Mr Siosiua Masima v Queensland Properties Investments Pty Ltd
[2012] FWA 4137
•15 MAY 2012
[2012] FWA 4137 |
|
DECISION |
Fair Work Act 2009
s.739 - Application for Fair Work Australia to deal with a dispute in accordance with a Dispute Settlement Procedure
Mr Siosiua Masima
v
Queensland Properties Investments Pty Ltd
(C2011/4776)
COMMISSIONER CAMBRIDGE | SYDNEY, 15 MAY 2012 |
Dispute settlement procedure - interpretation of provisions of enterprise agreement - dispute as to payment entitlements arising in respect to attendance at work beyond ordinary finishing time due to hazardous material incident - claim for payment of overtime rates - payment of ordinary time made as alternative to stand down under Part 3-5 (ss. 522-527) of the Fair Work Act 2009.
[1] This Decision is made in respect of an application made pursuant to section 739 of the Fair Work Act 2009, (the Act), for Fair Work Australia (FWA) to deal with a dispute in accordance with a Dispute Settlement Procedure (DSP). The application was lodged at Sydney on 20 June 2011. The application was made by Siosiua Masima (the applicant) and taken against Queensland Properties Investments Pty Ltd, which is a wholly owned subsidiary of Woolworths Limited, and shall be referred to as Woolworths.
[2] The matter is referable to a DSP found at Clause 33 of the Woolworths Limited and Queensland Properties Investments Pty Limited Sydney Regional Distribution Centre Enterprise Agreement 2010 (the Agreement). The question in dispute involved the interpretation and application of the overtime provisions of the Agreement, specifically the terms of sub-clause 15.1.
[3] The matter was the subject of unsuccessful conciliation and proceeded to arbitration which involved a Hearing conducted on 5 April 2012. At the commencement of proceedings and during the conciliation the applicant was represented by the Transport Workers’ Union of Australia (the TWU). Prior to the Hearing FWA was advised that the applicant was represented by Maurice Blackburn Lawyers. Woolworths was represented by Henry Davis York Lawyers.
[4] The applicant was called as the only witness to provide evidence in support of the application.Evidence for Woolworths was provided from two witnesses, Mr Ian Douglas Wilkieand Mr Lea Stuart Jones.
Background
[5] At around 3:15 pm on 5 May 2011, a fire alarm sounded at Woolworths’ Sydney Regional Distribution Centre (the SRDC). The SRDC is located at Sargents Road, Minchinbury. At the sound of the fire alarm the applicant and other employees at the SRDC ceased work and moved to a muster point in accordance with evacuation procedures that are followed in the event of the alarm activation. A short time later the applicant and others were instructed to move to another evacuation point and specifically prohibited from moving to the car park or otherwise away from the site.
[6] Fire Brigade units arrived at the SRDC and it was ascertained that an ammonia leak from refrigeration machinery gave rise to a hazardous material incident as contemplated by the Fire Brigades Act 1989 [NSW]. The Fire Brigade officer in charge of the hazardous material incident at the SRDC on 5 May directed Woolworths’ management to not permit any of its employees or other persons on the site at the time, to move away from the evacuation assembly point. At approximately 4:10 pm the Fire Brigade officer in charge gave authority to Woolworths to allow employees to leave the evacuation assembly point and proceed to the car park and leave the SRDC. It was not until about 6:15 pm before other employees were given the “all-clear” to enter the work locations of the SRDC.
[7] The applicant was one of numerous 10 hour day shift employees at the SRDC who were scheduled to finish work at 3:30 pm on 5 May 2011. The applicant and other day shift employees were delayed by the hazardous material incident and unable to leave the SRDC until about 4:15 pm.
[8] The hazardous material incident of 5 May was caused by an unusual and unpredictable machinery failure which allowed the ammonia to discharge into the atmosphere.
[9] In the months prior to the hazardous material incident of 5 May, the fire alarm was frequently activated at the SRDC and eventually a faulty compressor was discovered as the cause of these alarms. The alarm evacuation incidents in March and April 2011, led Woolworths to invoke the stand down provisions of Part 3-5 (ss. 522-527) of the Act for times during which certain of its employees could not be usefully employed. Consequently certain employees of Woolworths who worked at the SRDC did not receive payment of wages for times during which they were stood down when following evacuation procedures.
[10] The National Union of Workers, New South Wales Branch (the NUWN), represents many of the employees of Woolworths engaged at the SRDC. Officials of the NUWN complained to Woolworths about the stand down of employees in circumstances where evacuation procedures prohibited both the performance of useful work and egress from the site at scheduled finish times. As a consequence of the representations made by the NUWN, Woolworths agreed to make payment at ordinary time rates for all time during which employees may have otherwise been stood down when not usefully engaged because of evacuation procedures including when employees were denied egress of the site after scheduled finish times.
[11] The agreement between the NUWN and Woolworths (the NUWN agreement), to make ordinary time payment for all time associated with observance of evacuation procedures was not documented but was made retrospective to cover periods during March and April when wage payments had been withheld as stand downs had been invoked. The NUWN agreement was applied to the hazardous material incident of 5 May and the applicant amongst all other 10 hour day shift employees who were impacted by that incident, received ordinary time payment for all time up until 4:15 pm when the day shift employees were allowed to egress the SRDC.
[12] The applicant is a member of the TWU and he and 11 other TWU members named in attachment TWU3 to the application made in this matter, have sought additional payment at overtime rates for the 45 minutes that they were denied egress from the SRDC after their scheduled finish time of 5 May. The applicant and the other TWU members named in the application, have sought the additional payment as they assert an entitlement to double time arising under the overtime provisions of the Agreement.
[13] Consequently this dispute involves the interpretation and application of sub-clause 15.1 of the Agreement. The relevant part of clause 15 including sub-clause 15.1 is in the following terms:
“15. OVERTIME
15.1. With the exception of work performed pursuant to clause 8.2 (Part-time Team Members) overtime shall mean all overtime worked before the fixed starting time or after the fixed ceasing time, or in excess of an average 40 hours per week. Overtime shall be paid for at the rate of time and one half for the first two hours and at the rate of double time thereafter, except in the circumstances where Overtime is worked before or after a 10 hour rostered shift In this circumstance the payment will be double time for all overtime worked.”
[14] The claim for payment of double time for the 45 minutes that 10 hour day shift employees were denied egress from the SRDC on 5 May has been advanced on behalf of the applicant as the proper interpretation and application of the terms of sub-clause 15.1 of the Agreement. That interpretation has been opposed by Woolworths.
The Applicant’s Case
[15] In summary, Mr Sivaraman a solicitor from Maurice Blackburn, submitted that the words contained in sub-clause 15.1 of the Agreement were unambiguous and applied to the 45 minutes that the applicant, and others, who were held at the SRDC after their scheduled finish time of 3:30 pm. Mr Sivaraman submitted that the matter was quite straightforward and FWA should provide Orders to require Woolworths to make overtime payments to the applicant and the other 11 named members of the TWU.
[16] Mr Sivaraman sought to rely upon what he described as the well known proposition established by the High Court in the case of Automatic Fire Sprinklers Pty Ltd v Watson 1 (Automatic Fire Sprinklers), that payment arises as an entitlement for service even to those who only stand and wait. Mr Sivaraman said that the applicant and others were directed to remain at the workplace beyond their normal finish time, these employees were ready, willing and able to perform work in accordance with their contracts of employment and through no fault of their own they had to remain at the evacuation assembly point.
[17] Mr Sivaraman submitted that as the applicant and others were directed to remain at work they were entitled to payment in accordance with the terms of the Agreement. According to Mr Sivaraman the overtime provisions of sub-clause 15.1 must apply to the circumstances of the applicant and others for the time between 3:30 pm and 4:15 pm when they were required to remain at the workplace.
[18] Mr Sivaraman said that there was no capacity to apply ordinary time payment for the 45 minutes in question. Further, Mr Sivaraman rejected that Woolworths could alternatively treat the circumstances of 5 May as a basis to invoke a stand down in accordance with the Act. Mr Sivaraman said that a stand down could not be retrospectively applied as to do so would involve an unauthorised deduction from wages in breach of section 324 of the Act.
[19] Mr Sivaraman further submitted that Woolworths had accepted an obligation to pay the employees for time associated with the hazardous material incident and in doing so it must apply the terms of the Agreement. Mr Sivaraman said that Woolworths could not adopt a “halfway position” and pay ordinary time when the Agreement prescribed overtime at double time. Further, Mr Sivaraman submitted that Woolworths had not established that the breakdown of machinery was not something for which it could be reasonably held responsible. Therefore, according to Mr Sivaraman any proposition contemplating stand down as an alternative to the ordinary time payment should be rejected.
[20] Mr Sivaraman urged that the words contained in sub-clause 15.1 of the Agreement be given their unambiguous meaning. Therefore, according to Mr Sivaraman, Woolworths was obliged to make payment to the applicant and all other employees who were held at the SRDC on 5 May after their scheduled finish time, on the basis of overtime at double the ordinary rate.
The Case for Woolworths
[21] Mr Jauncey, a solicitor from Henry Davis York, appeared for Woolworths, and commenced his submissions by acknowledging that the factual circumstances of the case were largely not in issue. Mr Jauncey said that Woolworths strongly rejected the assertion made on behalf of the applicant that the terms of sub-clause 15.1 of the Agreement should have application to the circumstances involving the hazardous material incident at the SRDC on 5 May 2011.
[22] Mr Jauncey submitted that the evidence about the reason for the hazardous material incident on 5 May clearly established that Woolworths could not be reasonably held responsible for that incident. Consequently according to the submissions made by Mr Jauncey, Woolworths was entitled to invoke the stand down provisions of the Act in respect to the hazardous material incident of 5 May. However, Mr Jauncey said that as a practical alternative to a stand down the agreement was reached with the NUWN to pay ordinary time for all time associated with the hazardous material incident. Mr Jauncey submitted that the payment of ordinary time was made as a gesture of good faith, on an ex gratia basis and not as payment in respect to any legal obligation.
[23] Mr Jauncey made further submissions regarding the proper interpretation of the terms of a clause such as the overtime clause 15 of the Agreement and the particular words under examination in sub-clause 15.1. Mr Jauncey referred to the approach to interpretation of Industrial Awards and Agreements established by authority such as that found in the case of Kucks v CSR 2. Mr Jauncey said that it was widely accepted that a narrow or pedantic approach to the interpretation of Industrial Awards and Agreements should be avoided.
[24] Mr Jauncey submitted that sub-clause 15.1 referred to overtime that was “worked” and that this meant that overtime must involve a person performing activities or tasks at the direction of the employer. Mr Jauncey submitted that this interpretation of the word “worked” contained in sub-clause 15.1 was consistent with a long standing principle of industrial law that established that overtime rates are only payable if an employer expressly or impliedly directs an employee to perform work beyond the employee’s usual start or finish times.
[25] Mr Jauncey submitted that in order to qualify as overtime worked within the meaning of sub-clause 15.1 of the Agreement it was essential as a minimum condition that the individual must have been made subject to direction by or at the initiative of the employer. Further, Mr Jauncey said that it was not enough that the employee was commanded to stand and wait by someone else even if the direction from that other person, in this case the Fire Brigade officer in charge of the hazardous material incident, was communicated through the mouthpiece of an employer representative.
[26] Mr Jauncey made further submissions which acknowledged the principle established in the case of Automatic Fire Sprinklers. However he said that the direction made to the applicant and others to stand and wait on 5 May was not made by the employer and further the notion of service as distinct from work does not have application to payments for overtime as opposed to ordinary time. Mr Jauncey submitted that the terms of sub-clause 15.1 of the Agreement should not be interpreted to have application to require payment of overtime for the time that the applicant was directed to remain at the SRDC after ordinary finish time on 5 May 2011.
[27] In addition, Mr Jauncey submitted that Woolworths was entitled to invoke the stand down provisions of the Act. According to Mr Jauncey, Woolworths could not be reasonably held responsible for the circumstances that caused the hazardous material incident of 5 May. However Mr Jauncey stressed that Woolworths did not invoke the stand down provisions of the Act but instead paid ordinary time rates for the time which would have otherwise resulted in no payment at all. Mr Jauncey submitted that it would be entirely incongruous to go from a position where quite legitimately the employer could pay nothing to a point of being required to pay overtime rates.
[28] Mr Jauncey made detailed submissions to support the proposition that Woolworths was entitled to invoke the stand down provisions of the Act in respect to the hazardous material incident of 5 May. He said that there was no evidence whatsoever to suggest that the breakdown of the nature which caused the hazardous material incident on 5 May was the natural or probable consequence of anything done by Woolworths.
[29] In conclusion, Mr Jauncey urged that the interpretation of sub-clause 15.1 of the Agreement as asserted on behalf of the applicant should be firmly rejected as it would be contrary to the proper application of the notion of payment for overtime worked. Further, Mr Jauncey submitted that the corollary of any adoption of the interpretation of sub-clause 15.1 as urged on behalf of the applicant, would mean that Woolworths would be at liberty to invoke the stand down provisions of the Act and this would be an undesirable outcome particularly for employees who would have no entitlement to any payment instead of the agreed ordinary time payment. Mr Jauncey urged that FWA make no Orders and simply dismiss the claim.
Consideration
[30] The dispute in this matter has involved a contest about the meaning that should be given to particular words which appear in an industrial agreement. The approach to interpretation of industrial instruments is not a matter of strict statutory interpretation. Although the words in an industrial instrument may be given their plain literal meaning, it is well established that often it is appropriate to adopt a contextual and purposive approach broadly based upon authority established by a body of decision-making which is well summarised in a Decision of a Full Bench of FWA in,Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Silcar Pty Ltd [2011] FWAFB 2555.
[31] The interpretation of the terms of sub-clause 15.1 of the Agreement as asserted on behalf of the applicant manifests an obvious difficulty. It would be unusual for an industrial instrument to provide for overtime payments to a person not actually performing some productive function which was beneficial to the employer’s interest.
[32] The terminology of overtime clauses in many Awards and Agreements often includes specific mention that any entitlement to overtime rates will only arise when the overtime is performed at the direction of the employer or authorised in advance by the employer. It seems fundamental and logical that the significant financial impost of overtime rates would not become payable without conscious decision of the employer. The attraction of time and a half or double time could not be “self-executed” by an employee who decided to continue working even if providing productive beneficial return to their employer. It would seem that, as a general proposition, to qualify for payment of the additional rates attached to overtime the employer must deliberately direct and sanction the work or service performed.
[33] Consequently the entitlement to payment of overtime may usually attach to the performance of actual work rather than service. Therefore terms in an Award or Agreement which prescribe payments for overtime will ordinarily, unless a contrary intention is expressed, be implied to require the performance of work as opposed to service, and that work would be at the direction of the employer. This general notion which underpins overtime provisions in Awards and Agreements is the underlying basis for the creation of a variety of other terms which fix payments at rates less than overtime rates, for service such as stand by allowance, travelling time, on call allowance, et cetera.
[34] Consequently the words contained in sub-clause 15.1 of the Agreement need to be considered having cognisance of the underlying basis upon which overtime provisions are established. Further, the particular circumstances where overtime payment is claimed as an entitlement need to be carefully examined. For instance, if an employer requested an employee to commence earlier than scheduled start time with the full knowledge that overtime rates would apply to the earlier start period, but then because of some unpredicted difficulty not caused by the employee, the employee was unable to perform actual work but merely presented for service, an entitlement to the overtime payment would probably exist even though no actual work was performed.
[35] The reason for any non-performance of work is an important factor in any determination as to whether an entitlement to payment exists. It appears that most authoritative case law in this area has involved circumstances where the action of the employee has been the catalyst for the non-performance of either work or service or of the full range of work or service comprehended by the contract of employment. Further, claim for payment has generally been confined to ordinary time as opposed to overtime.
[36] The learned authors of Macken’s Law of Employment 3have devoted considerable discussion to what is referred to as “the wages-work bargain” and the following two extracts from the text are particularly helpful to consideration of the circumstances in this case:
“In the past, in an exceptional case an award might have been construed so as to give an absolute right to wages independently of service. But where an award referred to “times worked”, “overtime worked” this implicitly required that wages are earned by service. Similarly where an industrial agreement made provision for additional payments for overtime, shift penalties and work on public holidays, it assumes that it is work that earns the wage.” 4
“The service will normally be work, but need not be confined to that and can include, for example, a readiness and willingness to work as for example, where a worker is on call after hours. Whether readiness and willingness to work is sufficient to earn the wage will depend on the terms, express or implied, in any particular contract of employment.” 5
[37] The interpretation of the terms of the Agreement provisions is also assisted by reference to the Judgment of the Full Court of the Federal Court in Coal & Allied Mining Services Pty Ltd v MacPherson 6. In particular the following extract from paragraph 53 of that Judgment is instructive:
“The Agreement does not evince an intention to provide for payment of wages or salary irrespective of the performance of work.”
[38] Translating this approach into the circumstances of this case generates the question; does sub-clause 15.1 display any intention to provide overtime payments irrespective of whether actual work is performed?
[39] To answer this question in the affirmative would require a very broad interpretation to be applied to the words “...where Overtime is worked...” and “...all overtime worked.” A broad interpretation of this nature would operate to the extent that there would seem to be no qualification for the employer to sanction the working of overtime such that any employee may be able to “self-execute” double time overtime payment by starting before or continuing at the SRDC after the scheduled finish time of a 10 hour shift. There is no basis to suggest that those who drafted the overtime provisions contemplated that overtime was unfettered by the use of the words “worked”. The use of the words “worked” in the last two sentences of sub-clause 15.1 operates to restrict the circumstances when an entitlement to overtime exists.
[40] The obvious restriction that is applied to any entitlement to overtime by the use of the words “worked” is that involving the sanction of the employer. Work or service performed before or after a 10 hour shift would not attract an entitlement to overtime rates without the employer specifically authorising and directing the work or service.
[41] In the circumstances of the hazardous material incident of May 5 there was no direction by Woolworths made to the applicant and others to remain at the SRDC after the ordinary finish time of the 10 hour shift, 3:30 pm. Although the direction to remain in the SRDC may have been conveyed to the applicant and other employees by management personnel of Woolworths that direction was made by the Fire Brigades officer in charge of the hazardous material incident. Consequently the overtime that was claimed by the applicant and other members of the TWU did not satisfy the implied terms of sub-section 15.1 of the Agreement in that it was not service performed at the direction of Woolworths.
Conclusion
[42] The determination of this dispute has involved the interpretation of particular words in sub-clause 15.1 of the Agreement. The words contained in sub-clause 15.1 should not be interpreted superficially or too broadly. The words contained in sub-clause 15.1 must be interpreted having regard for the logical implications which underpin payment of overtime rates.
[43] My consideration leads me to conclude that the sub-clause does not evince an intention to provide for overtime payments irrespective of whether work is actually performed. Further, by logical extension, the words “worked” are used in the last two sentences of sub-clause 15.1 so as to restrict the circumstances when an entitlement to overtime exists. An entitlement to overtime payments is subject to the qualification that the work or service which is undertaken is at the direction of and sanctioned by Woolworths.
[44] The requirement for the applicant and others to remain at the SRDC after usual finish time on 5 May 2011 was not a direction made by Woolworths. Therefore no entitlement to overtime exists in respect of the period of time after 3:30 pm when the applicant and others were directed by the Fire Brigade officer in charge of the hazardous material incident to remain at the SRDC.
[45] It is relevant to record some disappointment that a claim would be agitated for payment of overtime when payment of ordinary time was made in respect of a period when no work was actually performed. One might have thought that a reasonable person would be a little reluctant to ask for double time for doing nothing when ordinary time payment had been made. In fairness, I apprehend that the applicant may not have fully understood the entire circumstances surrounding the matter that was agitated on his behalf by the TWU.
[46] The ongoing disputation between the TWU and the NUWN involving contested coverage and competing membership at the SRDC and elsewhere is a matter of public record. In circumstances where Unions compete for members it is readily understandable that organisations will attempt to outbid one another. However the pursuit of a claim such as in this instance would have great potential to become counterproductive. The matter might have characterised the TWU members as little more than greedy opportunists who disturbed a reasonable, sensible arrangement and led to the loss of ordinary time payment when stand downs without pay were invoked on the next occasion of a fire alarm evacuation.
[47] In view of the conclusions that I have reached the application made on behalf of the applicant and other members of the TWU is dismissed and the proceedings concluded accordingly.
COMMISSIONER
Appearances:
Mr G. Sivaraman, solicitor on behalf of the applicant.
Mr S. Jauncey, solicitor on behalf of the respondent.
Hearing details:
2012.
Sydney:
April, 5.
1 Automatic Fire Sprinklers Pty Ltd v Watson, (1946) High Court of Australia, 72 CLR 435.
2 Kucks v CSR Limited [1996] IRCA 166 (19 April 1996), 66IR182.
3 Macken’s Law of Employment, Sappideen, O’Grady, Riley, Warburton, and Smith, seventh edition, Lawbook Co. 2011.
4 Ibid @ page 153.
5 Ibid @ page 155.
6 Coal & Allied Mining Services Pty Ltd v MacPherson [2010] FCAFC 83 (12 July 2010).
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