Mr Aleksandar Lacevski & Mr James Tolevsky v Linfox Australia Pty Ltd

Case •

[2012] FWA 6713

•

13 SEPTEMBER 2012

No judgment structure available for this case.

[2012] FWA 6713


FAIR WORK AUSTRALIA

DECISION



Fair Work Act 2009
s.739 - Application to deal with a dispute

Mr Aleksandar Lacevski & Mr James Tolevsky
v
Linfox Australia Pty Ltd
(C2012/2235)

Road transport industry

COMMISSIONER LEWIN

MELBOURNE, 13 SEPTEMBER 2012

Dispute over terms of Enterprise Agreement - conversion of casual employment to other employment - interpretation of Enterprise Agreement - incorporation of terms of award - ‘to the extent of any inconsistency’ - meaning of systematically engaged on a full time equivalent basis

Introduction

[1] This matter is an application for Fair Work Australia to deal with a dispute under s.739 of the Fair Work Act 2009 (the Act). The dispute arises under the terms of the Linfox Road Transport and Distribution Centres National Enterprise Agreement 2011 (the Agreement). Clause 22 of the Agreement contains a term that provides a procedure for dealing with disputes, of the kind identified in s.738(b) of the Act.

[2] The dispute concerns the entitlement of Mr Aleksandar Lacevski and James Tolevsky (the applicants), who are casual employees of Linfox Australia Pty Ltd (Linfox), to elect to convert their casual employment to another type of employment with Linfox.

[3] The dispute was originally notified on 13 January 2012, by the Transport Workers’ Union of Australia (TWU), as ‘a dispute regarding the conversion of long term casuals to permanent employees’. On 26 February 2012 Mr Lacevski advised my Associate that the TWU had decided not to pursue the dispute, insofar as is relevant to the applicants, and that he and Mr Tolevsky wished to proceed with the settlement of the dispute insofar as it applied to them.

[4] On 16 March 2012, I advised the applicants that I was minded to waive any applicable Rules and accept correspondence with my Chambers as an application to deal with the dispute under the terms of the dispute settlement procedure of the Agreement in relation to their employment under the Agreement. I advised that it was my understanding that the applicants wished to proceed to the arbitration stage of the settlement of disputes procedure as prescribed by Clause 22.1(e) of the Agreement. The dispute had been the subject of all the steps prescribed by Clause 22 of the Agreement, including conciliation by the Tribunal preceding arbitration. On 21 March the applicants confirmed that they wished to proceed to arbitration of the dispute.

[5] The matter was heard for the purposes of arbitration on 28 May 2012 and 30 July 2012. Linfox did not object to the procedure adopted or to the dispute being dealt with by arbitration.

[6] The settlement of disputes procedure as contained at Clause 22 of the Agreement is set out below:

    ‘22. SETTLEMENT OF DISPUTES PROCEDURE

    22.1 Any dispute or grievance that arises at the workplace between an Employee and Linfox and/or Linfox and the TWU about the Agreement or the employment relationship (including, for the avoidance of doubt, in relation to the NES) shall be dealt with in the following manner:

      (a) The matter must first be discussed by the aggrieved Employee(s) directly with his or her immediate supervisor. The Employee will be advised that they may seek TWU representation, or another representative of their choice, if they choose to do so;

      (b) If the matter remains in dispute, it must next be discussed with the supervisor’s immediate superior or another representative of Linfox appointed for the purpose of this procedure. The TWU delegate for the worksite has the right to attend and participate in this discussion as the representative of an Employee provided that the TWU delegate is the representative of the Employee’s choice;

      (c) If the matter remains in dispute, it must next be discussed with the relevant manager of Linfox. The relevant TWU state secretary (or his/her nominee) has the right to attend at and participate in this discussion as the representative of an Employee provided that the relevant TWU state secretary is the representative of the Employee’s choice;

      (d) If the matter remains in dispute, it must next be submitted to FWA for conciliation.

      For this purpose, it is agreed that the action FWA may take includes:

        (i) arranging conferences of the parties or their representatives at which FWA is present; and

        (ii) arranging for the parties or their representatives to confer among themselves as conferences at which FWA is not present.

      (e) If the matter is not resolved in conciliation conducted by FWA, the parties agree that FWA may proceed to arbitrate the dispute and/or otherwise determine the rights and/or obligations of the parties to the dispute. In relation to such arbitration, the parties agree that:

        (i) FWA may give all such directions and do all such things as are necessary for the just resolution of the dispute, including but not limited to those things set out in section 595 of the Act;

        (ii) before making a determination FWA will give the parties an opportunity to be heard formally on the matter(s) in dispute;

        (iii) in making its determination FWA will only have regard to the materials, including witness evidence, and submissions put before it at the hearing and will disregard any admissions, concessions, offers or claims made in conciliation.

      (f) The decision of FWA will be binding on the parties subject to the following agreed matters:

        (i) There shall be a right of appeal to a Full Bench of FWA against the decision, which must be exercised within 21 days of the decision being issued or within such further time as the Full Bench may allow;

        (ii) The appeal will be conducted in accordance with the legal principles applying to an appeal;

        (iii) The Full Bench shall have the power to stay the decision pending the hearing and determination of the appeal.

    22.2 The decision of the Full Bench in the appeal will be binding upon the parties.

    22.3 Until the matter is resolved by agreement, conciliation or arbitration, work will continue in accordance with the status quo. No party is to be prejudiced as to the final settlement by the continuance of work in accordance with this procedure.

    22.4 The parties must co-operate to ensure that these procedures are carried out expeditiously. The parties undertake to resolve any disputes in a timely manner in accordance with the disputes procedure.

    22.5 To avoid doubt, this dispute resolution procedure shall not be used to resolve unfair dismissals or adverse action claims.’

[7] The description of the scope and application of Clause 22 of the Agreement has two distinct qualitative dimensions. Clause 22.1 provides that the dispute may be about the Agreement or the employment relationship.

[8] A dispute concerning conversion of an employee’s employment from casual employment to another type of employment is capable of being characterised as a dispute about both the Agreement and the employment relationship between a casual employee and Linfox generally.

[9] The Agreement contains what is referred to within the structure of its provisions as a Common Term, which deals with the subject matter of the dispute. However, it should be noted that, for reasons explained below, those are not the only terms of the Agreement which deal with the subject matter of the dispute. The Clause referred to is Clause 36 of the Agreement. Clause 36 - Casual Conversion is set out below:

    ‘36. CASUAL CONVERSION

    36.1 This clause 36 applies only to casual Employees who have been engaged by Linfox for six months on a systematic and full time equivalent basis.

    36.2 Subject to clause 36.1 of this Agreement, clause 12.6 of the Road Transport Award is incorporated into this Agreement for all Employees, except that the references to a period of 12 months in subclauses 12.6(a) and 12.6(b) shall, for the purposes of this Agreement, be taken to be references to a period of six months.’

[emphasis added]

[10] Looked at in isolation from other considerations these terms may appear to be the only terms of the Agreement dealing with the subject matter of the dispute. However, as noted, there are other relevant terms of the Agreement which must be considered in due course. The emphasised words in Sub-Clauses 1 and 2 of Clause 36 give rise to questions concerning the proper construction of the terms of Clause 36 and other terms of the Agreement. Of particular relevance is the meaning of the words ‘engaged by Linfox for six months on a systematic and full time equivalent basis’.

[11] At a hearing of the dispute on 30 July 2012 Mr Darren Jones of Linfox informed the Tribunal that Linfox would make an offer to convert the employment of the applicants and provide copies of the offers so made to the Tribunal by 2 August 2012.

[12] The applicants were each offered conversion of their casual employment in a letter dated 7 August 2012, they subsequently advised the Tribunal they rejected the offers. The offers of conversion of their employment were made in similar terms for both applicants were put before the Tribunal and are shown in Appendix 1 to this decision.

Characterisation of the dispute

[13] It is appropriate to characterise the dispute at this point, particularly having regard to the scope of Clause 22 and the nature of the issues to be dealt with. On what is before me, I consider the dispute concerns the rights of the applicants prescribed by the terms of the Agreement, in relation to conversion of their employment as casual employees to a contract for another type of employment. I describe the dimensions of the dispute in this way because this is how I understand it to be characterised by the applicants and Linfox. The applicants submit that they have an entitlement to elect to convert their casual contract of employment and that Linfox has obligations prescribed by the relevant terms of the Agreement in relation to the conversion of their casual employment.

[14] While, independently of the disputed entitlements prescribed by the terms of the Agreement, there may be a dispute in relation to ‘the employment relationship’, such a dispute has not been identified or otherwise characterised for the purposes of the hearing and determination of the matter before me.

[15] Linfox submits that the terms of the Agreement do not confer the entitlements and obligations respectively asserted by the applicants upon them. Linfox submits, for reason which will be addressed further, the applicants have no casual conversion entitlements under the Agreement.

[16] In the original notification by the TWU the relief sought under the settlement of disputes procedure was as follows:

    ‘Linfox offer to convert any employees with in excess of six months continuous service to permanent.’1

[17] The applicants had been employed under the terms of the Agreement for 15 months at the time the Tribunal reserved its decision in relation to the disputes.

[18] The terms of the Clause 36 of the Agreement are superficially inelegant and on the face of it, and in the context of the Agreement as a whole, seemingly contradictory.

[19] Linfox maintains that the applicants are not ‘casual employees who have been engaged by Linfox for six months on a systematic and full time equivalent basis’. The applicants maintain that on a proper and reasonable construction of the history of their employment they fall within that description and consequently Clause 36 of the Agreement applies to their employment.

[20] There is also a question of whether or not regardless of whether the applicants fall within the scope of casual employees who have been engaged by Linfox for six months on a systematic and full time equivalent basis, they have a right to elect to convert their casual employment to another type of employment under the terms of the Agreement.

[21] If the issue were as neat as set out in paragraph [19] above the question could be addressed simply by reference to whether, on the facts and history of the applicants’ employment, they are casual employees who fall within the terms of Clause 36 of the Agreement. This is because Linfox maintains that the only employees of Linfox who have entitlements to convert their casual employment to a contract for other employment are such ‘full time equivalent’ employees contemplated by Clause 36. If that were so, the question to be decided would be confined to a proper characterisation of a ‘full time equivalent’ casual employee and comparative evaluation of the engagement of the applicants over a 26 week period with what the Tribunal considers the terms of the Agreement mean a ‘full time equivalent’ casual employee to be.

[22] However, the provisions of Clause 36.2 must have work to do for the purposes of the operation of the Agreement. The contradiction which might seem to arise, referred to above, is the apparent limitation of what I will refer to as casual conversion rights in Clause 36.1 to ‘only’ the casual employees described therein (full-time equivalents) and on the other hand the provisions of Clause 36.2 which, refer to the incorporation of the provisions of Clause 12.6 of the Road Transport and Distribution Award 2010 (the Award) in relation to ‘all employees’.

[23] The provisions of Clause 12.6 of the Award are set out below.

    ‘12.6 Conversion of casual employment

    (a) A casual employee, other than an irregular casual employee who has been engaged by a particular employer for a sequence of periods of employment under this award during a period of 12 months will thereafter have the right to elect to have their contract of employment converted to full-time employment or part-time employment if the employment is to continue beyond the conversion process.

    (b) An employer of such an employee must give the employee notice in writing of the provisions of this clause within four weeks of the employee having attained such period of 12 months.

    (c) The employee retains the right of election under this clause even if the employer fails to comply with clause 12.6(b).

    (d) A casual employee who does not, within four weeks of receiving written notice, elect to convert their contract of employment to full-time employment or part-time employment will be deemed to have elected against any such conversion.

    (e) Any casual employee who has the right to elect under clause 12.6(a), upon receiving notice under clause 12.6(b), or after the expiry of the time for giving such notice, may give four weeks notice in writing to the employer that they seek to elect to convert their contract of employment to full-time or part-time employment, and within four weeks of receiving such notice the employer must either consent to or refuse the election but must not unreasonably so refuse.

    (f) A casual employee who has elected to be converted to a full-time employee or a part-time employee in accordance with clause 12.6(e) may only revert to casual employment by written agreement with the employer.

    (g) If a casual employee has elected to have their contract of employment converted to full-time or part-time employment, the employer and the employee, subject to clause 12.6(e), must discuss and agree upon:

      (i) which form of employment the employee will convert to, that is, full-time or part-time; and

      (ii) if it is agreed that the employee will become a part-time employee, the number of hours and the pattern of hours that will be worked, as set out in clause 12.4(b).

    (h) An employee who has worked on a full-time basis throughout the period of casual employment has the right to elect to convert their contract of employment to full-time employment and an employee who has worked on a part-time basis throughout the period of casual employment has the right to elect to convert their contract of employment to part-time employment, working the same number of hours and times of work as previously worked, unless other arrangements are agreed upon between the employer and employee. Upon such agreement being reached, the employee will convert to full-time or part-time employment. Where, in accordance with clause 12.6(e) an employer refuses an election to convert, the reasons for doing so must be fully stated to and discussed with the employee concerned and a genuine attempt made to reach agreement.

    (i) An irregular casual employee is one who has been engaged to perform work on an occasional or non-systematic or irregular basis.’

[24] It would seem that the words ‘subject to Clause 36.1 of this Agreement’, which commence the provisions of Clause 36.2 of the Agreement, have the effect of incorporating Clause 12.6 in respect of ‘full time equivalent’ casual employees only for the purposes of Clause 36, rather than providing that the terms of Clause 12.6 of the Award are incorporated by Clause 36.2 in relation to ‘all [casual] employees’, whether full time equivalent or otherwise.

Principles of Construction

[25] Relevant authority governing the approach to the interpretation of enterprise agreements includes the decision of Madgwick J in Kucks v CSR Ltd (Kucks),2 which has been followed with widespread approval by the Tribunal and its predecessors.3 The following extract from the decision in Kucks is apt to the circumstances of this case for reasons which become clearer below.

    ‘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.

    But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning.’4

[26] Whilst Kucks deals with the interpretation of awards, authority for the proposition that the reasoning in Kucks can be applied to the interpretation of industrial agreements is provided by the Full Bench of Fair Work Australia in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU) v Silcar Pty Ltd as follows:

    ‘[11] It is well established that these principles, stated in relation to the interpretation of awards, are equally applicable to the interpretation of industrial agreements. They have application in the present case.’ 5

Meaning of full time equivalent basis

[27] What will constitute a casual employee who is ‘engaged on a full time equivalent basis’ is clearly a part of the dispute which must be determined in order to deal with the dispute by arbitration. Indeed proper construction of that expression is axiomatic to the determination of the dispute.

[28] To construe this expression appropriately it is necessary to do so in the context of Clause 36 as a whole and the terms of the Agreement as a whole. The approach should as far as possible be to determine the intention of the Agreement makers as discerned from the words of the Agreement. In appropriate circumstances it will be permissible to give consideration to relevant extrinsic materials.

[29] There are two considerations which can be identified immediately. The incorporation of the terms of the ‘Road Transport Award’ by Clause 36.2 ‘for all employees’ cannot be ignored, nor can other terms of the Agreement appearing elsewhere in the Agreement which deal with casual conversion.

[30] The Agreement does not define the term ‘full time equivalent’. While there is no suggestion that the applicants have not been engaged systematically as casual employees, Linfox contends that in order for the applicants to have been employed on a ‘full time equivalent’ basis and therefore to meet the qualification for a right to elect to convert their casual employment to another type of employment the applicants would have to have worked an average of 38 ordinary hours per week as a casual employee for a period of six months. This, it is submitted, is not the case a matter of fact.

[31] It must be noted that neither Clause 36 or any of what are referred to as the Common Terms of the Agreement directly and expressly deal with types of employment such as full time, part time and casual employment. The definition of types of employment for the purposes of the Agreement are derived from terms incorporated from other instruments.

[32] The Agreement is a national agreement which is substantially constructed by means of prescribing terms common to all employees and variously incorporating terms of numerous industrial instruments, both extant and superseded, and other kinds of agreements such as certain Memoranda of Understanding between Linfox and the TWU. I do not intend to traverse all the intricate pathways by which terms and conditions of employment are applicable to the numerous Linfox sites throughout Australia and the many different employees whose employment is subject to the Agreement. However, for present purposes it is necessary to note certain terms of incorporation which are relevant to the applicants, who are employed at what is referred to as the Coles Distribution Centre at 626 Kororoit Creek Rd, Altona North in the State of Victoria.

[33] The Agreement operates in respect of ‘Sites’ specified in Appendix 5 to the Agreement. The site at which the applicants are casual employees is included in Appendix 5.

[34] Part C of the Agreement - Incorporated Terms includes a Division 3 - Victoria and Tasmania. Three and possibly four of the various terms and conditions of employment set out in Part C, Division 3, Clause 82.2 of the Agreement are relevant. They are contained in subparagraphs (a), (c), (f) and (m) of the Agreement. Those provisions are set out immediately below.

‘82.2 Subject to clauses 82.3 and 82.4, the following terms are incorporated into this

Agreement:

    (a) for Employees based at a Site listed under the heading 'Vic/Tas 2007 Agreement Sites' in Appendix 5 to this Agreement: Appendix 2 – Wage Rates, Appendix 3 – Local Matters (except for point 5 in clause 9.3.3 of the Appendix and point 5 in clause 9.3.4 of the Appendix) for the relevant Site and clause 4.2 of the Vic/Tas 2007 Agreement;

    ...

    (c) for Employees covered by the Linfox Victoria (Coles RDC) Agreement 2008: Appendix 1 – Wages Rates and clauses 3.12, 3.2.2, 4.2, 4.5, 5.1.1, 5.2, 5.3.3(b), 5.3.4(b), 5.3.6(c), 5.4, 6.1.10, 6.1.12, 6.2.2, 6.2.3, 6.4.2, 7.4.3 and 26.13(b) of the Linfox Victoria (Coles RDC) Agreement 2008;

    ...

    (f) for Employees covered by the Memorandum of Understanding between Linfox and the TWU (Vic/Tas Branch), signed in November 2010: the whole of the Memorandum of Understanding;

    ...

    (m) for all Employees based at a Site in Victoria or Tasmania: the terms of the Modern Awards (including allowances), except for the following provisions (which relate to certain allowances and expenses) which are not incorporated into this Agreement:

      (i) subclause 16.1(b)(ii) of the Road Transport Award, which is only not incorporated for Employees covered by the Linfox Victoria (BOC) Agreement 2009;

      (ii) subclause 16.1(d) of the Road Transport Award, which is only not incorporated for Employees covered by the Linfox Victoria (BOC) Agreement 2009;

        (iii) subclause 16.3(a) of the Road Transport Award, which is not incorporated for all Employees; and

        (iv) subclause 14.1(d) of the Road Transport Long Distance Award, which is only not incorporated for Employees covered by the Linfox Victoria (BOC) Agreement 2009; and

        (v) subclause 14.2(a) of the Road Transport Long Distance Award, which is not incorporated for all Employees.’

[35] The meaning of modern Awards is defined by Clause 7 of the Agreement as follows:

‘Modern Awardsmeans the Road Transport Award 2010 and the Road Transport Long Distance Award 2010 collectively.’

I consider the first award mentioned refers to the Road Transport and Distribution Award 2010. The employment of the applicants is within the scope of the Award. Accordingly, Clause 12.6 Casual Conversion of the Award is incorporated by Clause 82.2(m) as an operative term of the Agreement applicable to the employment of the applicants.

[36] It is to be noted that Clause 4.4 of the Agreement is as follows:

    ‘4.4 The Terms of this Agreement operate as follows:

      (a) Incorporated Terms from enterprise agreements, memoranda of understanding, common law agreements and State awards prevail, to the extent of any inconsistency, over Common Terms and Incorporated Terms from the Modern Awards;

      (b) Common Terms prevail, to the extent of any inconsistency, over Incorporated Terms from the Modern Awards.’

    [emphasis added]

[37] Clause 36 Casual Conversion appears in Part B of the Agreement. The terms of Clause 36 of the Agreement are Common Terms as defined by Clause 7(f) of the Agreement, as follows:

‘Common Termsmeans those terms specified in Part B, Common Terms.’

[38] At this point it may be observed therefore that the terms of Clause 36 Casual Conversion prevail over the terms of Clause 12.6 of the Award only ‘to the extent of any inconsistency’.

[39] The Award contains the following description of full time employment:

‘12.3 Full-time employment

    A full-time employee is an employee who is engaged to work an average of 38 ordinary hours per week.’

[40] It will be necessary to determine whether the applicants have worked an average of 38 ordinary hours per week. The approach to the dispute taken by Linfox causes an issue to arise immediately in respect of the proper accounting of the hours worked by the applicants since the commencement of the Agreement. I will deal with this issue as a necessary preliminary to my construction of Clause 36 of the Agreement.

[41] The applicants have been systematically rostered to work on the days Mondays to Saturdays inclusive since the commencement of the Agreement. Linfox have paid the employees at overtime rates for work performed on Saturdays and for hours worked outside the span ordinary of hours on Mondays to Fridays. Linfox submits that because the hours of work performed on Saturdays and outside the span of ordinary hours have been paid for at overtime rates those hours of work cannot be considered ordinary hours for the purposes of the definition of a ‘full time equivalent’ employee in accordance with the incorporated terms of Clause 22 of the Award.

[42] Clause 50 of the Agreement is a Common Term and is set out below:

‘50. HOURS OF EMPLOYMENT

    Clause 22 of the Road Transport Award is incorporated into this Agreement for all Employees, except that the ordinary hours of work must be worked between the hours of 5.00am and 6.00pm.’

[43] Clause 22 of the Awardrelevantly provides as follows:

‘22. Ordinary hours of work

    22.1 The ordinary hours of work are an average of 38 per week to be worked on one of the following bases:

    (a) 38 hours within a work cycle not exceeding seven consecutive days;
    (b) 76 hours within a work cycle not exceeding 14 consecutive days;
    (c) 114 hours within a work cycle not exceeding 21 consecutive days; or
    (d) 152 hours within a work cycle not exceeding 28 consecutive days.

    22.2 The ordinary hours of work may be worked on any day Monday to Friday. The days on which ordinary hours are worked may include Saturday and Sunday subject to agreement between the employer and the majority of employees concerned. Agreement may also be reached between the employer and an individual employee.’

[44] Clause 28.1 Weekend work of the Award provides as follows:

‘28.1 Weekend work

    (a) For any ordinary time hours worked between midnight on Friday and midnight on Saturday an employee must be paid at the rate of time and a half.

    (b) For any ordinary time hours worked between midnight on Saturday and midnight Sunday an employee must be paid at the rate of double time.
    (c) An employee required to work on a Saturday or Sunday will be paid for a minimum of four hours work.

(d) All time worked on Sunday will stand alone.’

[45] Clause 27 Overtime of the Award is as follows:

‘27. Overtime

    27.1 For all work done outside ordinary hours the rate of pay will be time and a half for the first two hours and double time thereafter, such double time to continue until the completion of the overtime work.’

[46] It is clear from the above that the hours the applicants have worked since the commencement of the Agreement on Saturday may be ordinary hours or overtime hours. So much will be contingent upon the agreement of Linfox and an individual employee or a majority of employees concerned, as prescribed by the incorporated terms of Clause 22.2 of the Award.

[47] It is necessary then to consider whether the hours worked by the applicants on Saturdays can be reckoned for the purposes of Clause 36.1 to arrive at the conclusion that the applicants are ‘full time equivalents’ for the purposes of any entitlement prescribed thereby.

[48] In the absence of an agreement on the part of a ‘majority of employees concerned’ or individually on the part of the applicants and Linfox, that the hours of work performed on Saturdays would be ordinary hours, Linfox was obliged to pay the employees at overtime rates for work on Saturday and did so.

[49] The combined effect of the incorporation of Clause 22 and Clause 27 of the Awardmakes the work performed by the applicants on Saturday overtime rather than ordinary hours of work in the factual circumstances. This is because there is no agreement of either of the relevant kinds that the hours of work performed by the applicants on Saturday would be ordinary hours.

[50] I have been provided with evidence of the hours of work performed by the applicants and I will treat the hours of work performed on the days Monday to Friday within the span of ordinary hours prescribed by the Agreement as the ordinary hours of work performed by them over the periods to which the evidence refers for the purpose of my consideration of whether the applicants have been employed on a ‘full time equivalent’ basis. The ordinary hours are, by Clause 50 of the Agreement to be worked between 5am and 6pm and must not exceed eight hours per day.

Construction of Clause 36

[51] For reasons which will be elaborated below I consider that the intended effect of Clause 36 is to confer upon certain employees a right to casual conversion which is additional to, more beneficial, but not exclusive of, the terms of the incorporated provisions of Clause 12.6 of the Award. The ‘only’ employees to whom this additional more beneficial entitlement applies are casual employees systematically engaged on a ‘full time equivalent basis’ for no less than six months during the operation of the Agreement. Only those employees will enjoy the discrete and more beneficial right prescribed by Clause 36 of the Agreement.

[52] The category of employees who benefit from the entitlement prescribed by Clause 36 can elect to convert their casual employment to a contract of full time employment after six months. To the extent that this provision is inconsistent with the provisions of Clause 12.6 of the Award, as incorporated, it prevails over those provisions of the Award. The substantive effect of Clause 36 is to change the qualifying period of casual conversion prescribed by Clause 12.6 of 12 months to 6 months ‘only’ for casual employees who are systematically engaged on a ‘full time equivalent’ basis.

[53] The construction I have afforded to the operation of Clause 36 is a limited one and is consistent with clause 4.4(b) of the Agreement. The extent of inconsistency between the Common Terms of Clause 36 and the incorporated terms of the Award is that ‘only’ casual employees who may be properly characterised as ‘full time equivalent(s)’ may convert their employment from casual employment to full time employment in accordance with the conditions of such conversion in Clause 12.6 of the Award after six months. That construction does not exclude the operation of Clause 12.6 of the incorporated Award in relation to any other casual employees of Linfox who have been engaged by Linfox to whom Clause 12.6 applies. Such casual employees who do not fall within the terms of Clause 36.1 of the Agreement are subject to the relevant incorporated terms of Clause 12.6 of the Award.

[54] It is not inconsistent with Clause 36 for a casual employee who has not been engaged systematically for six months on a ‘full time equivalent’ basis to enjoy the benefits of the incorporated terms of Clause 12.6 of the Award. A casual employee, who is not an irregular casual, engaged for a period of twelve months, who does not fall within the category of a ‘full time equivalent’, can elect to convert their employment consistently with the incorporated terms of the Award. Thus, for example, a casual employee, who is not an ‘irregular casual’, who is engaged for 19 hours per week (0.5 full time equivalent) for a sequence of periods of employment during a period of 12 months will thereafter have a right to elect to have their casual employment converted to part time employment. There is no inconsistency between a ‘full time equivalent’ casual employee having a right to convert their contract of employment after six months to full time employment and a casual employee who is not engaged on a systematic and full time equivalent basis having a right to convert their casual employment after twelve months, to part time employment, in accordance with the terms of Clause 12.6 of the Award. The terms of Clause 36 clearly state that its provisions deal ‘only’ with ‘full time equivalent’ casual employees and therefore do not deal with the circumstances of other casual employees.

[55] In my view, the work which is done by the words ‘only’ and ‘for all employees’ in Clause 36.1 and Clause 36.2 respectively, as previously referred to and emphasised, is as follows. The word ‘only’ is used to confine to a certain class of casual employee ‘full time equivalent(s)’ the entitlement to elect to convert to a full time contract of employment after six months, rather than the twelve months prescribed by the incorporated casual conversion provisions of Clause 12.6 of the Award. The use of the words ‘for all employees’ in clause 36.2 is to express that entitlement as applicable to all casual employees who are such ‘full time equivalents’ employed at any location or ‘site’ to which the Agreement applies. This expression is used to create clarity, that this right applies to any casual employee of Linfox, wherever and however employed, who is engaged as a casual employee systematically on a ‘full time equivalent’ basis for the requisite 26 weeks.

[56] Therefore, the effect of Clause 36 is at least threefold. First, to grant an additional entitlement to that provided for by the incorporated terms of clause 12.6 of the Award, for some but not all casual employees. Second, to incorporate all of the relevant provisions of Clause 12.6 of the Award, as a part of Clause 36 for the purposes of this additional entitlement in order to apply the details of such entitlement otherwise provided for by the terms of the Award, in relation to conversion from casual employment to a contract of employment of a full time nature. Third, to clearly express the entitlement as applicable to all ‘full time equivalent’ casual employees regardless of the site or geographic location of their employment, having regard to the diverse incidence of terms and conditions of employment throughout Australia prescribed by the terms of the Agreement and any relevant incorporated term which may be inconsistent.

[57] In my view a submission that by Clause 36 of the Agreement incorporation of the provisions of Clause 12.6 of the Award became void in relation to casual employees other than casual employees systematically engaged to work on a ‘full time equivalent’ basis over 26 weeks basis should be rejected.

[58] The provision of a shorter qualifying period for ‘full time equivalent’ casual employees as a discrete group of casual employees should be construed as a special code for such employees ‘only’6 which does not abolish, diminish or detract from other less beneficial terms applicable to casual employees who do not fall within the proper construction of a ‘full time equivalent’ casual employee. Such terms are incorporated from the Award by Clause 82 of the Agreement. There is no inconsistency or conflict between the provisions of Clause 36 and the incorporated terms of Clause 12.6 of the Award on this construction. Moreover, this construction, in my judgement, can also be arrived at in accordance with the guidance in Kucks. The essential difference effected by Clause 36 is to apply different waiting periods for a right to ‘casual conversion’ for different casual employees depending upon the pattern of their engagements.

[59] It follows from my construction of the terms of the Agreement that as the applicants have both worked as casual employees for more than 12 months under the terms of the Agreement 7 and are not irregular casuals Linfox may have an obligation, unless it is reasonable to withhold it, to respond to the applicants’ election to convert their casual employment, either under Clause 36 of the Agreement or in accordance with the incorporated terms of Clause 12.6 of the Award. The available election will depend first upon whether the employment of the applicants falls within the terms of Clause 36.1 of the Agreement. If their casual employment, individually, does not fall within Clause 36.1 then their right of election will be in accordance with the incorporated terms of Clause 12.6 of the Award.

[60] As previously noted Linfox submits that the proper construction of Clause 36 is that, among other things, its provisions confine any right of ‘casual conversion’ to casual employees who are systematically engaged for six months as ‘full time equivalent(s)’ and excludes all other casual employees from the operation of any casual conversion entitlements. This submission must rest on the use of the words which commence Clause 36. Clearly, I consider this a misconstruction. My view is that the word ‘only’ is used to confine the application and operation of Clause 36 to ‘full time equivalent’ casual employees and does not extend the operational effect of Clause 36 so as to exclude the effect of Clause 82.2(m) of the Agreement in relation to other casual employees.

[61] I am mindful of the provisions of Clause 4.4 as set out previously and I have dealt with the extent of any inconsistency between Clause 36 and the incorporated Clause 12.6 of the Award.

[62] A careful reading of the Agreement makes it clear that the complex interactive nature of the structure of the Agreement has been dealt with systematically and methodically by the arrangement of the various incorporated terms and their applicability throughout the employment covered by the Agreement. In doing so the terms of the Agreement which incorporate the terms of the Award were discretely considered by the makers of the Agreement and various provisions were expressly excluded in relation to certain employees. The complexity of arrangement and detailed structure of the provisions of this kind in Clause 82.2 and elsewhere is evidence that the makers of the Agreement gave detailed consideration to the subject of what provisions of the Award would be excluded from incorporation as terms of the Agreement and in respect of which employees.

[63] If it had been the intention of the Agreement to exclusively confine casual conversion rights to casual employees systemically engaged as ‘full time equivalent(s)’ for six months and to exclude any other casual employee from access to the entitlements conferred in Clause 12.6 of the Award it is reasonable to assume that the provisions of Clause 12.6 of the Award would have been expressly excluded by Clause 82.2(m), rather than remain incorporated terms thereby. This is the self evident and logical means by which Clause 36 would become the single absolute and exclusive code if all conversion rights accruing to casual employees under the terms of the Agreement were to be confined to ‘full time equivalent(s)’.

[64] If I am wrong in this then despite the meticulous care that the Agreement makers have taken in relation to the incorporation and excision of numerous and various terms and conditions of employment then they have abolished any casual conversion entitlements of any regular casual employee who is not a ‘full time equivalent’ inadvertently or alternatively created an ambiguity in relation to which casual employees will have casual conversion entitlements in what circumstances.

[65] In my judgement, given the Agreement’s contemplation of the interaction of the Common Terms of the Agreement and the incorporated terms of the Award, it is appropriate to read the intention of the Agreement makers beneficially. That is to say that the use of the words ‘to the extent of any inconsistency’ is intended to preserve any benefit conferred by an incorporated term of the Award unless the benefit is expressly and clearly extinguished by the effect of a Common Term.

Extrinsic material

[66] My conclusion about the proper construction of the intended effects of Clause 36 is fortified by consideration of the material filed with the Tribunal when the application for the approval of the Agreement was made pursuant to s.185 of the Act on 9 May 2011. I have informed Linfox and the applicants that in the circumstances I consider it appropriate to have regard to this material. No objection or submission was made by the parties in this regard and I therefore consider the material before me for the purposes of the hearing. However, for the sake of clarity for the reasons already stated I have reached my conclusions independently of it.

[67] I set out below extracts from that material. The Form F17 - Employer’s declaration in support of application for approval of enterprise agreement, filed by Minter Ellison on behalf of Linfox, describes the steps taken by Linfox to explain the terms of the Agreement to the employees whose employment would be covered by the Agreement, the following is stated:

    ‘2.6 Please specify the steps taken by the employer to explain the terms of the agreement, and the effect of those terms, to relevant employees: (s.180(5))

    On Wednesday 23 March 2011 (a few days before the commencements of the ‘access period’), each site covered by the Agreement placed copies of the following documents at various accessible locations (such as lunch rooms, allocator’s/ service windows and noticeboards) at the site:

    1. the ‘Summary of Key Inclusions of Proposed Agreement’ which described the nature and structure of the Agreement and identified the key differences between the employees’ current terms and their terms under the proposed Agreement; and

    2. the ‘Overview of Proposed Agreement’ which summarised each of the terms of the Agreement.

    Site managers then held meetings to discuss the terms of the proposed Agreement with employees.

    The TWU was extensively involved in the negotiation of the Agreement and also communicating directly with employees about its terms and effect. The TWU officials in each state conducted information sessions at sites on the content of the Agreement and the Voting process. The TWU consulted extensively with employees during the course of negotiations and in relation to the in-principle Agreement. The TWU’s site delegates held meetings with employees on site about the proposed Agreement during the access period.

    Further, employees were also invited to contact Linfox’s Workplace Relations Officers in each State if they had any questions about the proposed Agreement. Some employees contacted the Officers to ask questions about the proposed Agreement and all questions were answered.’

[68] The document entitled Summary of Key Inclusions and Voting Process included, as an attachment to the Form F17, the following:

    ‘Casual Conversion: Job offers for full time employment to be made after 6 months of systematic employment.’

[69] In relation to the requirement that the Agreement pass the better off overall test Linfox referred to the terms of the Agreement which were more and less beneficial than the relevant modern award using tables which were attached to the application.

[70] In Annexure G to the Form F17 relevant terms said to be more beneficial than the Road Transport and Distribution Award 2010 are as follows:

Terms in the proposed Agreement

Terms of the Road Transport and Distribution Award 2010

Group of Employees affected

Casual Conversion – provides for:

● a casual Employee, other than an irregular casual Employee, who has been engaged for a sequence of periods of employment during a period of six months has the right to convert to part-time or full-time employment

● the Award provisions apply except that the provisions are on the basis of six months of systematic engagement (clause 36)

Casual conversion - provides for:

    ● a casual Employee, other than an irregular casual Employee who has been engaged for a sequence of periods of employment during a period of 12 months has the right to convert to part-time or full-time employment;

    ● further entitlement to employment conversion on the basis of 12 months of systematic engagement (clause 12.6)

All Employees

[emphasis added]

[71] A conclusion that all employees, whether ‘full time equivalent’ or otherwise, would have a right to convert after six months might be available on a reading of this table. However, I make no finding to this effect for reasons already stated. In my view, this assertion in the Form F17 does not accord with the terms of the Agreement when carefully considered.

[72] In Annexure E to the Form F17 of the application for approval of the Agreement which tabled ‘Terms in the Agreement that are less beneficial than the Road Transport and Distribution Award 2010’ no mention of the Agreement containing casual conversion provisions any less favourable to any regular casual employee is made. It is to be noted that the better off overall test requires that each employee whose employment will be covered by the Agreement must be better off overall under the terms of the Agreement than if employed under a relevant reference instrument. It follows that if a casual employee who would have a right to convert their casual employment to part time employment under the Award would not have that right under the terms of the Agreement in that respect the terms of the Agreement would be less beneficial than the Award.

[73] Clearly the contents of the Form F17 do not support the submission that casual employees whose employment is not that of a ‘full time equivalent’ would be in anyway worse off under the casual conversion provisions of the Agreement than if employed under the relevant provisions of the Award. Among various contents of this material which would seem relevant is the statement that ‘All employees’ are affected by the more beneficial terms of the Agreement. It would be deeply inconsistent with this material therefore to exclude some employees from the operation of the incorporated Award provisions.

[74] Linfox’s submission in this matter would seem to contradict the basis upon which it submitted the Agreement should be approved. Linfox relied upon more beneficial casual conversion entitlements for all employees as a basis for approval of the Agreement. It would be an absolute contradiction of what was put in support of approval of the Agreement to conclude that, for example, conversion from casual employment to part time employment as provided for by Clause 12.6 of the Award was made void by the approval of the Agreement on the basis of this material. This must be the consequence if Clause 36 of the Agreement is to be construed exclusively so as to provide for casual conversion for ‘full time equivalent’ casual employees and no others. On such a construction Clause 12.6 of the Award would have no operation in relation to any casual employee except those to whom Clause 36 applies despite the incorporation of its terms.

Situation of the dispute

[75] The offer appended to this decision does not accord with the provisions of Clause 12.6(h) of the Award incorporated as a term of the Agreement applicable to the employment of the applicants. Linfox is obliged to make an offer to convert the casual employment of the applicants working the same number of hours and times of work as previously worked. That offer must be consistent with all of the terms of the Agreement. The offer is silent on the type of employment and the hours and times of work of the applicants which would be the basis of the conversion of their casual employment. Therefore it is necessary to consider what type of employment of the applicants and the hours and times of work of the applicants the Agreement requires should be available as a basis for the conversion of their casual employment, if they elect to do so.

[76] Given my construction of the terms of the Agreement I should now consider whether the applicants qualify as ‘full time equivalent’ casual employees under Clause 36.1. In order to give proper effect to the requirement that an employee who will be entitled to elect to convert their casual contracts of employment the relevant casual employees must be a ‘full time equivalent’. It seems to me necessary to account for certain features of full time employment which apply in addition the ordinary hours of work a full time employee. The words used in Clause 36.1 are not ‘full time’ casual employees for the purpose of defining the class of casual employees who will qualify for conversion after six months. The word equivalent requires the application of judgement as to what circumstances of casual employment will be of equal value to the circumstances of a full time employee.

[77] A full time employee will be entitled to annual leave and personal leave. In my view, in any evaluation the ‘equivalent’ status of a casual employee to that of a full time employee it is appropriate to take account of these entitlements. Thus over a period of six months an accrued annual leave entitlement would be no less than 76 hours and in the case of personal leave 38 hours. Following this approach it is appropriate to determine the status of a casual employee as a full time equivalent as follows:

    ● Multiply 26 by 38 to arrive at the gross number of ordinary hours of work which would be equivalent to those of a full time employee over 6 months (988)

    ● Reduce the total derived by 114 on account of annual leave and personal leave entitlements of a full time employee (874).

[78] The consequence is that the number of hours of work of a casual employee must be no less than 874 ordinary hours over a 26 week period in order to qualify for an offer to convert their contract of employment from casual employment to full time employment. The number 874 is the equivalent mandatory ordinary hours of attendance over a 26 week period for a full time employee. It is to be remembered that a casual employee will receive a casual loading in lieu of an entitlement to annual leave and personal leave, among other things. A casual employee when not performing or absent from work for reasons of personal leave or recreation leave will therefore simply not be engaged at such times and receive no cash payment during such time.

[79] On 25 July Linfox provided a comprehensive record of the hours worked by the applicants between 17 May 2011 and 16 May 2012. While the applicants have provided information of a similar kind the Linfox material is more detailed, it disaggregates the hours of work by reference to ordinary hours and overtime the days upon which work was performed and the hours work for each day. Information was provided for the applicants and it is not challenged.

[80] On my calculations there was no period of six months or 26 weeks within the scope of the Linfox material during which the applicants performed 874 ordinary hours of work.

[81] The number of ordinary hours worked by Mr Lacevski between 17 May 2011 and 16 November 2011 is 740.42. On my construction of the terms of the Agreement Mr Lacevksi is therefore not entitled to elect to convert his casual employment to full time employment under Clause 36.1 and 36.2 of the Agreement.

[82] The number of ordinary hours worked by Mr Tolevsky between 17 May 2011 and 16 November 2011 is 652.73. On my construction of the terms of the Agreement Mr Tolevsky is therefore not entitled to elect to convert his casual employment to full time employment under Clause 36.1 and 36.2 of the Agreement.

[83] In light of any construction of the Agreement and the facts as I have found them I observe the following.

[84] Consequent upon the conclusions I have reached Mr Lacevski and Mr Tolevsky have a right to elect to convert their casual employment under the incorporated terms of Clause 12.6 of the Award. Linfox and the applicants must discuss which form of employment the applicants will convert to in accordance with the incorporated terms of Clause 12.6(g).

[85] The applicants have a right under the incorporated terms of Clause 12.6(h) to elect to convert their employment to part time employment working the same number of hours and times of work as previously worked, unless other arrangements (such as full time employment) are agreed to and Linfox must not unreasonably refuse to provide for such conversion.

[86] If the offers made by Linfox to the applicants constitute an express or implied refusal to convert the casual employment of the applicants consistently with the terms of the Agreement the reasons for doing so have not been fully stated and a genuine attempt to reach agreement in relation to the particular requirements of Clause 12.6(h) has not been made.

[87] If agreement cannot be reached in relation to the conversion of the applicants’ casual employment the Tribunal may determine a dispute about the requirements of the Agreement that concern the conversion of the applicants’ casual employment. Including a dispute over whether Linfox has unreasonably withheld conversion accordingly.

[88] Moreover, if necessary the Tribunal can deal with any failure to reach agreement under Clause 12.6(g) and (h). The Tribunal may also deal with a dispute about the employment relationship under Clause 22.1 of the Agreement, in relation to the steps taken to apply the requirements of Clause 12.6 to the particular circumstances of the applicants.

COMMISSIONER

Appearances:

A Lacevski and J Tolevsky on their own behalf

D Jones for Linfox Australia Pty Ltd

Hearing Details:

2012

Melbourne.

May, 28.

July, 30.

Appendix 1

1 Form F10

2 [(1996) 66 IR 182]

3 AMWU v Silcar Pty Ltd[2011] FWAFB 2555.

4 (1996) 66 IR 182, at 184.

5 [2011] FWAFB 2555 [11].

6 Agreement, Clause 36

 7   Road Transport and Distribution Award 2010, Clause 12.6(e)

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