Mr Rudy Wendt v Iplex Pipelines Australia Pty Ltd T/A Iplex Pipelines

[2015] FWC 7868

[2015] FWC 7868

FAIR WORK COMMISSION

DECISION

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

Mr Rudy Wendt
v
Iplex Pipelines Australia Pty Ltd T/A Iplex Pipelines
(C2015/2911)

Manufacturing and associated industries
SENIOR DEPUTY PRESIDENT RICHARDS	BRISBANE, 17 NOVEMBER 2015

Whether hours performed beyond average 38 hours within rostered 12 hour shifts are paid at overtime rates or the all-purpose rates – construction of Remuneration and Overtime clauses – relevance of Better Off Overall Test – provisions read conformably – cannot look behind FWC Member’s decision to approve agreement.

[1] This decision - which amounts to a statement of opinion - concerns a dispute notification by Mr Rudy Wendt in relation to his employment with Iplex Pipelines Australia Pty Ltd T/A Iplex Pipelines (“the employer”). Mr Wendt is employed under the Iplex Pipelines Australia Pty Ltd enterprise agreement 2013 – Toowoomba (“the Agreement”).

[2] I have previously issued a decision on a jurisdictional issue in [2015] FWC 7706. This statement of opinion must be read subject to that decision.

[3] Mr Wendt performed duties as a Quality Inspector for the employer.

[4] The dispute arises from the contention by Mr Wendt that he was underpaid for a period of time commencing 6 September 2013 and ending on 30 November 2013. During this period of time, Mr Wendt contends that he performed duties as a 12 hour shift worker on regular rostered hours for an average of 42 hours per week.

[5] In effect, Mr Wendt contends that whereas the employer paid him the loaded rate for all hours worked on the 12 hour shift, Mr Wendt ought to have been paid eight hours at the loaded rate (up to 38 hours) and a further four hours at the overtime rate (based on a disaggregated ordinary time hourly rate of pay set out in Attachment A of the Agreement).

[6] Mr Wendt’s argument is summarised by his submission as follows:

• The ordinary hours of work, as set out in the Agreement, are an average of 38 hours per week but not exceeding 152 hours in 28 days;



• During the relevant period of time, Mr Wendt worked as a 12 hour shift worker on regular rostered hours, which was an average of 42 hours per week or 168 hours in 28 days;



• Mr Wendt was paid at loaded rates set out in the Agreement, for hours worked over and above 38 hours per week;



• The loaded rate does not purport to include overtime rates; and



• Mr Wendt believes that the Agreement should be interpreted so that the overtime rates set out in the Agreement are applied to hours worked over and above 38 hours per week or hours worked above 152 hours in 28 days.

[7] The Agreement provides for loaded rates and base hourly rates of pay (at Attachment A).

Relevant Provisions of the Agreement

20. Overtime

20.1.1 For employees working 12 hour shifts, all time worked before or after the employee starting or finishing time shall be paid for at the rate of double time (calculated on the base ordinary rate).

20.1.2 For all other employees the rates of pay shall be time and one-half for the first three hours and double time thereafter and such double time shall continue until the completion of the overtime.

[…]

22. Remuneration

Remuneration paid to an Employee constitutes the whole of an Employee’s remuneration over a 7-day period and takes into account all aspects and conditions of employment unless otherwise provided for in this agreement.

For the purpose of this agreement, the term

• Ordinary rates shall mean base rate.



• Loaded rate shall mean an all-purpose rate of pay inclusive of all entitlements as specified in this agreement for work performed on continuous and non-continuous seven day shift work. See attachment A.

[8] The Agreement sets out under the heading “Loaded Rate” in the same clause the following information in a table format:

Loaded Rate includes:

• Ordinary rate



• Shift loading



• W/end & pub/holiday penalty rates



• Annual Leave Loading

[9] In the same table, the loaded rate is said to exclude:

• Additional time worked as overtime before or after a rostered shift or a non rostered shift.



• See also attachment A for public holidays that are not rostered shifts.



• Allowances referred to in 22.5

[10] The table format goes on to state:

For the purposes of the remuneration, the loaded rate shall apply to:

• Superannuation […]



• Long service leave



• annual leave



• personal leave



• other authorised leave



• non-rostered overtime

[11] In the same clause, the Agreement, in tabulated form, also includes the following information (in summary) under the heading “Ordinary Rate”. The ordinary rate is said to include:

• Relevant ordinary hours i.e. 38



• Pay rates referred to in Attachment A



• Reasonable additional hours



• RDO buy out

[12] The ordinary rate is said to exclude:

• Shift loading



• Penalty rates (w/end & pub/hols)

[13] The table goes on to state that:

For the purposes of overtime, the Ordinary Rate shall apply.

[14] Clause 12.1 of the Agreement concerns the hours of work and relevantly provides as follows for:

12.1.1 the ordinary hours of work for day workers, subject to the following exceptions, shall be an average of 38 hours per week, but not exceeding 152 in 28 days.

12.1.2 the ordinary hours work may be worked on any days or all days of the week, Monday to Friday. The days on which ordinary hours are worked may include Saturday and Sunday subject to agreement between Iplex and the majority of Employees concerned.

[15] So far only that it was brought to my attention, Mr Wendt’s letter of offer stated that:

“Iplex has implemented a 12 hour shift roster as part of a two shift 24-hour continuous roster over the seven days per week [...].

The shift roster may be varied from time to time to meet the operational needs of the business. Where the shift roster is varied, the company will provide you with at least 4 weeks’ notice of any variation to your shift pattern.

Your loaded rate includes an amount to compensate you for the reasonable additional hours on your days at work (including on a public holiday) in order to perform your duties when you are rostered on a 12 hour shift in accordance with the agreement.

When you are rostered on a 12 hour shift roster in accordance with “Remuneration” and you will receive a loading on your base hourly rate. This shift loading will be applied to your base hourly rate to create a loaded rate which will be an all-purpose rate inclusive of all award entitlements for work performed on a continuous 12 hour shift roster.” (sic)

[16] Mr Wendt claims that he worked an average of 168 hours in 28 days.

[17] That is, Mr Wendt claims that he worked a 12 hour shift on regular rostered hours, which amounted to 42 hours per week.

[18] The maximum ordinary hours under the Agreement cannot exceed 152 hours in 28 consecutive days.

[19] Mr Wendt insists that this means that he worked 16 hours of overtime in each 28 day cycle (that being the number of hours in excess of the maximum number of ordinary hours that may be worked in the cycle), for which he should be remunerated at overtime rates (based on a disaggregated ordinary base rate).

[20] But instead of this outcome, Mr Wendt contends that the employer paid each of those 16 hours at the loaded rate.

[21] Mr Wendt further argues that Attachment A above indicates that overtime is not incorporated into the loaded rates.

[22] The employer contends, to the contrary, that Mr Wendt could only access overtime in accordance with the overtime clause in the Agreement, and that is when he was required to perform work prior to or after his rostered shift. The overtime clause, it was argued, was directive as to the circumstances in which overtime was to apply under the Agreement.

[23] The loaded rate (which incorporates a 43% loading on the base rate) was said to compensate for overtime and other “factors”.

[24] Clause 22 of the Agreement makes this clear, it was pressed, in so far as it states:

Loaded rate shall mean an all-purpose rate of pay inclusive of all entitlements as specified in this agreement for all work performed on continuous and non-continuous shift work. See Attachment A.

Conclusion

[25] The Agreement may or may not be without its drafting imperfections. Further, I note that there is no evidence led in this matter as to the mutual understandings on which the Agreement was entered into. Consequently, I am left with the plain words of the Agreement read in their context. The only external document of any potential relevance is the contract of employment between the employer and Mr Wendt. It is not decisive in any way, of course, but I will make some comment about it in concluding.

[26] As Mr Wendt contends through his legal representative, it might be expected that the tabular representation referred to above at clause 22.1 of the Agreement would note that the loaded rate includes any overtime earned within the continuous shift cycle. Much of Mr Wendt’s argument relies on this apparent omission.

[27] But I do not agree that Mr Wendt’s contention represents an objective construction of the relevant terms of the Agreement read in their context.

[28] The omission of overtime from the tabular representation of the composition of the loaded rate does not detract from the specific words of the Agreement (in the Remuneration clause set out above - Clause 21.1) which contextualise the table by providing its immediately preceding words.

[29] These conditioning words indicate that “loaded rate shall mean an all-purpose rate of pay inclusive of all entitlements as specified in this agreement for all work performed on continuous and non-continuous shift work.”

[30] These specific words are directive as to the intention of the Agreement, and despite what may be said in respect of the inferences to be drawn from the table, they are unambiguous. The specific words in the Agreement must not be read down or set aside: they must be given their operative effect as derived from their plain meaning.

[31] I cannot say that there is an omission - real or apparent - of overtime from the above tables. The tables are simply silent on the issue, but for the directive qualifying introductory words (on which I have focused).

[32] The overtime clause, I add, is constructed conformably with the remuneration clause. In saying this I mean that the overtime clause only contemplates overtime being paid before or after a rostered shift, but not in the course of a regularly rostered shift.

[33] That is, overtime is only payable outside the 12-hour shift roster (for work done prior to or following the shift roster):

For employees working twelve hour shifts, all time worked before or after the Employee’s starting or finish time shall be paid for at the rate of double time (calculated on the base ordinary rate).”

[34] The overtime clause goes on to deal with “all other employees” other than shift workers and the rates to apply (to the non-shift workers) in overtime scenarios.

[35] Reasonably, if overtime had been available to employees on 12 hour continuous shifts as regularly rostered, as was pressed by Mr Wendt, the above clause in some manner would have stipulated this entitlement arising therefrom. But it does not, and it could not, given its relationship to clause 22.1 of the Agreement as cited above.

[36] Again, this clause reflects the definition under the remuneration clause, which states in effect that the loaded rates apply to all hours worked within shifts:

Loaded rate shall mean an all-purpose rate of pay inclusive of all entitlements as specified in this agreement for work performed on continuous and non-continuous seven day shift work. [My emphasis]

[37] The remuneration clause sets out the obligations for payment for hours of work performed within the shift as rostered.

[38] The overtime clause sets out the obligations for payment when work is performed outside the rostered shift hours - in advance of or following the conclusion of the rostered shift.

[39] The construction I have preferred above also accords with the employer’s letter of offer, which may be said to be suggestive, at least, of a common understanding between Mr Wendt and his employer as to how the Agreement is to apply in relevant situations relating to:

• reasonable additional hours; and



• an all-purpose rate for work performed on the 12 hour shift roster.

[40] This decision represents my opinion in relation to the dispute, having heard the parties.

[41] There was some suggestion that the Agreement would not have been approved by the Commission had the hours of work been construed in the manner above. The Agreement was approved in September 2013 by Senior Deputy President Drake, and no undertakings were sought by her Honour.

[42] I am not able to look behind that decision, suffice to say that the judgment made as to the Better Off Overall Test would have been made on the basis of the rates of pay as they were at the time of the approval.

[43] Given my opinion as set out above, which is counter to that advocated on his behalf, Mr Wendt will need to indicate the status of the originating dispute notice in due course.

SENIOR DEPUTY PRESIDENT

Final written submissions:

Applicant – 13 November 2015

Respondent – 13 November 2015

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