Mr Dan McMillen v Queensland Rail T/A Queensland Rail
[2024] FWC 1166
•3 MAY 2024
| [2024] FWC 1166 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
Mr Dan McMillen
v
Queensland Rail T/A Queensland Rail
(C2023/2671)
| COMMISSIONER DURHAM | BRISBANE, 3 MAY 2024 |
Dispute about matters arising under the enterprise agreement relating to Public Holidays; interaction with the NES; Interaction with the Holidays Act 1983 (Qld).
An application has been made by Mr Dan McMillen for the Commission to resolve a dispute under the Queensland Rail Traincrew Enterprise Agreement 2020 (Agreement/2020 Agreement) regarding the payment he received for work performed on 27 December 2022. Specifically, Mr McMillen worked on this day and did not receive public holiday penalty rates. Mr McMillen is of the view that as this day was a gazetted public holiday in Queensland, he should have received the relevant penalty rates for this work.
Queensland Rail T/A Queensland Rail (QR) is the Respondent to the dispute as the employer party to the Agreement.
Mr McMillen followed the disputes procedure as set out in clause 24 of the Agreement.[1] As the matter remained unresolved, an application was filed with the Commission on 12 May 2023 seeking the Commissions assistance to conciliate the dispute. The matter was initially allocated to Commissioner Spencer who noted that the dispute had broader implications for the interpretation of the Agreement. Commissioner Spencer wrote to the Australian Federated Union of Locomotive Employees (AFULE) and the Australian Rail, Tram and Bus Industry Union (RTBU), advising them of the dispute and seeking their views. The AFULE and RTBU (the Union Parties) sought to be heard and were joined to the dispute at that time.
Commissioner Spencer convened a conference on 25 May 2023 with the aim of resolving the dispute. The matter was reallocated to my Chambers on 21 August 2023. Following a conference on 5 September 2023, the Parties confirmed their desire for the matter to be arbitrated as a dispute pertaining to the application or interpretation of the Agreement, as provided by clause 24.6 of the Agreement. As such, there is no contest between the Parties as to the jurisdiction of the Commission to resolve this dispute.
Although the focus of Mr McMillen’s dispute is the payment of public holiday penalty rates for 27 December 2022, the issue extends the fundamental question of whether payment for public holidays under the Agreement should only be made for the dates specified, or whether these payments extend to any gazetted public holiday. As such, the resolution of the dispute will have implications for any situation where Christmas Day, Boxing Day and/or New Years Day fall on a Saturday or Sunday.
Directions were issued on 5 September 2023 for the filing and serving of submissions and evidence. Both Parties agreed for the matter to be determined on the papers. On 5 December 2023, the Parties were asked to provide additional information, by way of a statement of agreed facts, outlining the history of public holiday provisions, across all applicable agreements from 2009 onwards. The statement of agreed facts was filed on 8 December 2023.
On 16 January 2024, the Parties were asked to provide further information regarding the treatment of additional public holidays that were gazetted during the life of the Queensland Rail Traincrew Enterprise Agreement 2017 (2017 Agreement) and the 2020 Agreement. Separate submissions were received from the Parties on 19 January 2024.
The Commission’s Powers to deal with this dispute
The Commission’s power to deal with disputes is set out in s 595 of the Act, which provides:
“595 FWC’s power to deal with disputes
(1) The FWC may deal with a dispute only if the FWC is expressly authorised to do so under or in accordance with another provision of this Act.
(2) The FWC may deal with a dispute (other than by arbitration) as it considers appropriate, including in the following ways:
(a) by mediation or conciliation;
(b) by making a recommendation or expressing an opinion.
(3) The FWC may deal with a dispute by arbitration (including by making any orders it considers appropriate) only if the FWC is expressly authorised to do so under or in accordance with another provision of this Act.
Example: Parties may consent to the FWC arbitrating a bargaining dispute (see subsection 240(4)).
(4) In dealing with a dispute, the FWC may exercise any powers it has under this
Subdivision.
Example: The FWC could direct a person to attend a conference under section 592.
(5) To avoid doubt, the FWC must not exercise the power referred to in subsection (3) in relation to a matter before the FWC except as authorised by this section.”
Subdivision B of Div 2 of Pt 6-2 of the Act concerns “Dealing with disputes”. Section 738 of the Act provides:
“738 Application of this Division
This Division applies if:
(a) a modern award includes a term that provides a procedure for dealing with disputes, including a term in accordance with section 146; or
(b) an enterprise agreement includes a term that provides a procedure for dealing with disputes, including a term referred to in subsection 186(6); or
(c) a contract of employment or other written agreement includes a term that provides a procedure for dealing with disputes between the employer and the employee, to the extent that the dispute is about any matters in relation to the National Employment Standards or a safety net contractual entitlement; or
(d) a determination under the Public Service Act 1999 includes a term that provides a procedure for dealing with disputes arising under the determination or in relation to the National Employment Standards.”
Section 739 provides the Commission’s power to deal with disputes as follows:
“739 Disputes dealt with by the FWC
(1) This section applies if a term referred to in section 738 requires or allows the FWC to deal with a dispute.
(2) [Repealed]
(3) In dealing with a dispute, the FWC must not exercise any powers limited by the term.
(4) If, in accordance with the term, the parties have agreed that the FWC may arbitrate (however described) the dispute, the FWC may do so.
Note: The FWC may also deal with a dispute by mediation or conciliation, or by making a recommendation or expressing an opinion (see subsection 595(2)).
(5) Despite subsection (4), the FWC must not make a decision that is inconsistent with this Act, or a fair work instrument that applies to the parties.
(6) The FWC may deal with a dispute only on application by a party to the dispute.”
Relevant Provision of the Agreement
Clause 58 of the Agreement stipulates the following:
“58 Public Holidays
Applicable public holidays
58.1 The following public holidays and associated payments will apply:
(i)New Year’s Eve (31 December) – from midday to midnight
(ii)New Year’s Day (1 January)
(iii)Australia day (26 January)
(iv)Good Friday
(v)Easter Saturday
(vi)Easter Sunday
(vii)Easter Monday
(viii)Anzac Day (25 April)
(ix)Labour Day
(x)Queen’s Birthday
(xi)Christmas Eve (24 December) 6.00pm to midnight
(xii)Christmas Day (25 December)
(xiii)Boxing Day (26 December)
(xiv)Show holidays or equivalent
or
(xv)any such day appointed under the Holidays Act 1983 (Qld), to be kept in place of any such holiday (i.e. a gazetted public holiday).
………… (Show Holiday Clause not cited as it is not relevant to this dispute)
Payment for public holidays
58.3Payment for working public holidays (as defined in clause 58.1) and shifts commencing on New Year’s Eve post midday, with the exception of Labour Day:
58.3.1In the case of ordinary hours, Employees will have all time worked credited to their work cycle and receive an additional payment of 50% of the full flat rate for all time worked. This payment will be made in the fortnight during which the hours are worked.
58.3.2In the case of hours worked on a nominated leisure period, Employees will be paid for all hours worked on the designated leisure period at 175% of the full flat rate. The hours worked on the nominated leisure period will be a stand-alone payment and not credited to the employee’s work cycle.
58.4If the period during which an employee takes paid leave includes a day or part-day that is a public holiday in the place where the employee is based for work purposes, the employee is taken not to be on paid leave on that public holiday.”
Submissions
Mr McMillen, the AFULE and RTBU (Applicant Parties)
The Applicant Parties argue that Mr McMillen is entitled to be paid Public Holiday penalty rates for 27 December 2022 because this day is prescribed as a public holiday by the Holidays Act 1983 (Qld) (Holidays Act).
They accept that the Agreement, at clause 58.1 prescribes the list of Public Holidays that are applicable to workers covered by it, and that 27 December does not appear in this list. They also accept that it was the intention of the bargaining parties to define the date on which certain public holidays (including Christmas day) would be observed and for penalty payments to be rendered only if an employee worked on those prescribed dates. They maintain however, that the list of public holidays that apply to workers, which is prescribed at clause 58.1 was developed based on the Parties incorrect understanding of the Holidays Act at the time.[2]
This misunderstanding has prevailed since 2011 when the Holidays Act was amended to provide additional public holidays when Christmas Day, Boxing Day and New Year’s Day, fall on a weekend. The result of these changes being that there are two public holidays observed for these public holidays in certain years, including in 2022 where the provisions of the Holidays Act resulted in public holidays being observed on both the 25 and 27 December.
It is the Applicant Parties’ position that until Mr McMillen lodged this dispute, all Parties had mistakenly held the view that when Christmas Day fell on a weekend, the public holiday that is gazetted to occur 25 December was substituted with, or replaced by, another public holiday on 27 December. They also accept that it was the intention of the Parties that penalty rates would only be paid on the date prescribed, but again, this was based on their incorrect understanding that the 27 December was not already a prescribed public holiday in the relevant years.
It was not until Mr McMillen lodged this dispute that the Union Parties undertook a closer examination of the Holidays Act. In doing so, it became clear to them that the Parties misunderstanding of the Holidays Act has resulted in the Agreement inadvertently providing the workers covered by it with less public holidays than are prescribed by the Holidays Act as being applicable to workers in Queensland workplaces.
Consequently, they contend that the operability of the clause is made unlawful, by the operation of the National Employment Standards (NES) and that the NES precedence clause within the Agreement is enlivened to ensure that the provisions of this Agreement equal or exceed those under the NES.
Essentially, the position of the Applicant Parties can be summarised as follows:
Article I.Public holidays fall within the domain of the NES under the Fair Work Act 2009 (the FW Act).[3]
Article II.Section 115 of the FW Act defines public holidays for the purpose of the NES and includes any other day declared or prescribed by a State or Territory.[4]
Article III.Since 2011, the Holidays Act has prescribed 27 December, as a public holiday in years where 25 December falls on a Saturday or Sunday.[5]
Article IV.This is inconsistent with the Agreement, which prescribes a limited list of public holidays, including references to actual dates (e.g. Christmas Day 25 December).[6]
Article V.The public holiday provisions within the Agreement were negotiated in good faith, however, due to the Parties misunderstanding of the Holidays Act, have inadvertently created a conflict with it, and subsequently, the NES.[7]
Article VI.The result of this is that Mr McMillen and his co-workers are afforded less public holidays than they are entitled to under the NES.[8]
Article VII.The NES precedence clause within the Agreement should now apply to ensure that the public holiday provisions of the Agreement “equal or exceed” those provided by the NES.[9]
Queensland Rail
QR note that this dispute extends to the fundamental question of whether payments for public holidays under the Agreement should only be made for the date specified, if one is, or for any gazetted public holiday.[10]
They oppose the Applicant Parties’ claim on the basis that the agreement clearly articulates that a number of public holidays are fixed to specific dates, for example the Christmas Day public holiday is fixed to 25 December and that associated public holiday penalty rates only flow from the specified date.[11]
QR note that the Applicant Parties do not dispute that it was the intention of the Parties to define certain fixed dates and for the penalty payments to flow from work on such specific dates only.[12] The current application of these clauses they say, is that an employee covered by the Agreement is paid public holiday pay rates only for the public holidays listed in subclause 58.1(i)-(xiv).[13]
QR submits in accordance with subclause 58.1(xv), the Agreement also provides for payment for any gazetted public holiday where such public holiday is kept in place of one listed in subclause 58.1(i)-(xiv).[14] For example, where one of the public holidays listed in subclause 58.1(i)-(xiv) is moved to an alternative date by way of gazette.
Importantly, QR contend that the current application of these clauses is that they do not apply to any additional public holidays that may be gazetted.[15] For example, if an employee works both the listed public holiday and any additionally gazetted public holiday, such as both Christmas Day (25 December) and an additional gazetted public holiday for 27 December, they are only paid public holiday pay rates for work done on Christmas Day (25 December).
QR submit that it was the intention of the Parties that the Christmas Day public holiday be bound to 25 December of each year and that if, in any year an employee worked both 25 December and 27 December (which they refer to as the “gazetted replacement Public Holiday for Christmas if it falls on a Sunday”) they would only be able to claim penalties on one of those days.[16]
QR oppose the Applicant Parties’ position that the disputed clauses are rendered unlawful by the operation of the NES as set out by the FW Act and the Holidays Act.
In noting the Applicant Parties contention that the conditions in the Agreement must at least be equal to the conditions of the NES, it is QR submission that this only extends to the entitlement to be absent from work and still be paid the relevant base rate of pay and the right to reasonably refuse to work on a public holiday.[17] It does not, they say, extend to any requirement to pay penalty rates. Essentially, they argue that there is a distinction between a date being recognised as a gazetted public holiday, and a date that attracts public holiday pay rates.[18]
The position advanced by QR can be summarised as follows:
· The Agreement, at clause 58.1 clearly provides that some public holidays, including Christmas Day, Boxing Day and New Years Day, are fixed to specific dates.[19]
· The relevant public holidays provisions of the Agreement are jointly and severally unambiguous in terms of interpretation.[20]
· Ancillary legislation, such as the Holidays Act, does not interfere with the intention of the partes.[21]
· A date being recognised as a public holiday does not automatically mean that it attracts public holiday penalty rates as the entitlement to public holiday pay rates comes solely from the Agreement, not legislation.[22]
· That clause 58.3 of the Agreement provides for additional payments to be made for working on a public holiday, but these are restricted only to those public holidays specifically prescribed in clause 58.1.[23] As 27 December is not prescribed in clause 58.1 of the Agreement, the additional payments do not apply to that date.[24]
· If an employee works both the prescribed public holiday and any additional public holiday, (such as Christmas Day 25 December and the additional gazetted public holiday 27 December), they are only to be paid public holiday penalty rates for the work done on the listed day (Christmas Day 25 December).[25]
· This was the clear intention of the Parties when negotiating the Agreement, and as such the provision is lawful.[26]
The Matters to be determined
Mr McMillen’s dispute originally sought to determine his claim that he was entitled to receive penalty rates for work he undertook on the 27 December 2022, which was a public holiday for workers in Queensland workplaces. As has been identified by the Parties, determining this question raises additional issues relating to the way that the Agreement captures and provides for the additional public holidays that occur when Christmas Day, Boxing Day and/or New Year’s Day occur on a weekend.
As noted by QR, “the question of interpretation and application of the EA (the Agreement), relevantly clause 58, which provides for applicable public holidays, and the payment for working these public holidays, now fall for determination by the Commission”.[27]
Determining this dispute requires interpreting the agreement that has been reached between the Parties. This involves the examination of three key elements.
The first element to be examined is whether the Agreement is consistent with both the Holidays Act and the NES.
The second element is consideration of whether clause 58 of the Agreement is intended to prescribe the Public Holiday provisions that apply to all public holidays, and more specifically, if clause 58.1 of the Agreement is intended to list all public holidays that are applicable to Queensland workers, or just certain public holidays.
The third element is whether the penalty rates prescribed at clause 58.3 of the Agreement apply to all public holidays or just those that are presently prescribed in 58.1.
Consequently, determining this dispute requires consideration of the relevant legislative framework and the construction of the Agreement.
Approach taken to Interpretation of the Agreement
In interpreting an award or enterprise agreement, the task is to construe the document in a practical manner and within the industrial environment in which it was drafted.[28] The Full Court of the Federal Court in WorkPac Pty Ltd v Skene recently affirmed this approach and other relevant precedents at [197]:[29]
“[197] The starting point for interpretation of an enterprise agreement is the ordinary meaning of the words, read as a whole and in context. The interpretation “... turns on the language of the particular agreement, understood in the light of its industrial context and purpose ...”. The words are not to be interpreted in a vacuum divorced from industrial realities; rather, industrial agreements are made for various industries in the light of the customs and working conditions of each, and they are frequently couched in terms intelligible to the parties but without the careful attention to form and draftsmanship that one expects to find in an Act of Parliament. To similar effect, it has been said that the framers of such documents were likely of a “practical bent of mind” and may well have been more concerned with expressing an intention in a way likely to be understood in the relevant industry rather than with legal niceties and jargon, so that a purposive approach to interpretation is appropriate and a narrow or pedantic approach is misplaced.” (citations omitted)
These principles were repeated in James Cook University v Ridd:[30]
“The starting point is the ordinary meaning of the words, read as a whole and in context.
A purposive approach is preferred to a narrow or pedantic approach — the framers of such documents were likely to be of a “practical bent of mind”. The interpretation “turns upon the language of the particular agreement, understood in the light of its industrial context and purpose”.
Context is not confined to the words of the 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”.
Context may include “... ideas that gave rise to an expression in a document from which it has been taken”.
Recourse may be had to the history of a particular clause “Where the circumstances allow the court to conclude that a clause in an award is the product of a history, out of which it grew to be adopted in its present form...
A generous construction is preferred over a strictly literal approach, but “Awards, whether made by consent or otherwise, should make sense according to the basic conventions of the English language. They bind the parties on pain of pecuniary penalties”.
Words are not to be interpreted in a vacuum divorced from industrial realities but in the light of the customs and working conditions of the particular industry.” (paragraph numbering and citations omitted)
Subsequent decisions of full benches of the Commission have applied the principles as set out by these superior courts.[31] In large measure those principles reflect earlier approaches of the Commission, particularly those in Berri.[32]
To the extent the consideration of this dispute requires the interpretation of the Agreement, the above principles have been applied.
In this present case, in addition to examining the ordinary meaning of the words, context and purpose has been drawn from the legislative framework within which the Agreement operates, the intention of the bargaining parties, the industrial environment within which the Agreement was drafted and the history of the relevant provisions. It has also been relevant to examine the post agreement conduct of the Parties.
Consideration – Element 1 – Is the agreement consistent with the NES and consequently the Holidays Act?
The first element to be considered concerns the Applicant Parties’ contention that the Agreement is inconsistent with both the Holidays Act and the NES as it provides Mr McMillen and his colleagues with less public holidays than they would, if not for the Agreement, be entitled to. This requires an examination of the relevant legislative framework.
Interaction between FW Act and the Holidays Act
Division 2 of the FW Act deals with the interaction of the FW Act with State and Territory laws. Section 26 of the FW Act provides that it applies to the exclusion of all State and Territory industrial laws as far as they would otherwise apply in relation to national system employees and employers. However, section 27(1) of the FW Act provides that certain matters are non-excluded matters, for which section 26 of the FW Act does not apply. Section 27(2) of the FW Act provides a list of non-excluded matters which relevantly includes:
(j) declaration, presentation, or substitution of public holidays, except in relation to the rights and obligations of an employee or employer in relation to public holidays.
The above is taken to mean that the declaration of any day to be either a public holiday, or substituted public holiday is exempt and therefore the domain of the States and Territories, whereas the industrial arrangements that apply to such public holidays are matters for the FW Act and the NES.
Put another way, the appointment or prescription of a public holiday under State or Territory law activates the NES public holiday provisions for all such days. The question of the applicability of this to penalty rates prescribed by Awards and Agreements made under the FW Act requires further consideration, however it is clear that it is the work of the Holidays Act to determine which public holidays will be observed in Queensland workplaces.
The NES
Section 61 of the FW Act, regarding the NES, provides as follows:
“61 The National Employment Standards are minimum standards applying to the employment of employees
(1) This Part sets minimum standards that apply to the employment of employees which cannot be displaced, even if an enterprise agreement includes terms of the kind referred to in subsection 55(5).
Note: Subsection 55(5) allows enterprise agreements to include terms that have the same (or substantially the same) effect as provisions of the National Employment Standards.
(2) The minimum standards relate to the following matters:
……………………………………
(h) public holidays (Division 10);”
Pursuant to section 61, it is clear that the NES prescribes the minimum standards that relate to public holidays, which cannot be displaced, even if, in accordance with subsection 55(5) of the FW Act, an agreement contains its own public holiday provisions.
Section 115 of the FW Act defines the meaning of a public holiday for the purposes of the NES as follows:
“115 Meaning of public holiday
(1) The following are public holidays:
(a) each of these days:
(i) 1 January (New Year’s Day);
(ii) 26 January (Australia Day);
(iii) Good Friday;
(iv) Easter Monday;
(v) 25 April (Anzac Day);
(vi) the Queen’s birthday holiday (on the day on which it is celebrated in a State or Territory or a region of a State or Territory);
(vii) 25 December (Christmas Day);
(viii) 26 December (Boxing Day);
(b) any other day, or part-day, declared or prescribed by or under a law of a State or Territory to be observed generally within the State or Territory, or a region of the State or Territory, as a public holiday, other than a day or part-day, or a kind of day or part-day, that is excluded by the regulations from counting as a public holiday.”
Importantly, section 115(1)(b) makes it clear that this list of Public Holidays to be observed for the purpose for the NES includes any other day that is declared by a State or Territory to be a public holiday.
Section 114 of the FW Act identifies the specific NES entitlements as they relate to public holidays:
“114 Entitlement to be absent from employment on public holiday
Employee entitled to be absent on public holiday
(1) An employee is entitled to be absent from his or her employment on a day or part-day that is a public holiday in the place where the employee is based for work purposes.
Reasonable requests to work public holiday
(2) However, an employer may request an employee to work on a public holiday if the request is reasonable
(3) If an employer requests an employee work on a public holiday, the employee may refuse the request if:
a. The request is not reasonable; or
b. The refusal is reasonable……..”
Section 116 further provides:
“116 Payment for absence on a public holiday
If, in accordance with this Division, an employee is absent from his or her
employment on a day or part-day that is a public holiday, the employer must pay the employee at the employee’s base rate of pay for the employee’s ordinary hours of work on the day or part-day.”
Interaction between the NES and modern awards and agreements
Section 55 of the FW Act, which deals with the interaction between the NES and enterprise agreements provides:
“55 Interaction between the National Employment Standards and a modern award or enterprise agreement.
National employment standards must not be excluded
(1)A modern award or enterprise agreement must not exclude the National Employment Standards or any provision of the National Employment Standards.
Terms expressly permitted by Part 2-2 or regulations may be included
(2)A modern award or enterprise agreement may include any terms that the award or agreement is expressly permitted to include:
(a)by a provision of Part 2‑2 (which deals with the National Employment Standards); or
(b)by regulations made for the purposes of section 127.
Note:In determining what is permitted to be included in a modern award or enterprise agreement by a provision referred to in paragraph (a), any regulations made for the purpose of section 127 that expressly prohibit certain terms must be taken into account.
(3) The National Employment Standards have effect subject to terms included in a modern award or enterprise agreement as referred to in subsection (2).
Note: See also the note to section 63 (which deals with the effect of averaging arrangements).
Ancillary and supplementary terms may be included
(4) A modern award or enterprise agreement may also include the following kinds of terms:
(a)terms that are ancillary or incidental to the operation of an entitlement of an employee under the National Employment Standards;
(b) terms that supplement the National Employment Standards;
but only to the extent that the effect of those terms is not detrimental to an employee in any respect, when compared to the National Employment Standards.
Note 1: Ancillary or incidental terms permitted by paragraph (a) include (for example) terms:
(a) under which, instead of taking paid annual leave at the rate of pay required by section 90, an employee may take twice as much leave at half that rate of pay; or
(b) that specify when payment under section 90 for paid annual leave must be made.
Note 2: Supplementary terms permitted by paragraph (b) include (for example) terms:
(a) that increase the amount of paid annual leave to which an employee is entitled beyond the number of weeks that applies under section 87; or
(b) that provide for an employee to be paid for taking a period of paid annual leave or paid/personal carer’s leave at a rate of pay that is higher than the employee’s base rate of pay (which is the rate required by sections 90 and 99).
Note 3: Terms that would not be permitted by paragraph (a) or (b) include (for example) terms requiring an employee to give more notice of the taking of unpaid parental leave than is required by section 74.
Enterprise agreements may include terms that have the same effect as provisions of the National Employment Standards
(5) An enterprise agreement may include terms that have the same (or substantially the same) effect as provisions of the National Employment Standards, whether or not ancillary or supplementary terms are included as referred to in subsection (4).
Effect of terms that give an employee the same entitlement as under the National Employment Standards
(6) To avoid doubt, if a modern award includes terms permitted by subsection (4), or an enterprise agreement includes terms permitted by subsection (4) or (5), then, to the extent that the terms give an employee an entitlement (the award or agreement entitlement) that is the same as an entitlement (the NES entitlement) of the employee under the National Employment Standards:
(a) those terms operate in parallel with the employee’s NES entitlement, but not so as to give the employee a double benefit; and
(b) the provisions of the National Employment Standards relating to the NES entitlement apply, as a minimum standard, to the award or agreement entitlement.
Note: For example, if the award or agreement entitlement is to 6 weeks of paid annual leave per year, the provisions of the National Employment Standards relating to the accrual and taking of paid annual leave will apply, as a minimum standard, to 4 weeks of that leave.
Terms permitted by subsection (4) or (5) do not contravene subsection (1)
(7) To the extent that a term of a modern award or enterprise agreement is permitted by subsection (4) or (5), the term does not contravene subsection (1).
Note: A term of a modern award has no effect to the extent that it contravenes this section (see section 56). An enterprise agreement that includes a term that contravenes this section must not be approved (see section 186) and a term of an enterprise agreement has no effect to the extent that it contravenes this section (see section 56)”
Section 55 of the FW Act is taken to mean that whilst an agreement can contain provisions that are ancillary or incidental to, or supplement the operation of an entitlement of an employee under the NES they cannot provide for a lessor entitlement than the NES. This is further clarified by section 61(1) of the FW Act which provides that the NES sets out the minimum standards that apply to the employment of employees which cannot be displaced, even if an enterprise agreement includes terms of the kind referred to in subsection 55(5).
Having considered the relevant legislation, I find the following with respect to the interaction between the FW Act and the Holidays Act:
It is the Holidays Act that determines which public holidays will be observed in Queensland workplaces.
The NES prescribes the minimum standards that relate to public holidays, which cannot be displaced, even if an agreement contains its own public holiday provisions per section 61 of the FW Act.
In addition to the list of prescribed Public Holidays, the NES entitlements extend to any other day declared or prescribed by the Holidays Act to be a public holiday per section 115(b) of the FW Act.
The minimum standards which cannot be displaced include:
oEntitlement for an employee to be absent from employment on public holiday (section 114(1) of the FW Act)
oEntitlement to reasonably refuse a request to work on a public holiday (section 114(3) of the FW Act) and
oWhere employee is absent on a public holiday, the entitlement to receive the employees’ base rate of pay for that day (section 116).
The Holidays Act
Having found that it is the work of the Holidays Act to prescribe the public holidays that are applicable to workers in Queensland workplaces, it is relevant to further examine its provisions to determine whether or not the Agreement is consistent with it, and in turn whether the Minimum standards prescribed by the NES are being met.
Central to this dispute is the way in which the Holidays Act treats the public holidays that are to be observed in Queensland workplaces for Christmas Day, Boxing Day and New Year’s Day. To gain a full appreciation of the matters in dispute, and the context and purpose of the public holiday provisions of the Agreement, it is relevant to further explore the background of amendments that were made to the Holidays Act which resulted in significant changes to the way these specific public holidays are prescribed. This assists when considering the legislative context in which the Agreement was made, and when considering the relevant provisions as they have appeared in QR Agreements over a similar timeframe.
Prior to 2010, the Holidays Act allowed for the substitution of another day in place of a public holiday but did not allow for the appointment of new or additional public holidays. The result of this was that where the State Government sought to observe a gazetted public holiday on a date other than that prescribed by the legislation (e.g. to observe the Christmas Day public holiday on 27 December because 25 December was a Saturday or Sunday) this could only be done by substituting the original public holiday with a new date, that would be held in place of the gazetted date. The effect when this occurred was that the original date ceased to be a public holiday and the substituted date became the public holiday in its place.
In 2010 the Holidays Act was amended to provide that both 25 and 28 December 2010 were to be observed as public Holidays for Christmas Day 2010, and that both 1 and 3 January 2011 were to be observed as public holidays for New Years Day in 2011.[33]
The explanatory notes for the 2010 amendments provide insight into the policy intention of the amendments and as such provide useful context when considering the legislative and industrial environment in which the Agreement was negotiated and operates. The 2010 explanatory notes provide:[34]
“In 2010 Christmas Day falls on a Saturday and without an amendment of the Act would not be a public holiday because Tuesday 28 December was appointed as a substitute public holiday (as notified in the Government Gazette of 28 August 2009).
In 2011 New Years Day falls on a Saturday. A substitute holiday has not yet been appointed for that day but in accordance with past precedent a substitute public holiday would normally be appointed on the following Monday 3 January in such circumstances.
When a day is appointed as a public holiday, workers are entitled to be absent from their employment on the day and still be paid their base rate of pay for their ordinary hours of work. If a worker agrees to an employer’s reasonable request that they work on a public holiday they must be paid any penalty rates prescribed in the relevant award or agreement (usually, double time and a half).
Without an amendment to the Act, workers working on Saturday 25 December 2010 and Saturday 1 January 2011 would receive only their usual Saturday payment for the day and would not have the right of refusal to work on that day.”
In 2011, further amendments were made to the Holidays Act that meant the changes required for the 2010/2011 holidays did not need to be made in future years.[35] This was achieved by the declaration of a public holiday on the actual date of the traditional holiday as well as an additional public holiday in the following week when 25 December (Christmas Day), 26 December (Boxing Day) or 1 January (New Year’s Day) fall on a weekend.
Since the 2011 amendments, the Holidays Act has provided as follows:
“Section 2
1. A public holiday is to be observed on the days set out in the schedule.”
The Schedule provides that the following days are to be observed as Public Holidays in the State of Queensland:
“1 January (New Year’s Day)
A public holiday is to be observed on 1 January.2 January
A public holiday is to be observed on 2 January only if 1 January is a Sunday.
3 January
A public holiday is to be observed on 3 January only if 1 January is a Saturday.
26 January (Australia Day)
A public holiday is to be observed on—
(a) 26 January; or
(b) if 26 January is a Saturday or Sunday—the following Monday.Good Friday
A public holiday is to be observed on the Friday publicly observed as Good Friday.The day after Good Friday
A public holiday is to be observed on the day after Good Friday.
Easter Sunday
A public holiday is to be observed on the Sunday following Good Friday.
Easter Monday
A public holiday is to be observed on the Monday following Good Friday.25 April (Anzac Day)
A public holiday is to be observed on—
(a) 25 April; or
(b) if 25 April is a Sunday—the following Monday.Labour Day
A public holiday is to be observed on the first Monday in May.Birthday of the Sovereign
A public holiday is to be observed on the first Monday in October.25 December (Christmas Day)
A public holiday is to be observed on 25 December.26 December (Boxing Day)
A public holiday is to be observed on 26 December.27 December
A public holiday is to be observed on 27 December only if 25 December is a Saturday or Sunday.28 December
A public holiday is to be observed on 28 December only if 26 December is a Saturday or Sunday” (emphasis added)Importantly, the following public holidays are listed as public holidays in their own right, and not linked to substitution or required to be “held in place of” another public holiday:
§2 January - A public holiday is to be observed on 2 January only if 1 January is a Sunday.
§3 January - A public holiday is to be observed on 3 January only if 1 January is a Saturday.
§27 December - A public holiday is to be observed on 27 December only if 25 December is a Saturday or Sunday.
§28 December - A public holiday is to be observed on 28 December only if 26 December is a Saturday or Sunday”
The above public holidays operate differently to the other days listed in the Schedule of the Holidays Act. The result of this is that since 2011, there are two public holidays to be observed in Queensland workplaces for Christmas Day, Boxing Day and/or New Years Day in years that the traditional public holiday falls on a weekend. Consequently, on both days, employees maintain the right to be absent from work and still receive their base rate of pay. Importantly, if they agree to work, they are entitled to the relevant rate of pay prescribed by the applicable instrument for working such public holidays.
By way of contrast, other public holidays listed in the schedule are fixed, and some are able to be moved to another day. As an example, 25 April (Anzac Day), is to be observed on 25 April, or if 25 April is a Sunday, the following Monday. Similarly, 26 January (Australia Day) is listed to be observed on either 26 January or, if 26 January is a Saturday or Sunday, the following Monday. In these circumstances, the original public holiday shifts from the first prescribed date to the second. The result being that there is still only one gazetted public holiday to be observed, and as such, an employee’s right to be absent from work and still receive their base rate of pay, and the entitlement to receive any applicable penalty rates for work performed apply only to the one day.
Importantly, Section 3A of the Holidays Act provides as follows:
“3A References to public holidays in industrial instruments under Industrial Relations Act 1999
To remove any doubt, it is declared that—
(a)a reference in an industrial instrument under the Industrial Relations Act 2016 to a public holiday is taken to include 2 January, 3 January, 27 December, and 28 December when those days are to be observed as public holidays under section 2 or 3;”
I consider it likely that this clarification was included in the Holidays Act for the purpose of putting beyond doubt that even where State Awards or Agreements do not list these specific dates, they are to be read as if they were a part of the relevant instrument, to ensure that any public holiday provisions, such as penalty rates, would extend to these new additional days, noting that at the time the legislation was drafted, many such industrial instruments would not have been updated to reflect the shift from substitute public holidays to additional public holidays.
I note at this point that the Agreement the subject of this dispute is a federally registered agreement and not one made under the Industrial Relations Act 2016 (Qld) (IR Act) however, I do consider section 3A of the Holidays Act to be instructive as to its overarching intention and of assistance when considering the context and purpose of the public holiday provisions of the Agreement. I also have more to say on the applicability of the IR Act to this dispute further on in this decision.
Substitute Public Holidays
The FW Act also captures substituted public holidays via a specific reference at section 115 of the FW Act, which provides:
“Substituted public holidays under State or Territory laws
(2)If, under (or in accordance with a procedure under) a law of a State or Territory, a day or part-day is substituted for a day or part-day that would otherwise be a public holiday because of subsection (1), then the substituted day, or part-day is the public holiday.”
Section 115(2) is intended to ensure that if a State or Territory Government “substitutes” a public holiday for another day, the relevant provisions will apply to that day, in place of the original public holiday. Essentially, when one day is substituted for another the total number of public holidays does not change. Importantly, since the 2011 amendment to the Holidays Act, the term “substitute” does not appear in the schedule of the Holidays Act. The effect of this is that in 2011, the total number of public holidays to be observed in Queensland Workplaces increased.
This distinction between additional public holidays and substitute holidays was considered in the 4 yearly review of modern awards – Public Holidays (4 Yearly Review) where the following was found:[36]
“[110] We have outlined earlier the operation of the NES. This includes the capacity for State or Territory governments to establish both additional and substitute public holidays for that purpose. Under s 115(2), where a substitute day is created, it is that day and not the original day (such as 25 December) that is the public holiday for the purposes of the NES (emphasis added).
[111] The practice across the various jurisdictions is not consistent. For instance, where Christmas Day falls on a weekend in Victoria, the relevant legislation substitutes another day for 25 December. In South Australia, except where a Sunday is involved, the same result occurs. In other States and Territories, either as a result of legislative arrangement or proclamation, in recent years an additional public holiday has been established. In those jurisdictions, both the original and additional days are public holidays for the purposes of the NES (s 115(1)(b)) (emphasis added).”
Having considered the above, I find that 2 January, 3 January, 27 December, and 28 December when those days are to be observed in accordance with the Schedule of the Holidays Act are not substitute public holidays, nor are they holidays to be held in place of other public holidays, they are public holidays in their own right. Consequently, I find that 27 December 2022 was a public holiday for the purposes of the NES. I now turn to the question of whether or not the Agreement displaces any such public holidays.
Section 115(3) of the FW Act does allow agreements and awards to include certain terms that alter public holiday provisions, but these are limited to substituting an existing public holiday for another day.
“Substituted public holidays under modern awards and enterprise agreements
A modern award or enterprise agreement may include terms providing for an employer and employee to agree on the substitution of a day or part-day that would otherwise be a public holiday because of subsection (1) or (2)”
This provision clearly contemplates that the Parties can agree to substitute a public holiday for another day. In this situation, the original public holiday would cease to be a public holiday and would no longer attract any associated penalty rates, as these entitlements would shift to the agreed date, in the same way that occurs if a public holiday is substituted for another date by the relevant State or Territory legislation.
Whilst neither party has provided submissions to this point, I consider it likely that section 115(3) of the FW Act is the provision that the Parties relied upon to fix certain public holidays to particular dates. I accept that this is a proper use of section 115(3) with respect to certain public holidays such as Anzac Day, which the Parties have agreed to fix to 25 April, and Australia day, which the Parties have agreed to fix to 26 January. In this matter however, when considering Christmas Day (and the other public holidays the subject of the dispute) it appears that rather than substituting a public holiday for another date, the Parties have in fact substituted a public holiday for another public holiday. Importantly, whilst sections 115(2) and 115(3) of the FW Act allow any of the public holidays gazetted by the Holidays Act to be substituted for another day, it cannot be that this is intended to allow a gazetted public holiday to be substituted for another gazetted public holiday as the result of this would be a reduction in the overall number of public holidays to which employees are entitled.
This same notion was expressed by the Applicant Parties’ contention that the number of public holidays that the employer will recognise must be equal to or greater than those that would apply to an agreement-free employee in a Queensland workplace.[37] Taking the above into consideration, I agree with the Applicant Parties on this point and find that in order to comply with the NES, the Agreement must not result in less public holidays being observed than would if not for the Agreement.
Is clause 58.1(xv) inconsistent with the NES?
QR submit that a key consideration of the operation of clause 58 of the Agreement is the inclusion of the words “or” before clause 58.1(xv):
“or
(xv) any such day appointed under the Holidays Act 1983 (Qld), to be kept in place of any such holiday (i.e. a gazetted public holiday).”
QR contend that the function of the “or” means that an employee can benefit from either a date fixed by clause 58.1 of the Agreement or a substitute day, provided by the Holidays Act.[38] They further propose that the practical outcome of this is instructive when determining the days that an employee is entitled to receive penalty rates.[39]
Section 115(1)(a) of the FW Act provides a list of public holidays for the purpose of the NES. This list is similar to the list provided at 58.1 of the Agreement. Section 115(1)(b) however provides:
“(1) The following are public holidays:
(a)…….
(b) any other day, or part day, declared or prescribed by or under a law of a State or Territory to be observed generally within the State or Territory……….”
The above provision clearly provides that any other public holiday declared by a State or Territory Government is also a public holiday for the purposes of the NES. The Agreement, however, only provides for any such public holidays to be “in place of” one of the public holidays listed in clause 58.1 of the Agreement. Consequently, the plain meaning of 58.1(xv) appears to be that no new public holidays declared by the State Government are capable of being observed during the life of the Agreement, unless they are in place of, or substituting one of the holidays as provided in clause 58.1 of the Agreement. This appears to be a significant departure from the NES entitlement which could result in employees receiving less public holidays than they are entitled to under the NES.
In summary, clause 58.1 of the Agreement provides the “applicable public holidays” to be observed. There is no dispute that the public holidays the subject of this dispute do not appear in this list. Consequently, on plain reading of its terms, the Agreement, does appear to be inconsistent with the NES in that it does not prescribe all of the public holidays applicable to workers in Queensland workplaces, nor does it provide for any new public holidays that are prescribed by a State or Territory in accordance with 115(1)(b). The question for further consideration however, is whether clause 58 of the Agreement is intended to prescribe all public holidays, or as asserted by QR, is its function to prescribe just those public holidays for which penalty rates apply?
Consideration – Element 2 – The meaning of clause 58
To provide context to this consideration, it is relevant to briefly examine the history of the Agreement.
The Parties provided an agreed statement of facts outlining the relevant agreements that have covered Mr McMillen and his colleagues since the 2010 and 2011 amendments were made to the Holidays Act. Essentially, there have been four applicable agreements:
QR Passenger Pty Ltd Traincrew Union Collective Workplace Agreement 2009 (2009 Agreement);
Queensland Rail Traincrew Certified Agreement 2013 (2013 Agreement);
Queensland Rail Traincrew Enterprise Agreement 2017; and
Queensland Rail Traincrew Enterprise Agreement 2020.
The 2009 Agreement contained the following with respect to Public Holidays:
“67. Payment for working nominated penalty payment days
Payment for working 1 January, 25 December
Employees who work on 1 January or 25 December will:
• In the case of ordinary hours, have all time worked credited to
their work cycle and receive an additional payment of 50% of
the full flat rate for all time worked. This payment will be made
in the fortnight during which the hours are worked.
• In the case of hours worked on a nominated leisure period,
employees will be paid for all hours worked on the designated
leisure period at 175% of the full flat rate. The hours worked
on the nominated leisure period will not be credited to the
employee’s work cycle.
Payment for working Labour Day public holiday
Employees who work the Labour Day public holiday, will:
• In the case of ordinary hours have all time worked credited to
their work cycle and receive an additional payment of 150%
of the full flat rate. This payment will be made in the fortnight
during which the hours are worked.
• In the case of hours worked on a nominated leisure period, be
paid at 250% of the full flat rate. The hours worked on the
nominated leisure period will not be credited to the employee’s work cycle.”
It is relevant to note that the 2009 provisions were silent on all public holidays other than 25 December, 1 January and Labour Day. Neither party has advanced any submissions to explain why this was the case, or how other public holidays were treated.
Whilst the 2009 Agreement was approved under the Workplace Relations Act 1996 it did provide, at clause 8, as follows:
“8. Australian Fair Pay Conditions Standard
The conditions set out in this Agreement will equal or exceed those conditions in the Australian Fair Pay and Conditions Standard as set out in the WR Act or replacement legislation, as amended from time to time.”
As such, the public holiday provisions of the NES would have applied from its commencement on 1 January 2010.
The 2009 Agreement was replaced by the 2013 Agreement. The Public Holiday provisions contained in the 2013 Agreement provide as follows:
“11.10 What penalty payments you may be entitled to?
…
(v) What will you receive for working on certain public holidays?
Payment for working 1 January, 25 December:
· In the case of ordinary hours
Employees will have all time worked credited to their work cycle and receive an additional payment of 50% of the full flat rate for all time worked. This payment will be made in the fortnight during which the hours are worked.
· In the case of hours worked on a nominated leisure period
Employees will be paid for all hours worked on the designated leisure period at 175% of the full flat rate. The hours worked on the nominated leisure period will not be credited to the employee’s work cycle.
Payment for working Labour Day public holiday
· In the case of ordinary hours
Employees will have all time worked credited to their work cycle and receive an additional payment of 150% of the full flat rate. This payment will be made in the fortnight during which the hours are worked.
· Hours worked on Labour Day which is also an employees nominated leisure period
Will be paid at 250% of the full flat rate. The hours worked on the nominated leisure period will not be credited to the employee’s work cycle.”
It is clear that the public holiday provisions as they appeared in the 2009 Agreement remained relatively unchanged in the 2013 Agreement. This is curious, given the significant changes to the Public Holidays Act that had occurred in 2011. It is also relevant to note that the 2013 Agreement was certified by the Queensland Industrial Relations Commission (QIRC) under the Industrial Relations Act 1999 (IR Act 1999). As noted by the Parties in the statement of agreed facts, by virtue of a decision of the High Court which deemed Queensland Rail was captured by the federal industrial relations jurisdiction, the 2013 Agreement was later deemed to be technically invalid (for reasons unrelated to the public holiday provisions), however the Parties agreed to it having continued administrative application until it was replaced by the 2017 Agreement, which was negotiated and approved under the FW Act.[40]
The 2013 Agreement contained the following with respect to its operation:
3 How do you interpret this document?
…
The conditions set out in this Agreement will equal or exceed those conditions in the relevant legislation, and as amended from time to time.”
The relevant legislation at the time the 2013 Agreement was originally certified by the QIRC would have been the IR Act 1999, and the Holidays Act. This does raise the question of what should have applied under that Agreement, given section 3A of the Holidays Act provides that any industrial instruments under both the IR Act 1999 and the IR Act 2016 were to be read as incorporating each of the public holidays created by the 2011 amendments.
Again, neither party has provided submissions to this point. It is therefore unclear how the 2013 Agreement dealt with public holidays other than those specifically listed. What is clear though, is that despite the significant changes to the Holidays Act in 2011, including the specific provisions provided by section 3A of the Holidays Act, the Parties made no changes to the way in which public holidays operated until the 2017 Agreement.
On the material before me, it seems likely that having not picked up on the significant changes to the Holidays Act in 2011, the Parties continued to treat the Christmas Day, Boxing Day and New Year’s Day public holidays as they were prior to the amendments. The effect of this understanding was that in a year where Christmas Day fell on a weekend, a worker who worked Christmas Day 25 December would receive no public holiday entitlements, including penalty rates, but the worker who worked on what the Parties deemed to be the substituted day (27 December) would. This was the same issue that had been identified by the Queensland legislators in 2010 and 2011. The legislative solution was to remove the notion of one public holiday being substituted for the other altogether, and instead, ensure that in the years when this occurs, both days are public holidays, with the applicable entitlements.
Having not been provided any evidence to the contrary, it seems likely that this misconception continued to frame the Parties’ treatment of these public holidays up to and during the negotiation of the 2017 Agreement. It is therefore understandable that the Parties sought to implement provisions in the 2017 Agreement to address what still would have presented as the inherent unfairness of this by fixing certain public holidays to their traditional dates, including fixing the Christmas Day public holiday to 25 December, in preference to what they still appear to have deemed to be the substitute day.
The 2017 Agreement was negotiated under the FW Act. The 2017 Agreement was the first time that any significant changes had been made to public holiday provisions. In a significant departure from the 2009 and 2013 Agreements, the 2017 Agreement provides a list of “Applicable public holidays” at clause 52.1 and at clause 52.3, lists the penalty rates that apply to those dates. Again, neither party has advanced any submissions as to why they took such a different approach to the structure of the 2017 Agreement. What the Parties do agree on is that it was their joint intention to define the specific days that penalty rates would apply, and further, that where an employee worked both days (25 and 27 December) they would only be entitled to be paid penalty rates for 25 December. Again however, this appears to have been based on the Parties incorrect understanding that only one of these days was a public holiday.
It is noted that the relevant public holiday provisions as they appeared in the 2017 Agreement remained relatively unchanged in the 2020 Agreement, apart from the addition of three extra public holidays in the 2020 Agreement.
Interestingly, and to this very point, since the 2017 Agreement was drafted, a number of additional public holidays have been declared in Queensland including:
Easter Sunday (declared 2017)
Christmas Eve after 6pm (declared 2019)
National Day of Mourning to commemorate the death of Queen Elizabeth II (declared 22 September 2022)
The post agreement treatment of these days is instructive as to the Parties’ understanding of the Agreement and the Holidays Act at the time. Having been gazetted after the 2017 Agreement was approved, these days were not included in the list of prescribed public holidays at clause 52.1 of the 2017 Agreement. It is also clear that there were additional public holidays that were not held in place of other public holidays (as per clause 52.1.12 of the 2017 Agreement). The Parties have confirmed however, that with the exception of Easter Sunday 2017, which occurred on 16 April 2017, each of the new public holidays gazetted during the life of the 2017 Agreement were honoured by QR, via what they term an “administrative decision”.[41]
Further, in respect of the penalty payments payable, the administrative application was consistent with clause 52.3 of the 2017 Agreement (being 150% of the full flat rate for all time worked or 175% of the full flat rate if they worked during a nominated leisure period).[42]
These arrangements continued for the life of the 2017 Agreement and when it came time to draft the 2020 Agreement, these public holidays were added to the list of public holidays prescribed at clause 58.1 of the 2020 Agreement.
This issue again arose under the 2020 Agreement when, in 2022, a special public holiday was gazetted to coincide with the National Day of Mourning to commemorate the death of Queen Elizabeth II. Again, this public holiday did not appear in clause 58.1 of the Agreement, nor was it picked up by clause 58.1(xv), however the Parties have confirmed that the holiday was observed, and relevant penalty rates were paid to any worker who worked on this day.[43]
In contrast, whether knowingly or not, the Parties failed to acknowledge in this same way, the three additional public holidays that were created in 2011, nor took the opportunity to incorporate into the Agreement the capacity created by the NES to add additionally gazetted public holidays by virtue of section 115(1)(b) of the FW Act.
Viewed objectively, the actions of the Parties with respect to the additional public holidays that were gazetted during the life of both the 2017 and 2020 Agreements indicate an understanding, and acceptance that any newly gazetted public holidays must be honoured regardless of the provisions of the enterprise agreement, again adding to the likelihood that the Parties incorrectly understood the operation of the Holidays Act, as it related to the holidays the subject of this dispute, when drafting and applying the 2017 and 2020 Agreements.
Do the words have a plain meaning?
The starting point when construing the meaning of any clause is the ordinary meaning of the words, read as a whole and in context. It is therefore instructive that clause 58 of the Agreement is titled “Public Holidays”. It is not titled, “public holidays for which penalty rates apply” nor is it titled “penalty rates for working certain public holidays”.
It is also of note that clause 58 is the only part of the Agreement that prescribes public holiday entitlements and there are no other provisions within the Agreement which serve this purpose. This is particularly relevant when noting that clause 5 of the Agreement provides that it shall prevail over all Awards and Agreements in their entirety.
Similarly, the sub-heading at clause 58.1, “Applicable Public Holidays” is not qualified in any way, and on plain reading, would indicate that the purpose of the sub-section is to prescribe the public holidays that are applicable to workers under the Agreement.
Clause 58.1 of the Agreement relevantly provides:
“58.1 The following public holidays and associated payments will apply:…” (emphasis added)
Again, on plain reading, the primary purpose of 58.1 would seem to be to prescribe the public holidays that will be observed under the Agreement. The use of “and” denotes that, as a secondary function, the sub-section also prescribes the penalty rates that will be applied if work is performed on such public holidays.
Similarly, Clause 58.3 of the Agreement provides:
“Payment for public holidays
58.3 Payment for working public holidays (as defined in clause 58.1)…”
In the same way that clause 58.1 sits under the subheading “Applicable Public Holidays”, clause 58.3 sits under the subheading “Payment for public holidays”. Again, the sub-heading is not qualified in any way. It is not titled “payment for certain public holidays” or “payment for some public holidays”. Clause 58.3 goes on to prescribe “payment for working public holidays (as defined in 58.1)”. The plain meaning of these words can also be taken to be that 58.3 prescribes the payment to apply to public holidays, which are “defined” in clause 58.1. As already explored, if clause 58.1 is taken to prescribe all applicable public holidays, it then follows that clause 58.3 should be similarly construed to mean that the penalty rates also apply to all public holidays.
Clause 58.4 of the Agreement provides:
“58.4 If the period during which an employee takes paid leave includes a day or part-day that is a public holiday in the place where the employee is based for work purposes, the employee is taken not to be on paid leave on that public holiday.”
As there is no other list within the Agreement that prescribes applicable public holidays, and the Agreement operates to the exclusion of the Award, it follows that it must be the work of clause 58.1 to prescribe all public holidays that are to be observed for the purpose of all of the provisions within clause 58, including for 58.4. Similarly, there are references to “public holidays” throughout the Agreement. The absence of any other public holidays provisions or a definition of public holidays in the Glossary contained at Schedule 1 of the Agreement adds weight to a finding that it is the work of clause 58 to provide such a list for all purposes, not just for the purpose of prescribing penalty rates.
It is also of note that the only public holidays not listed in clause 58.1 are those that had, prior to 2011 been treated as “substitute public holidays”. It again seems likely that it was the Parties misunderstanding of the Holidays Act that resulted in certain public holidays being omitted from the list in clause 58.1, rather than a deliberate decision to remove them from the list.
Having considered the plain meaning of the words, and their place within the Agreement, I find that the ordinary meaning of clause 58 is that it intended to prescribe all public holidays that are applicable to workers in Queensland workplaces. The established principles of agreement interpretation however, require that I consider other relevant factors when construing the meaning of a particular clause.
What is the intended purpose of clause 58 of the Agreement?
A threshold question is whether clause 58 was intended to provide a list of all applicable public holidays or whether, as suggested by QR, the role of 58.1 is only to prescribe a list of public holidays for which penalty rates will apply.
Whilst the Applicant Parties did not address this question specifically, they are clearly of the view that the clause is intended to capture the provisions that apply to public holidays generally, and to that end, that the list of public holidays prescribed at clause 58.1 of the Agreement is intended to capture all public holidays that are to be observed in Queensland workplaces.
QR do not make any submissions regarding Clause 58 as a whole. Their position is based on their view that there is a distinction between a day being declared as a public holiday and the penalty rates that are prescribed by the Agreement. They propose that the Agreement makes this distinction at clause 58.3, which provides for additional payments to be made for working on those public holidays specifically prescribed in clause 58.1. They state:[44]
“The current application of these clauses is that an employee covered by the EA is paid public holiday pay rates for the public holiday listed by subclause 58.1(i)-(xiv). By virtue of subclause 58.1(xv), the EA also provides for payment for any gazetted public holiday where such public holiday is kept in place of one listed in subclause 58.1(i)-(xiv). For example, where one of the public holidays listed in subclause 58.1(i)-(xiv) is moved to an alternative date by way of gazette.
The current application of these clauses do not apply to additional public holidays that may be gazetted. For example, if an employee works both the listed public holiday and any additionally gazetted public holiday, such as both Christmas Day (25 December) and an additional gazetted public holiday for 27 December, they are only paid public holiday pay rates for work done on Christmas Day (25 December).”
This is an arguable position. As already explored, the NES provides various entitlements with respect to public holidays, however there is no express requirement under the NES to pay penalty rates for public holidays. It is therefore open to the Parties to determine on which days, if any, penalty rates will be paid. I accept QR’s position in this regard however, again, this is only one of several elements that must be considered.
I also note that the Applicant Parties do not disagree with QR’s interpretation of clause 58.3 on the basis that if clause 58.1 is intended to list all public holidays, then 58.3 would rightly prescribe penalty rates for all such public holidays.
In response to Mr McMillen’s F10, QR explain their understanding of the intention of the partes as follows:[45]
“Queensland Rail’s understanding of the intention of the parties in the enterprise agreement negotiations from 2020, prior to approval of the Agreement. Importantly, it was agreed in the 2020 negotiations that “The business will ensure that where the Public Holiday clause references an actual date that date will be observed as the Public Holiday”. The intention of the parties was to observe the actual day, for example Christmas Day, to acknowledge the important (sic) of these days to employees and their families”. (emphasis added)
It is of note that there is no mention of penalty rates, nor is it argued that the intention was to reduce the number of public holidays for which penalty rates apply, rather, I take this to mean that the intention was, as already explored, simply to stop 25 December being “substituted” for another day.
Notwithstanding any of the above, had it been the intention of the Parties that the purpose of clause 58 was to list certain gazetted public holidays, for the purpose of identifying the specific days to which penalty rates apply, as submitted by QR,[46] then surely there would have been some contemplation within the Agreement as to how any gazetted public holidays that are not listed in clause 58.1 of the Agreement were to be treated. As has already been explored, the Agreement does not provide any such provisions. It is difficult to rationalise that the Parties would have knowingly omitted such an important provision. Again, this adds weight to the notion that the Parties unintentionally misinterpreted the Holidays Act when developing the list of public holidays to be included in the 2017 and 2020 Agreements.
I have seen no evidence to suggest any negotiation or deliberate move to reduce the number of public holidays, nor of any deliberate decision that the new public holidays created in 2011 would not attract penalty rates. I consider that it was the Parties’ incorrect interpretation of the Holidays Act since 2011 that led to the unnecessary substitution of the 25 December public holiday for the 27 December public holiday. Had the 2011 amendments been applied at the time, I consider it likely that the additional public holidays would have been added to the relevant public holidays provisions in the 2013 Agreement. That this did not occur, led to the situation that the Parties agree they sought to address in 2017.
Viewed objectively, and on the material before me, I consider it most likely that all Parties had mistakenly held the view that when Christmas Day fell on a weekend, the public holiday that is gazetted to occur 25 December was substituted with another public holiday on 27 December. Based on this understanding I accept that it was the intention of the Parties that penalty rates would only be paid on the date prescribed, but again, this was based on their incorrect understanding that 27 December was not already a prescribed public holiday in the relevant years.
Again, I consider it likely that the Parties held a misconception as to the way the Holidays Act applied. Viewed objectively, I find it most likely that the Parties intended the list at clause 58.1 of the Agreement to capture all public holidays that were applicable to workers in Queensland. The fact that the additional public holidays created in 2011 do not appear on this list is a direct result of this misunderstanding.
In this regard, I prefer the explanation that the Parties’ intention in 2017 was to bring an end to what they thought was the required substitution of the traditional public holiday (i.e. Christmas Day 25 December) for the substituted public holiday (27 December) over the alternative explanation that the Parties intended to remove a public holiday altogether.
The industrial environment
A relevant consideration in this matter is the relationship of the Parties. The Rail industry is highly unionised, and the Parties have a long history of robust negotiation. As noted in the Union Parties’ submissions, there is no accusation that there has been any deliberate intention to “swindle” employees out of their entitlement, rather the Union Parties state:[47]
“The Unions were not aware of the specific content of the PH Act during bargaining and have not sought to bring this dispute on to further an additional claim. Rather, with consideration of the complexities concerning the operation of the Fair Work Act 2009 (Cth)(“ the FW Act”) and the PH Act it has become apparent to the Unions (and the Applicant) that the current clause is inconsistent with the NES and PH Act.”
And further:[48]
“In this instance, the parties genuinely and in good faith, agreed to something that was not entirely within the confines of the NES. Given the complexity of how one goes about identifying the NES entitlement, we do not think that anyone at the negotiating table intended to either undermine the NES entitlement or swindle the other party out of an extra day’s public holiday.
However, even if it were the case that there was some swindling intended, it makes no difference because the NES provisions prevail over any agreement made between the parties during those negotiations”.
I have been presented no evidence to suggest that the Parties understood that there were additional public holidays created in 2011 nor have I seen any evidence of any deliberate decisions that the penalty rates would not apply to these new public holidays. I find it hard to accept that industrially mature parties such as the RTBU and the AFULE would have knowingly accepted a position that effectively reduced the number of public holidays applicable to workers, or in the alternative, that they would have accepted, without dispute, the notion that select public holidays would not attract penalty rates. I also find it difficult to accept that QR would have knowingly taken any action that would have reduced worker entitlements without such negotiations having occurred.
Similarly, I see the post agreement conduct of the Parties with respect to the additional public holidays that were created during both the 2017 and 2020 Agreements as a clear indication that the Parties were of the understanding that clause 58.1 was intended to prescribe all gazetted public holidays and that clause 58.3 was intended to prescribe the penalty rates that applied to them all. That these additional public holidays were observed without question surely also speaks to the likelihood that any attempt on the part of QR to not honour a newly created public holiday, or to restrict the payment of penalty rates to such a public holiday would have been met with significant opposition from the unions.
Summary of findings relating to element 2 – the meaning of clause 58
Having considered the language of the Agreement, in light of its industrial context and purpose, along with the intention of the Parties, the history of the Agreement and the post Agreement conduct of the Parties, I am satisfied and find that the purpose of clause 58 is to prescribe the arrangements that apply to all of the public holidays that apply to workers in Queensland Workplaces. Further, I find that the intention of clause 58.1 is to list all such public holidays.
Impact of findings relating to elements 1 and 2
With this intention established, it is clear that clause 58 of the Agreement is inconsistent with the NES in that it does not prescribe all such public holidays, nor does it allow for any additional public holidays that are gazetted to be incorporated as required by section 115(b) of the FW Act.
Section 61(1) of the FW Act provides that the NES sets out the minimum standards that apply to the employment of employees which cannot be displaced, even if an enterprise agreement includes terms of the kind referred to in subsection 55(5). Consequently, I find that clause 58 of the Agreement displaces a minimum NES entitlement. I further find that section 56 of the FW Act, which provides that any term within an agreement that contravenes section 55 shall have no effect, should be enlivened.
The Applicant Parties submit that to ensure compliance with the minimum obligations under the NES, the Parties included clause 8 within the Agreement. They argue that this was done as a catch-all, should the Parties have missed something that created an inconsistency with the NES. Clause 8 provides:[49]
“8 National employment standards
The conditions set out in this agreement will equal or exceed those conditions in the National Employment Standards (“NES”) as set out in the Act or replacement legislation, and as amended from time to time.”
I agree with the Applicant Parties on this point. Clause 8 is a facilitative provision that allows for any terms within the Agreement that provide lessor conditions than those provided for under the NES to be amended to reflect the minimum standard. These types of clauses are commonly referred to as “NES Precedence Clauses” and are broadly understood to be used as a safety net, capable of rectifying any instance where an agreement, either intentionally or inadvertently provides less than the NES. Consequently, I find that clause 8 of the Agreement is enlivened, such that clause 58.1 should be read to contain all of the public holidays contained within the Schedule of the Holidays Act.
Consideration – Element 3 – Do the penalty rates prescribed at clause 58.3 of the Agreement apply to all public holidays or just those that are presently prescribed in 58.1.
I note that the Applicant Parties do not disagree with QR’s interpretation of clause 58.3, in so far as QR contend that its purpose is to prescribe the penalty rates that apply to the list of applicable public holidays prescribed at clause 58.1 of the Agreement.
I again note and have accepted QR’s contention that there is a distinction between a day being declared as a public holiday and the penalty rates that are prescribed by the Agreement.[50] However, having found that clause 8 of the Agreement is enlivened, such that clause 58.1 should be read to contain all of the public holidays contained within the Schedule of the Holidays Act, it then follows that the penalty rates provided in 58.3 of the Agreement also apply to all such public holidays.
Summary and Key Findings
The settlement of this dispute required that I interpret the meaning of clause 58 of the Agreement, to ascertain whether or not Mr McMillen was entitled to receive penalty rates for work he performed on 27 December 2022. In forming my views, I have considered three key elements.
Having taken each of these elements into consideration, I have not been persuaded by QR’s contention that the purpose of Clause 58 is to provide a limited list of public holidays for which penalty rates apply. I do accept their argument that a day being prescribed as a public holiday does not automatically mean that penalty rates apply, however having considered all of the other elements of this dispute, I have not been convinced that this was the intention of the Parties. Moreover, I consider that the Parties’ actions to fix the date of the Christmas day holiday to 25 December were based on an incorrect understanding and interpretation of the Holidays Act, the intent of which was to cease the practice of substituting the Christmas Day public holiday for another date.
Specifically, with respect to the first element, whether the Agreement is consistent with the Holidays Act and the NES, I find that clause 58.1 of the Agreement is intended to provide a list of all applicable public holidays to be observed. I find that the following public holidays do not appear in this list:
2 January - A public holiday is to be observed on 2 January only if 1 January is a Sunday.
3 January - A public holiday is to be observed on 3 January only if 1 January is a Saturday.27 December - A public holiday is to be observed on 27 December only if 25 December is a Saturday or Sunday.
28 December - A public holiday is to be observed on 28 December only if 26 December is a Saturday or Sunday”
I have further found that the Agreement is inconsistent with the NES in that it does not provide for any new public holidays that are prescribed by a State or Territory in accordance with section 115(1)(b) of the FW Act.
Regarding the second element, I have found that the purpose of the clause 58 of the Agreement is to prescribe the public holiday provisions that relate to all public holidays that are to be observed in Queensland workplaces, including those noted above. Consequently, I have found that clause 8 of the Agreement is enlivened to ensure that the provisions of the Agreement equal or exceed those set out in the NES.
With respect of the third element, having found that the scope of clause 58.1 of the Agreement is broadened to include those public holidays listed above, I have also found that the public holiday penalty rates prescribed at clause 58.3 applies to all gazetted public holidays, including those listed above.
Conclusion
Having found that conditions set out in the Agreement do not equal or exceed the conditions prescribed by the NES, clause 8 of the Agreement is enlivened to ensure all public holidays listed in the Schedule of the Holidays Act are incorporated into clause 58.1 of the Agreement, and that Clause 58.1(xv) is amended to the extent it conflicts with provisions in section 115(1)(b) of the FW Act.
Having found that the penalty rates prescribed in clause 58.3 of the Agreement apply to all Gazetted Public Holidays in Queensland, including 27 December, in years where 25 December falls on a Saturday or Sunday, I find that Mr McMillen is entitled to be paid the relevant penalty rates for work he performed on 27 December 2022.
COMMISSIONER
[1] Form F10 P.7.
[2] Applicant Parties Submissions P.4, 6-7.
[3] Applicant Parties Submissions P.4.
[4] Applicant Parties Submissions P.5.
[5] Ibid P.6.
[6] Ibid P.4.
[7] Ibid P.6-7.
[8] Ibid P.7.
[9] Ibid P.5.
[10] Respondent Submissions P.2.
[11] Ibid P.2.
[12] Ibid P.3.
[13] Ibid.
[14] Ibid.
[15] Ibid.
[16] Ibid.
[17] Ibid P.4.
[18] Ibid.
[19] Ibid P.2.
[20] Ibid P.3.
[21] Ibid P.4.
[22] Ibid.
[23] Ibid.
[24] Ibid.
[25] Ibid P.5.
[26] Ibid.
[27] Ibid P.2.
[28] Gemma Tracy Richman v Curtin University T/A Curtin University[2024] FWC 645 at 38; Kucks v CSR Ltd (1996) 66 IR at 184.
[29] [2018] FCAFC 131.
[30] [2020] FCAFC 123, [65].
[31] Australian Workers Union v Orica Australia Pty Ltd (Orica)[2022] FWCFB 90; Fresh Food Management Services Pty Ltd [2023] FWCFB 97; Sydney International Container Terminal Pty Limited t/a Hutchinson Ports v CFMMEU[2023] FWCFB 87; The Appellant v Commonwealth of Australia as represented by the Australian Federal Police[2024] FWCFB 196, [23]
[32] Berri [2017] FWCFB 3005; Golden Cockrel [2014] FWCFB 7447
[33] Holidays Amendment Bill 2010.
[34] Holidays Amendment Bill 2010 - Explanatory Notes.
[35] Holidays and Other Legislation Amendment Bill 2011.
[36] [2018] FWCFB 4.
[37] Ibid P.5.
[38] Applicant Parties Submissions P.5.
[39] Ibid.
[40] Statement of Agreed Facts - Public Holiday Extracts Chronology.
[41] Statement of Agreed Facts - Public Holiday Extracts Chronology.
[42] Ibid.
[43] Ibid.
[44] Respondent Submissions P.3.
[45] Respondent Email Response to F10 dated 16 May 2023.
[46] Respondent Submissions P.5.
[47] Applicant Parties Submissions P.4.
[48] Ibid P.6-7.
[49] Ibid P.7.
[50] Respondent Submissions P.4.
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