otherwise”. The Applicant submitted that the correct interpretation is referenced in the Full Bench’s Decision, particularly at paragraph [69]:
“The fundamental issue is that the overtime rates in the Electrical, Electronic and Communications Contracting Award are prescribed by use of the expressions “time and a half”, “double time” and “double time and a half”. As earlier explained, these expressions were determined in the Yallourn decision and the Domain Aged Care decision to have an established industrial meaning whereby they operated as multipliers of the rate of pay applicable to the employee in ordinary time which, in the case of casual employees, includes the casual loading.”
(Applicant’s emphasis)
The Applicant further submitted that it is patently clear from the above cited Full Bench Decision that the minimum hourly rate for an ongoing employee is different from the minimum hourly rate for a casual employee. The expression “minimum hourly rate” is not formally defined in the Award, hence it takes its meaning from the context in which it is used.
Critique of employer argument
The Applicant highlighted that the formal response on behalf of the Employer contained the following:
“Clause 28.2 of the Award provides for a penalty rate of 250% of the minimum hourly rate for employees required to work ordinary hours on a public holiday (the minimum hourly rate, as provided for at clause 17.1 of the Award, does not include a casual loading). No distinction is made between full and part-time employees and casual employees under clause 28.2 of the Award. In contrast, clause 21.2 of the Award, which provides for overtime rates, does make a distinction between full and part-time employees and casuals, by adding the 25% casual loading to the overtime rates and expressing the overtime rates as a percentage of the minimum hourly rate. It is the Employer’s view that the Award is unambiguous and that the minimum hourly rate upon which the public holiday penalty rate is calculated does not include the casual loading.”
The Applicant interpreted the essence of the Respondent’s position as seeming to argue that the Award unambiguously identifies the removal of the casual loading from casual employees who work ordinary hours on a public holiday.
The Applicant noted the ‘4 yearly review’ Full Bench decisions adopt as the orthodox approach an assumption that a casual employee continues to receive the benefit of the casual loading even where a penalty is applicable. However, as recognised above, the Full Bench has accepted a limited exemption to this general principle where there is an express exemption. In short, the general principal applies unless, “there is some provision which expressly indicates otherwise”.
The Applicant further submitted that the same Full Bench identified an example of such an express exemption provision which was contained in the Local Government Industry Award 2010, where they stated, as follows:
“for example, in the Local Government Industry Award 2010, clause 10.5(c) expressly provided that overtime penalties for casual employees would be calculated exclusive of the casual loading”.
The Applicant reproduced the following clause for the purpose of assisting in understanding the type of express exemption provision which the Full Bench stated was necessary to overturn the normal concept or principle:
“Clause 10.5(c) of the Local Government Industry Award 2010 was as follows:
“(c) Penalties and overtime
Penalties, including public holiday penalties and overtime, for casual employees will be calculated on the hourly ordinary time rate for the classification in which they are employed exclusive of the casual loading.”
(Applicant’s emphasis)
The Applicant highlighted that clause 28.2 of the Educational Services (Schools) General Staff Award does not contain the type of explicit exclusion identified in the Local Government Industry Award 2010.
The Applicant, therefore, submitted that the position espoused on behalf of the Respondent, claiming that clause 28.2 of the Award is “unambiguous” is, at best, an exaggeration and therefore should be disregarded.
History of the Award
The Applicant submitted that the Award was first made on 4 September 2009. The Applicant annexed relevant extracts from the Award, and stated these provisions, dealing with Casual employment and Public Holidays, remained the operative provisions until the Award was modified as part of the “4 yearly review of modern awards”. For completeness, those clauses are provided here:
“10.5 Casual employment
(a) A casual employee is an employee engaged as such.
(b) A casual employee will be paid an hourly rate of 1/38th of the weekly rate for the employee’s classification, plus 25%.
(c) A casual employee will be engaged and paid for a minimum of two hours for each engagement. Except that a preschool/childcare services employee working in an out of school hours care program may satisfy the two hours minimum by working one hour before school and one hour after school on the same day.
(d) A casual employee must be paid at the termination of each engagement, or fortnightly or monthly in accordance with usual payment methods for full-time employees.”
…
“31. Public holidays
31.1 Public holidays are provided for in the NES.
31.2 Payment for work on a public holiday
An employee required to work on a public holiday will be paid at the rate of 250% for ordinary hours performed, unless the employer and the employee have agreed to the employee taking a day off instead of payment in which case the employee will be paid at the ordinary time rate for work on the public holiday.”
The Applicant submitted that in carrying out the “4 yearly review of modern awards” the Commission did not intend to vary any essential operative provisions in the Awards. Specifically, the Applicant submitted that the Commission went to great lengths to ensure that the intention of the parties when the Award was made were reflected in the reviewed Award.
The Applicant acknowledged that according to the Award as originally made (and as it existed for a decade) the ordinary hourly rate for a casual was: “1/38th of the weekly rate for the employee’s classification, plus 25%”.
The Applicant further submitted that according to the Award as originally made (and as it existed for a decade) the public holiday penalty was as follows: “An employee required to work on a public holiday will be paid at the rate of 250% for ordinary hours performed”.
The Applicant argued, therefore, that the ‘compounding’ method of calculating the public holiday penalty for a casual would have applied. Further, the Applicant submitted that the earlier Full Bench comments, whilst not directly on point, provide authoritative guidance on the interpretation of the Award as originally made. That is, that the minimum hourly rate for an ongoing employee was different from the minimum hourly rate for a casual employee. Under the Award the former was 100%, and the latter was 125%.
The Applicant submitted that in its “4 yearly review of modern awards – Overtime for casuals” ([2020] FWCFB 4350), the Full Bench stated:
“There is an issue outstanding from our decision of 8 October 2019 concerning whether the casual loading is or should be payable on overtime under the Educational Services (Schools) General Staff Award 2010.”
The Applicant submitted that the intention of that decision was not to disturb the existing penalty calculations for casuals who worked ordinary hours on a public holiday, except to make it clear that the ‘cumulative’ calculation should be used rather than the ‘compounding’ calculation.
The Applicant relied here on the evidence of Mr Anthony Odgers, as supporting the view that there was no intention from the parties or the Commission, to totally remove the casual loading from casual employees who may work ordinary hours on a public holiday.
The Applicant, therefore, submitted that there is nothing in the history of the Award, either from its initial making, or from the 4 yearly review, which supports a conscious decision to expressly remove the entitlement to the casual loading from those casual employees who are required to work ordinary hours on a public holiday.
Further, the Applicant submitted that such an intention would have to be beyond doubt to warrant a move away from the general principle that a casual employee receives the casual loading on a cumulative basis with an applicable penalty.
Additional consideration relating to the Agreement
The Applicant noted that clause 13.7.1 (b) of the Agreement provides for a 28% casual loading. Therefore, notwithstanding clause 1.3 of the Agreement ‘calling up’ certain provisions from the Award, the Applicant argued that the effect of clause 1.3.2 is to substitute 28% (the casual loading prescribed by the Agreement) for the 25% casual loading prescribed by the Award.
The Applicant submitted that a casual employee (subject to this Dispute Application) should receive 278% of the rate applicable to an ongoing employee for ordinary hours worked on a public holiday.
Respondent’s Submissions
Statement of Anthony Odgers dated 17 February 2022
As to the statement filed by Mr Odgers, as relied on by the Applicant, the Respondent submitted that his statement is objectionable because it is not relevant, contains hearsay evidence and contains evidence of opinion. The Respondent cited s.591 of the Act, however, submitted that the rules of evidence are relevant in Commission proceedings and on a common-sense basis[1] Mr Odgers’ statement should not be admitted.
While the Respondent provided further submissions as to its objections to Mr Odgers’ statement on the bases of relevance, hearsay and opinion, these have been read and considered but are not repeated here.
Submissions in reply to the submissions of the IEUA
The Respondent does not dispute paragraphs [14] to [16] of the Applicant’s Submissions.
The Respondent submitted that the Full Bench of the Commission has noted that a casual loading is paid to:
“…compensate casual employees for the nature of their employment and the fact that they do not receive the range of entitlements provided to full-time and part-time employees, such as annual leave, personal/carer's leave, notice of termination and redundancy benefits”.[2]
Further, the Respondent noted that in Re: Metal, Engineering and Associated Industries Award,[3] the Full Bench stated:
“… we are satisfied that paid leave; long service leave; and a component covering differential entitlement to notice of termination of employment and employment by the hour effects, should constitute the main components to be assessed in determining casual loading…”.
The Respondent highlighted that the Award does not provide for a purpose for the payment of a casual loading.
The Respondent submitted that as to the question of whether the casual loading is to compensate for an ‘unquantifiable component for certainty’ as suggested at paragraph [18] of the Applicant’s Submissions, it is clear from the authorities that its purpose is to compensate for a loss of entitlements afforded to a full or part-time employee.
The Respondent submitted that while full and part-time employees accrue entitlements for their ordinary hours of work, they do not accrue additional, or more of those same entitlements, for working on a public holiday. Such employees are compensated by the public holiday pay rate of 250%. The Respondent submitted, similarly, casual employees do not lose those entitlements to any greater degree by working on a public holiday and are compensated by the public holiday pay rate of 250%. The Respondent submitted that to that extent, the arguments proposed in the Applicant’s Submissions at paragraphs [19] to [20] are simply wrong.
Full Bench decisions – Overtime for casuals
The Respondent submitted that the Applicant’s reliance on the “4 yearly review of modern awards” decisions of Full Bench of the Commission as to ‘overtime for casuals’ is misconceived. The Respondent submitted that both the October 2020 and August 2020 Full Bench decisions were limited to the issue of overtime rates and not penalty rates for working on public holidays. Specifically, at paragraphs [95]-[96] of the October 2020 decision, the Full Bench noted, with respect to an issue raised by the Local Governments Association, that the current proceedings were “…not concerned with public holiday penalty rates.”
The Respondent submitted that the Full Bench issued a Determination amending the Educational Services (Schools) General Staff Award 2020 on 30 October 2020[4] as a result of the October 2020 and August 2020 decisions. That determination amended the Award with respect to the overtime rates paid to employees and expressly provided that the 25% casual loading would be additional to the overtime rates by reference to the Table at clause 21.2. The Respondent submitted that no such amendment was made to clause 28.2 of the Award as a result of the Determination.
The Respondent submitted that to the extent that the October 2020 and August 2020 decisions may provide some guidance with respect to public holiday penalty rates, it noted that while the Full Bench, in the August 2020 decision, referred to ‘traditional industrial expressions’ with ‘a traditional meaning’, the Full Bench also recognised that there may be provisions that ‘expressly indicate otherwise’ (paragraph [25]). In the same decision the Full Bench referred to the Aluminium Industry Award 2010 and clauses 10.4 and 21.1 of that award dealing with casual employment and overtime payment respectively, concluding that:
“Clause 10.4(a) plainly provides for the payment of the casual loading only in respect of ordinary time. It neither explicitly nor implicitly requires the casual loading to be paid on overtime. There is no dispute that the overtime entitlements of casual employees are contained in clause 21.1. The penalty rates specified in clause 21.1 are payable in respect of “the ordinary hourly rate of pay” in each case, and no distinction in this respect is made for casual employees… The definition makes it unambiguous that the ordinary hourly rate of pay upon which the overtime penalty rate is calculated does not include the casual loading.”
The Respondent submitted that in the present case, the Award at clause 11.1 provides for the payment of a casual loading as follows:
“For each ordinary hour worked, a casual employee must be paid:
c. the minimum hourly rate for the classification in which they are employed; and
d. a loading of 25% of the minimum hourly rate.”
The Respondent referred to clause 21.2 of the Award, in that it provides for overtime rates with reference to the minimum hourly rate, such that the overtime rate for casuals is 25% higher than the rate for non-casual employees. For example, overtime worked on a public holiday is 250% of the minimum hourly rate for full and part-time employees and 275% of the minimum hourly rate for casual employees.
The Respondent noted, however, that at clause 28.2, payment for work on a public holiday, for an employee required to work ordinary hours, is ‘250% of the minimum hourly rate’. The Respondent submitted that no distinction is made for casual employees, and, to paraphrase the Full Bench, it makes it unambiguous that the minimum hourly rate upon which the public holiday penalty rate is calculated does not include the casual loading.
The Respondent submitted that the Applicant’s Submissions rely on the history of the Award and suggest that the Full Bench did not intend to ‘vary the essential operative provisions in the Awards’, though there is no reference to where in the August 2020 or October 2020 decisions such an intention was stated.
The Respondent noted that nonetheless, the Applicant’s reliance on the former clause 10.5 of the Award, in particular sub-clause 10.5(b) assists the Respondent’s arguments when consideration is given to the statement of the Full Bench referred to at paragraph [55] above. The former 10.5(b) of the Award is consistent with clause 10.4(a) of the Aluminium Industry Award 2010, and the views of the Full Bench with respect to that Award are directly relevant to interpretation of this Award, to the extent the Applicant seeks to rely on any prior version of the Award.
The Respondent referred to paragraph [41] of the Applicant’s Submissions, which suggested that there is ‘nothing in the history of the Award…which supports a conscious decision to expressly remove the entitlement to the casual loading from those casual employees who are required to work ordinary hours on a public holiday’. Regardless of whether this is true, the Respondent submitted that the Applicant did not make out that there was ever any such entitlement.
The Respondent noted that it did not dispute paragraphs [43] and [44] of the Applicant’s submissions.
Respondent’s further submissions
The Respondent submitted that in a prior decision of the ‘4 yearly review of modern awards - Overtime for casuals’,[5] (October 2019 decision), the Health Services Union submitted that under clause 10.5(d) of the Ambulance and Patient Transport Industry Award 2010, weekend and public holiday penalty rates did not attract the casual loading, but that the casual loading of 25% should apply in addition to overtime rate. Clause 10.5(c) and (d) read as follows:
“(c) A casual employee will be paid an hourly rate calculated on the basis of 1/38th of the minimum weekly wage prescribed in clause 14—Minimum weekly wages for the relevant classification level, plus:
(i)25% for all work on weekdays;
(ii)75% for all work on Saturdays and Sundays; and
(iii)(iii) 100% for all work on public holidays.
(d) The casual loadings in clause 10.5.(c) are paid instead of any weekend or public holiday penalty rate that would otherwise apply under this award.”
The Full Bench stated that:
“We do not consider that clause 10.5(c) is to be read as applicable to overtime as well as ordinary hours, since that would lead to weekend overtime attracting a casual loading of 75% in addition to an overtime penalty of 100% (see clause 24.1(b)). It is more likely that clause 10.5(c) is to be read as applicable to ordinary hours only, with clause 24.1 setting the overtime penalties and making no provision for the additional payment of the casual loading.”
The Respondent submitted that while that award did not expressly exclude the casual loading from applying to overtime, the Full Bench interpreted that to be the case. The Respondent noted that this part of the October 2019 decision related to overtime for casuals and not public holiday penalty rates for casuals, but submitted that it supports the Respondent’s view that an award that ‘expressly indicates’ a position does not require the ‘express exemption’ claimed to be required in paragraph [28] of the Applicant’s Submissions.
The Respondent put that the principles of award interpretation require an examination of the natural and ordinary meaning of words.[6] The ordinary meaning of words cannot be ignored in an attempt to reach an outcome that appears just and fair.[7] The terms of an award should be constructed objectively.[8]
The Respondent submitted that with respect to the Award, the terms of clause 28.2 are clear:
“An employee required to work on a public holiday will be paid 250% of the minimum hourly rate for ordinary hours worked…”
The Respondent thereby submitted that while not specifically defined in the Award, the minimum hourly rate is expressed throughout the Award as being exclusive of the casual loading. See for example, the table at clause 21.2. At clause 11.1 a casual employee is entitled to be paid, for each ordinary hour worked, the minimum hourly rate and a loading of 25% of the minimum hourly rate (Respondent’s emphasis).
The Respondent concluded that it is clear from the ordinary meaning of the words used in the Award, that the minimum hourly rate is exclusive of the casual loading and the public holiday penalty rate is payable to all employees at 250% of the minimum hourly rate.
Applicant’s Submissions in Reply
The previous Award, as made on 4 September 2009
While the Respondent has asserted that the Applicant’s reliance on clause 10.5 of the ‘former’ Award assists their arguments, the Applicant submitted that the position advanced on behalf of the employer is simply illogical in light of the content of points [35] to [37] of the Applicant’s submission at first instance.
The Applicant submitted that as previously stated, absent any identified intention to change the previous provision, those previous entitlements should be retained. The Applicant added that their ability to provide a detailed history of the Award variations over time was made impossible by the adoption of a new website by the Commission, and the consequent unavailability of much information.
Explicit Exclusion
The Applicant noted that the Respondent has submitted, in relation to the Ambulance and Patient Transport Industry Award 2010:
“While that award did not expressly exclude the casual loading from applying to overtime, the Full Bench interpreted that to be the case.”
The Applicant submitted this statement is patently incorrect. The Applicant submitted that the fallacy of the assertion on behalf of the employer is obvious when notice is taken of their own quotation from the subject Award, part of the quoted clause being:
“(d) The casual loadings in clause 10.5(c) are paid instead of any weekend or public holiday penalty rate that would otherwise apply under this award.”
The Applicant submitted that an Award provision which states that the “casual loadings … are paid instead of any weekend or public holiday penalty rate” is precisely the type of “explicit exclusion” which the Applicant says needs to exist before the argument on behalf of the employer could be accepted. The Applicant reiterated that no form of “explicit exclusion” either existed in the predecessor Award or exists in the current Award.
Accrual of entitlements
The Applicant made reference to the Respondent’s submission which states, inter alia, that:
“full and part-time employees accrue entitlements for their ordinary hours of work, they do not accrue additional, or more of those same entitlements, for working on a public holiday. … Similarly, casual employees do not lose those entitlements to any greater degree by working on a public holiday and are compensated by the public holiday pay rate of 250%.”
The Applicant submitted that this is simply wrong. The Applicant submitted it is obviously correct that full and part-time employees accrue entitlements (for example: annual leave; and personal leave) by working their ordinary hours. Similarly, it is obviously correct that where a full time or part-time employee works ordinary hours on a public holiday, such an employee accrues entitlements for that work. Such employees accrue entitlements and receive the 250% penalty for working on a public holiday.
The Applicant submitted that, notably, the 250% penalty is separate and distinct from the accrual of (for example) leave entitlements.
The Applicant submitted that casual employees receive the casual loading in lieu of the benefits of ongoing employment, two of such benefits are annual leave; and personal leave. To apply the logic of paragraph [77] above, and the logic accepted by the employer’s representative, the 250% penalty for work on a public holiday is separate and distinct from the benefits of ongoing employment.
The Applicant submitted that if casual employees do not receive the casual loading in addition to the public holiday penalty (for ordinary hours worked), they do lose that component which compensates them for the absence of the benefits of ongoing employment. The Applicant therefore submitted that the latter part of the submission on behalf of the employer is illogical.
Principles of Interpretation
The Applicant submitted that the simplistic approach advanced by the Respondent is not consistent with the detail of the precedents listed below.
The Applicant acknowledged that the principles to be applied when construing legislative provisions are well established. As stated by Kiefel CJ, Nettle and Gordon JJ in SZTAL v Minister for Immigration and Border Protection[9] at [14]:
“The starting point for the ascertainment of the meaning of a statutory provision is the text of the statute whilst, at the same time, regard is had to its context and purpose. Context should be regarded at this first stage and not at some later stage and it should be regarded in its widest sense. This is not to deny the importance of the natural and ordinary meaning of a word, namely how it is ordinarily understood in discourse, to the process of construction. Considerations of context and purpose simply recognise that, understood in its statutory, historical or other context, some other meaning of a word may be suggested, and so too, if its ordinary meaning is not consistent with the statutory purpose, that meaning must be rejected.”
(Applicant’s emphasis)
The Applicant submitted that it has also been held that Awards and Agreements, though not Legislation, are subject to the same principles of interpretation. French J, as he then was, in City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union[10] stated:
“The construction of an award, like that of a statute, begins with a consideration of the ordinary meaning of its words. As with the task of statutory construction regard must be paid to the context and purpose of the provision or expression being construed. Context may appear from the text of the instrument taken as a whole, its arrangement and the place in it of the provision under construction. It is not confined to the words of the relevant Act or instrument surrounding the expression to be construed. It may extend to ‘...the entire document of which it is a part or to other documents with which there is an association’. It may also include ‘... ideas that gave rise to an expression in a document from which it has been taken’ - Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at 518 (Burchett J); Australian Municipal, Clerical and Services union v Treasurer of the Commonwealth of Australia (1998) 80 IR 345 (Marshall J).”
Madgwick J made the following statement in Kucks v CSR Ltd:[11]
“It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand.”
The Applicant submitted that the context within which a provision exists, the history of that provision, and the scheme of statutory entitlements, should be taken into account. In the words of Kiefel CJ, Nettle and Gordon JJ, ‘If the alleged ordinary meaning of the words in the Award is not consistent with the statutory purpose, then that meaning must be rejected’. For the record, the IEUA noted that it does not accept the argument on behalf of the employer about ordinary meaning.
Purpose of the Casual Loading
The Applicant submitted that it is clear from the Decisions cited by the employer’s representative, that the Casual Loading does more than compensate for the absence of leave entitlements. In the “4 yearly review of modern awards – Penalty Rates” decision ([2017] FWCFB 1001) the Full Bench stated:
“the casual loading is paid to compensate casual employees for the nature of their employment and the fact that they do not receive the range of entitlements provided to full-time and part-time employees, such as annual leave, personal/carer’s leave, notice of termination and redundancy benefits.”
The Applicant submitted, therefore, the Full Bench recognised two separate components: “the nature” of casual employment; and absence of a “range of entitlements”.
In Re: Metal, Engineering and Associated Industries Award, 1998 – Part 1 [110 IR 247] the Full Bench devoted a section (13.4) to considering “Itinerance” and “Lost Time”. That decision quoted with approval an earlier Victorian Decision which had attributed part of the Casual Loading to “broken time, the intermittent nature of the work, … and the lack of entitlement to notice”. The Applicant submitted this decision also supports the concept that the Casual Loading recognises more than the absence of a range of leave entitlements.
The Applicant submitted that where a casual employee works ordinary hours on a public holiday, logic dictates that they should receive both the casual loading (which is paid to compensate casual employees for the nature of their employment and the fact that they do not receive the range of entitlements) and the penalty for work on a public holiday.
Statement of Anthony Odgers
The Applicant made submissions in support of Mr Odgers’ statement being admitted in this proceeding. These submissions have been given consideration, but are not repeated here.
However, in summary it is noted that the Applicant submitted Mr Odgers’ evidence is the only first-hand evidence of the intention of the parties which is before the Commission, and should be taken at face value.
Conclusion
The Applicant stated that the central point in this case is whether the payment of the casual loading to a casual employee working ordinary hours on a Public Holiday is “expressly excluded” by the Award. The employer does not enhance their argument by suggesting that the test is whether the Award “expressly indicates” such an outcome.
The Applicant submitted that it is obvious, and the employer’s representative accepts this point at paragraph [65] above, that an “express exclusion” does not exist. The Applicant submitted that the reality of the situation is that there is no evidence of an intention to exclude the casual loading from a casual employee who works ordinary hours on a Public Holiday. The Applicant submitted that to achieve the interpretation argued for by the Respondent, the language of the Award would have to be strained past breaking point.
Consideration
I have taken into account all of the submissions that have been provided by the parties and I have attached the appropriate weight to the evidence of the witnesses. The fact that an issue is not mentioned in this decision does not mean that it has not been taken into account.
Whilst the Courts have recently reinforced the relevant principles that a Court and Tribunal should follow when interpreting enterprise agreements, the most concise and comprehensive decision which collated all of the historical precedent was the Commission’s Full Bench decision in Berri.[12] Relevantly, in Berri the Full Bench enunciated 15 principles:
“[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.”
Determination
Adopting and following the principles in Berri, it is an essential requirement to give the words of an Agreement/Award their plain and ordinary meaning.
It is not in dispute that the Agreement does not contain a relevant provision in relation to the payment of a casual employee working ordinary hours on a public holiday.
The Award is also silent, in express terms, as to the relevant payment. It does not contain a provision like that which exists in the Building and Construction General On-site Award 2020 which states:
“12.6 A casual employee required to work on a public holiday prescribed by the NES must be paid 275% of the ordinary hourly rate prescribed for the employee’s classification.”
Clause 17.1 of the Award states that:
“17.1 An employer must pay adult employees the following minimum rates for ordinary hours worked by the employee:
[table omitted]
…
NOTE: See Schedule B—Summary of Hourly Rates of Pay for a summary of hourly rates of pay including overtime and penalty rates.”
Schedule B provides a summary for the Hourly Rates of Pay for Permanent and Part Time Adult Employees in B.1 and for Casual Adult Employees in B.2. Relevantly, Schedule B.2.1, Casual Adult Employees – Ordinary and Penalty Rates, applies a Public Holiday rate of 275% for each classification level in the Award. I note that full time and part time employees receive a public holiday rate of 250% in Schedule B.1.1.
Whilst there is no specific wording in the Award on the issue, Clause 17 distinctly refers to Schedule B of the Award, which unambiguously provides the hourly rates for the different employment scenarios. As a result, I am satisfied that an adult casual employee who works their ordinary hours on a public holiday receives the 250% public holiday penalty rate plus their casual loading.
I also note that clause 11.1 of the Award states:-
“11.1 Casual loading
For each ordinary hour worked, a casual employee must be paid:
(a) the minimum hourly rate for the classification in which they are employed; and
(b) a loading of 25% of the minimum hourly rate.”
Therefore, I am satisfied that it would be a breach of the Award if a casual employee did not receive their casual loading whilst working their ordinary hours on a public holiday. They receive this loading for all ordinary hours worked to compensate them for the non-accrual of annual leave, sick leave, notice, etc. If the casual employee was working alongside a permanent or part time employee, who were also working their ordinary hours, then the permanent and part time employees would be accruing these benefits whilst the casual employee would get nothing by way of compensation in relation to these benefits. Such a scenario is unfair, does not provide the casual employee with a fair go and is contrary to the Objects of the Act.
On the basis the Agreement applies in the event of any inconsistency with the Award (as per Clause 1.3.2 of the Agreement), I am satisfied that the Agreement casual loading of 28% is the appropriate loading to be applied in this situation.
Conclusion
For the reasons stated above, I find that a casual employee working ordinary hours on a public holiday is entitled to be paid 278% of the ordinary rate of pay for their classification.
COMMISSIONER
[1] Re: Construction, Forestry, Mining and Energy Union PR935310 (RE2003/787); PDS Rural Products Ltd v Corthorn (1987) 19 IR 153 at 155; Hail Creek Coal Pty Ltd v Construction, Forestry, Mining and Energy Union (2004) 143 IR 354 at 50.
[2] Four yearly review of modern awards - Penalty Rates [2017] FWCFB 1001 at [337].
[3] (2000) 110 IR 247.
[4] 4 yearly review of modern awards—Overtime for casuals (AM2017/51).
[5] [2019] FWCFB 6953 (8 October 2019) at [30].
[6] Australian Workers’ Union v Cleanevent Australia Pty Ltd [2015] FCA 1477 at [13].
[7] Kucks v CSR Limited [1996] IRCA 166 at [184].
[8] Amcor Limited v Construction, Forestry, Mining and Energy Union [2005] HCA 10 at [114].
[9] [2017] HCA 34; (2017) 262 CLR 362.
[10] (2006) 153 IR 426.
[11] (1996) 66 IR 182 at 184.
[12] [2017] FWCFB 3005.
Printed by authority of the Commonwealth Government Printer
<PR740172>
0
3
0