National Union of Workers v Parmalat Australia Limited

[2013] FWC 3284

[2013] FWC 3284

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

National Union of Workers
v
Parmalat Australia Limited
(C2012/5422)

COMMISSIONER GREGORY MELBOURNE, 18 JULY 2013

Alleged dispute concerning meal breaks.

Introduction

[1] This matter concerns an application by the National Union of Workers (the Applicant) to deal with a dispute in accordance with section 739 of the Fair Work Act 2009 (the Act). The Respondent is Parmalat Australia Limited. The parties are covered by the Parmalat Australia Ltd – Bendigo – NUW/TWU/AMWU/ETU Enterprise Agreement 2011 – 14 (the Agreement). The dispute concerns payment for meal breaks taken during continuous 12 hour shift rosters. The matter was dealt with in conference before the Tribunal on 8 November 2012 but was unable to be resolved. Neither party objected to the Commission’s jurisdiction to now deal with the dispute pursuant to sections 738 and 739 of the Act and clause 24 of the Agreement, which enable disputes that are unable to be resolved in the workplace “to be referred for final determination by a member of FWC.” The parties also agreed the matter could be determined “on the papers” and directions were issued for filing and service of written submissions. Mr A. Aspromourgos of Livingstones Australia was previously granted leave to appear in the proceedings pursuant to section 586(2)(a) on the basis the matter involved a degree of complexity and his involvement would enable it to be dealt with more effectively.

The Issue to be Determined

[2] The dispute arises out of the trial of a 12 hour continuous shift roster involving production employees at the Respondent’s Bendigo plant. The Applicant seeks provision of additional paid meal breaks during these 12 hour continuous shifts based on the application of the principles it submits are to be applied when parties are in dispute about the intended meaning of the provisions in an agreement. The Respondent opposes the application and maintains the provisions in the Agreement, and the relevant principles that apply, cannot support the outcome proposed. The issue to be determined is, accordingly, whether the Agreement should be interpreted as requiring additional paid meal breaks for employees working 12 hour continuous shift rosters.

The Evidence and Submissions

[3] The Applicant submits that limited 12 hour shift arrangements were introduced in 2011 and subsequently extended to the majority of production employees in 2012. However, the Agreement, in its submission, only provides limited and incomplete guidance about how such shift arrangements should operate. For example, in regard to meal breaks the Agreement provides for 20 minute paid rest breaks and an unpaid meal break. The Respondent applies these provisions by providing 2 x 10 minute paid rest breaks and 2 x 30 minutes unpaid meal breaks, meaning that employees are on site for a total of 12 hours during a 12 hour rostered shift, but are paid for only 11 of those 12 hours.

[4] Clause 6.6 of the Agreement provides for unpaid meal breaks and paid crib breaks when employees are directed to remain in their area during lunch breaks. The Applicant submits this clause was only ever intended to be applied in the context of 8 hour non – continuous shift arrangements. It submits that as the majority of production employees are now working 12 hour shifts as continuous shift workers they should be entitled to additional paid breaks.

[5] It also submits that because the matter of paid meal breaks in relation to continuous 12 hour shift operation is not dealt with expressly in the Agreement reference should be had to the underlying Modern Award, being the Food, Beverage and Tobacco Manufacturing Award 2010. It refers specifically to clause 3.4 of the Agreement in support of this submission. It states:

“Notwithstanding the provisions of any Award, legislation and in lieu of those provisions, the terms of this agreement shall apply, subject to the following:

In the event that an oversight by the parties to this agreement, has resulted in a gap or omission in the agreement the parties will discuss the matter and, unless agreed otherwise, the gap or omission will be remedied by applying the relevant Award or legislative provisions.”

[6] It continues to note that sub clause 30.3(b) of the Award states, in part, “Continuous shift workers are entitled to a 20 minute meal break on each shift, which must be counted as time worked.” It submits on this basis “at the very least, a 12 hour shift should have a 30 minute paid meal break and (as the Agreement provides for two 10 minute breaks) two 15 minute paid rest breaks, equating to 60 minutes of paid breaks – this would involve the additional payment of one 30 minute meal break and mean that workers would be paid for 11 and a half hours of their 12 hour shift." 1

[7] It also refers to clause 6.10 in the Agreement and the reference in the clause to 12 hour shifts. Clause 6.10 states:

“An employee shall not be rostered more than 10 hours per day without the agreement of a majority of employees in the section concerned or agreement of the employee.

By agreement between the employer and the majority of employees in the plant or work section or sections concerned, or agreement of the employee, ordinary hours exceeding ten, but not exceeding twelve, on any day may be worked subject to: –

(i) the employer and the employee concerned being guided by the occupational health and safety provisions of the ACTU Code of Conduct on 12 Hour Shifts.

(ii) proper health monitoring procedures being introduced;

(iii) suitable roster arrangements being made;

(iv) agreement by the Safety Committee; and

(v) proper supervision been provided.”

It notes that sub clause (iii) in clause 6.10 provides 12 hour shifts can only be implemented if “suitable roster arrangements” have been made and, in its submission, the provision of paid breaks is an important component of any such arrangement. It also notes the ACTU Code of Conduct provides for rosters that “must be developed in consultation with employees through their unions,” and unions should seek to negotiate “an additional paid break per shift (the duration of this break will depend on the nature of the work).”

[8] The Applicant also submits that the provision of paid breaks for continuous shift workers are “common in the dairy industry” and some agreements provide for paid breaks of 60 minutes or more. It also submits the requirement for the Commission to deal with matters on the basis of “equity, good conscience and the merits of the matter” supports the outcome it seeks.

[9] The actual order sought by the Applicant is in the following terms:

“That 11 and a half hours of a 12 hour shift be paid (i.e. that there be a total of 60 minutes of paid breaks per shift, being one 30 minute paid meal break and two 15 minute paid rest breaks, in addition to a 30 minute unpaid meal break)” 2

[10] The Respondent opposes the application and submits the provisions in the Agreement do not entitle employees to paid meal breaks in excess of 20 minutes per rostered shift. It notes that meetings concerning the introduction of a 12 hour continuous shift work trial commenced in 2011 and continued into the following year. Following discussions between the parties in June 2012 an explanatory document setting out the proposed arrangements was distributed to all employees. It stated in part:

“Paid Meal Breaks

Paid meal breaks are not currently included in the 12 hour rosters on site. It is not a requirement for employees to work through lunch breaks therefore they do not attract paid meal breaks.

Current break are 2 x 30 minute meal break and 1 x 20 min rest break.” 3

It concluded by indicating:

“Trial & Vote

The employees have completed two 8 week cycles of the 12 hour roster with the second being at the employee’s request.

The vote can now occur at any stage by request of the employees.”

[11] The Respondent also made reference to other provisions in the Agreement. It, firstly, pointed to clause 3 and, in particular, the provisions in sub clause 3.4, which have already been referred to in the context of the Applicant’s submissions. It next referred to the provisions contained in clause 6 “Ordinary Hours of Work” and highlighted, in particular, the following extracts from that clause:

“6.1. The ordinary hours of work shall be the hours rostered over a 2 to 10 week work cycle relevant to each area between Monday to Sunday inclusive and shall include:

● for full-time employees – an average of 38 ordinary hours per week over the rostered work cycle; and
● for part time employees – the rostered ordinary working hours.

6.2 The rostered ordinary hours for full-time employees (excluding banked days off) shall be within the following limits:

● in any roster weekly ordinary hours shall be spread over not less than 3 and not more than 6 days; and
● on any day the ordinary hours shall be not less than 6 and not more than 12 hours.

6.3 Ordinary hours of work shall be included in a general roster which:

...........

An employee who is called in to work outside the rostered ordinary hours set out above shall be paid overtime rates in accordance with clause 9 of this Agreement.

...........

6.6 Employees shall be allowed an unpaid meal break of a duration and at a time or times agreed between the company and employees in respect of the whole or a section of the operations as being suitable for the work being undertaken, provided that:

subject always to continued compliance with health and safety regulations, a security or factory employee who is required to work in the work area and is directed to remain at the workstation to attend to urgent work requirements, shall have the meal and rest breaks in the work area as time permits and such time shall be included in paid work time.

6.7 Employees shall be allowed paid rest time of 20 minutes per day (or 10 minutes where five or less hours are worked) and at a time agreed between the company and employees in respect of the whole or a section of the operations as being suitable for the work being undertaken.

6.8. The work of each day shall be continuous, provided that any rest break and any paid meal break covered by sub clause 6.6 and 6.7 shall be calculated as time worked and paid for at the prevailing rate.

6.9 When an employee works overtime on a non–working day, meal breaks will be the same as per that employees arrangements on his/her normal rostered day.”

[12] The Respondent also pointed to clause 31, “No Extra Claims” which states:

“31.1 For the period of this Agreement claims shall not be made or pursued for changes of rates of pay, allowances or conditions for employees covered by this Agreement, except where this has the agreement of the parties or is designed to improve drafting or overcome technical or administrative deficiencies in the Agreement.”

[13] In its submission the starting point for considering the entitlement to paid breaks is clause 6 of the Agreement. The Respondent submits the clause is unambiguous and should be given its plain and ordinary meaning. It submits sub clauses 6.1 to 6.11 provide a detailed framework for the implementation of a variety of rosters, including continuous 12 hour shifts. There is accordingly no requirement to look to the Modern Award because there is “no gap or omission” in the provisions in the Agreement. In its submission the relevant requirements are instead dealt with in a comprehensive way and the Commission is therefore precluded from reverting to the Modern Award to determine the entitlement of 12 hour continuous shift workers to paid meal breaks. In its submission clause 6.6 provides that employees are entitled to unpaid meal breaks of a duration and at times agreed between the Respondent and its employees. Clause 6.7 provides for paid rest time of 20 minutes per day at a time agreed between the employer and employees as being suitable for the work being undertaken, and these entitlements were set out prior to the implementation of the 12 hour shift work trials. It submits, it cannot be contended now that there is a “complete gap” regarding these entitlements in the Agreement.

[14] It submits in the alternative if the Commission believes it is appropriate to have recourse to the provisions in the Modern Award then those provisions in clause 30.3(b) do little to assist the Applicant as they replicate what is contained in the Agreement, namely an entitlement for employees to receive a 20 minute paid meal break for each shift. It refutes any suggestion that reference to the Modern Award can support a submission that the 20 minute paid rest breaks provided for in the Award can be extrapolated to support the provision of 30 minute paid rest pauses in the case of employees working 12 hour continuous shift rosters.

[15] The Respondent also rejects the contention that clause 6.10 of the Agreement obliges it to provide additional paid meal breaks to 12 hour shift workers. It submits an agreement was reached between it and the majority of employees for the 12 hour continuous shift roster that was implemented on a trial basis. In its submission sub clause 6.10 is not prescriptive in terms of what compliance with the ACTU Code of Conduct requires, and “suitable roster arrangements” had been arrived at through the processes of discussion and consultation referred to previously.

[16] The Respondent also rejects any suggestion the Commission should have regard to arrangements that exist at other dairy industry enterprises. In its submission the context of the current Agreement cannot be derived from the terms negotiated by other parties at another enterprise. In this context it referred particularly to the decision in Kucks 4 when it stated the Tribunal is “not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into” the Agreement. It also submits that the Agreement needs to be considered in its entirety and, in this context, it contains a package of terms and conditions of employment which exceed generally accepted industry standards.

[17] It also submits any additional entitlement associated with meal breaks would necessarily be an “extra claim” and therefore precluded by the provisions contained in clause 31.

[18] The Respondent also made submissions regarding the principles to apply to the interpretation of awards and industrial agreements. If the terms of an industrial instrument are clear and unambiguous then it must be interpreted in accordance with that clear and unambiguous meaning. 5 It must also be construed in context, having regard to the subject matter and the terms of the instrument as a whole.6

[19] It also submits the proper approach to interpreting enterprise agreements was summarised by French J in City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union [2006] FCA 813 at [53] in the following terms:

“The construction of an award, like that of a statute, begins with a consideration of the ordinary meaning of its words. As with the task of statutory construction regard must be paid to the context and purpose of the provision or expression being construed. Context may appear from the text of the instrument taken as a whole, its arrangement and the place in it of the provision under construction. It is not confined to the words of the relevant Act or instrument surrounding the expression to be construed. It may extend to “...the entire document of which it is a part or to other documents with which there is an association.” It may also include “...ideas that gave rise to an expression in a document from which it has been taken.”

It notes that decision has been cited with approval by a Full Bench of Fair Work Australia in Cape Australia Holdings Pty Ltd T/A Total Corrosion Control Pty Ltd v Construction Forestry Mining and Energy Union[2012] FWAFB 3994.

[20] Where there is ambiguity or the potential for more than one interpretation then consideration of the surrounding circumstances, based on “an objective framework of facts” can be undertaken. It referred to the judgement of Mason J in the decision of the High Court in Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 as expressing the widely accepted principle for resolving ambiguity of industrial instruments when his Honour stated:

“It is here that a difficulty arises with respect to the evidence of prior negotiations. Obviously the prior negotiations will tend to establish objective background facts which were known to both parties and the subject matter of the contract. To the extent to which they have this tendency they are admissible. But in so far as they consist of statements and actions of the parties which are reflective of their actual intentions and expectations they are not receivable. The point is that such statements and actions reveal the terms of the contract which the parties intended or hoped to make. They are superseded by, and merged in, the contract itself. The object of the parole evidence rule is to exclude them, the prior oral agreement of the parties being inadmissible in aid of construction, though admissible in an action for rectification.

Consequently when the issue is which of two or more possible meanings is to be given to a contractual provision we look, not to the actual intentions, aspirations or expectations of the parties before or at the time of the contract, except in so far as they are expressed in the contract, but to the objective framework of facts within which the contract came into existence, and to the parties presumed intention in this setting. We do not take into account the actual intentions of the parties and for the very good reason that an investigation of those matters would not only be time consuming but it would also be unrewarding as it would tend to give too much weight to these factors at the expense of the actual language of the written contract.”

[21] The respondent finally made reference to the often quoted judgement of Madgwick J in Kucks v CSR Limited (1996) 66 IR 182, where it was held:

“It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand.

But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award.”

Consideration

[22] There is little dispute between the parties about the principles which should guide the Commission in regard to the interpretation of an industrial instrument, such as an enterprise agreement or award. The authorities are well known and established. The decision of Madgwick J in Kucks v CSR Limited has been referred to often in this context and has been cited in the present matter. Whilst made in the context of the interpretation of an award the approach in that decision has been adopted in relation to the construction of industrial agreements. In City of Wanneroo v Holmes French J observed that in interpreting industrial instruments “fractured and illogical prose may be met by a generous and liberal approach to interpretation,” and the starting point should be a consideration of the natural and ordinary meaning of the words used.

[23] The decision of the High Court in Codelfa Constructions was also referred to by both parties. It established widely accepted principles for resolving ambiguity, and determined that evidence of surrounding circumstances is admissible to assist in interpretation if the language is ambiguous or susceptible of more than one meaning. The task in such cases is to look at the objective facts within which the Agreement came into existence, and the parties presumed intention in this setting. However, it is not admissible to contradict the language of an agreement when it has a plain meaning. I have considered and applied these principles in coming to this decision.

[24] The submissions in this matter point to a somewhat unusual conjunction of events. At the time that negotiations were taking place for the conclusion of a new enterprise agreement, being the current Agreement that covers the parties, the Respondent was at least contemplating or proposing to trial 12 hour continuous shift rosters at its production facility in Bendigo. However, for reasons which are not entirely clear this did not lead to those matters being dealt with in the EBA negotiations, or to the current Agreement containing any new provisions to do with 12 hour continuous shift rosters.

[25] The Respondent submits a series of negotiations regarding the introduction of the 12 hour continuous shift rosters occurred in 2011 and in March, April and June 2012 with employee and Union representatives and after the meeting in June a Question and Answer sheet 7 explaining how the rosters were intended to operate was distributed to employees. It dealt specifically with the issue of paid meal breaks and included an explanation about why “lunch breaks” would not be a paid break entitlement. It also indicated a “vote can now occur at any stage by request of the employees.” It is also noted that the Applicant submits this Q and A sheet was distributed after the dispute about the rosters had begun. It also submits no vote occurred about whether the 12 hour shift rosters should be implemented beyond a trial basis. Nevertheless, it does seem the Respondent made clear to its employees what its intentions were regarding paid breaks, although it is accepted the Applicant did not formally accept this aspect of the proposed new shift roster arrangements.

[26] The Applicant submits the hours of work provisions in clause 6 of the Agreement do not deal comprehensively with 12 hour continuous shift arrangements and, therefore, clause 3.4 enables the Commission to have regard to the underlying Modern Award to fill those gaps and omissions. I accept that the Agreement provisions dealing with 12 hour shift arrangements are not as comprehensive or detailed as found in many awards or agreements. As indicated, I am surprised they were not dealt with in more detail in the EBA negotiations leading to the conclusion of the current Agreement.

[27] However, the references in sub clauses 6.2 and 6.10 clearly contemplate that 12 hour shifts may be rostered. They indicate that on any day the ordinary hours rostered can be up to twelve. Where more than ten hours are to be rostered the agreement of the “majority of employees in the section concerned or agreement of the employee” is required before such rosters can proceed. The various matters in sub paragraphs (i) – (v) in sub clause 6.10 must also be taken into account as part of any agreement to work 12 hour shifts. In essence, the sub clause leaves much of the prescription about the operation of any 12 hour shift rosters to what is agreed between the employer and the employees involved. Sub clauses 6.6 and 6.7 also come into play in establishing the minimum requirements for paid and unpaid breaks in terms of any rosters are established under the clause.

[28] It is also noted that sub clause 3.5 of the Agreement states, “It is intended that the agreement be regarded as comprehensive so that Award provisions need not be referred to (except for FWA test case decisions referred to above, or where, due to an oversight on all sides, a complete gap has been left in the agreement)”. The clear intention is that the agreement deals comprehensively with the matters it encompasses, unless due to “oversight on all sides,” a “complete gap has been left”.

[29] I am satisfied, firstly, that the sub clauses in the Agreement I have referred to and considered have a plain and ordinary meaning and should be construed in that way. Given the various provisions in clause 6 that I have referred to I am also satisfied it can be concluded that the Agreement intends to deal comprehensively with the applicable arrangements for the introduction of 12 hour shifts, albeit that these arrangements are in part to be determined on the basis of agreement between the employer and the employees involved. The provisions concerning meal breaks, and whether these breaks are paid or unpaid, are also dealt with in the sub clause in 6.6 and 6.7.

[30] However, even if I have arrived at the wrong conclusion in coming to this view and sub clause 3.4 does apply because “an oversight by the parties to this agreement, has resulted in a gap or omission in the agreement” about payment of meal breaks during 12 hour shift rosters then I am not satisfied, in any case, that this assists the Applicant. Sub clause 30.3(b) of the Modern Award provides for a “20 minute meal breaks on each shift which must be counted as time worked.” This provides for the same paid break time as contained in the Agreement. However, the Applicant submits the Award has traditionally been concerned with 8 hour continuous shifts, (even though sub clause 30.5 “methods of arranging ordinary working hours” clearly envisages in sub clause (c) the introduction by agreement of 12 hour shifts). It therefore submits it is possible to extrapolate, based on the existing paid break entitlements for 8 hour shifts, that an additional paid break entitlement should be created for 12 hour shift rosters. I cannot accept this submission. Even if it is accepted that through a “gap or omission in the agreement” the Commission can fill that gap or omission by applying the relevant award provisions, I am not satisfied the power exists for this to occur by means of an outcome that does not actually apply an existing award provision, but instead creates one by “extrapolation” to fill the relevant gap or omission. As indicated, I am not satisfied it is possible for the provisions in the Agreement and the Award to interact in this way.

[31] The Applicant also submits the ACTU Code of Conduct enables the outcome it seeks. The Code of Conduct is long standing and often referred to. Reference is had to it in both the Agreement and the Modern Award as something that should guide the parties in regard to the relevant occupational health and safety provisions associated with extended shift operations. It does make reference to “breaks” in the following terms. Firstly, under the headings “Control measures” and “Shift rosters” it states

“– provide in addition to normal breaks, where practicable, and extended rest period during night shift. Breaks should occur at the same time each night.”

Secondly, under the heading “Award Variations” it states:

“in accordance with the merging overseas standards, union should negotiate, inter alia, an additional paid break per shift (the duration of this break will depend on the nature of the work)”

[32] The Respondent submits these references do not appear under the section of the Code dealing with “Health and related matters” and are therefore not “occupational health and safety provisions in the Code.” This submission is splitting hairs; the references to additional breaks are clearly one of the provisions suggested to minimise the health and safety risks of 12 hour shift rosters. The Respondent is, in any case, providing additional breaks as part of the 12 hour continuous shift operations, albeit not the additional paid breaks sought by the Applicant.

[33] Nevertheless, I am not satisfied that in the context of a dispute about the interpretation of an agreement pursuant to section 739, this enables the Commission to use the Code of Conduct as the basis of the order sought by the Applicant. As the decision in Kucks makes clear it is not the Commission’s task in this context to give effect to what might be considered to be fair and just, in the way that the exercise of an arbitral function about the creation of new entitlements might do. In addition, the Code only contains guidance material as opposed to prescriptive terms and conditions that must be inserted in conjunction with all extended shift roster arrangements. For these reasons I am again unable to conclude that the order sought by the Applicant can be justified on this basis.

[34] The Applicant also submits the Commission should have regard to the prevailing provisions in other agreements as justification to support the order it seeks. However, I am not satisfied there is anything or any principle that requires a matter in one industrial agreement to be expressed or replicated in the same way in another. Clearly, there will be a whole range of different circumstances and considerations in different workplaces that provide the basis for this approach.

[35] I have considered all of the submissions and evidence provided in this matter. For the reasons indicated I am not satisfied it is appropriate to make the order sought by the Applicant. The application is dismissed.

COMMISSIONER

 1   Submissions of the Applicant dated 15 February 2013 at [48]

 2   Ibid at [72]

 3   Annexure B to the Respondent’s Outline of Submissions dated 8 March 2013.

 4 Kucks v CSR limited [1996] IRCA 166

 5 Re Clothing Trades Award (1950) 68 CAR 596

 6 Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241

 7   Annexure B to the Respondent’s Outline of Submissions dated 8 March 2013.

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