National Union of Workers v Woolworths Limited

[2019] FWC 2851

[2019] FWC 2851

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

National Union of Workers
v
Woolworths Limited
(C2018/3758)

DEPUTY PRESIDENT COLMAN MELBOURNE, 10 MAY 2019

Interpretation of the public holiday clause in an enterprise agreement – night shift commencing on a public holiday and finishing the following day – no ‘holiday shift’ deeming provision – parties’ competing interpretations rejected – correct interpretation determined

[1] This decision concerns an application made by the National Union of Workers (NUW) under s 739 of the Fair Work Act 2009 (Act) for the Commission to deal with a dispute in accordance with the dispute settlement procedure in clause 3.2 of the Woolworths Limited Brisbane Liquor Distribution Centre Enterprise Agreement 2015 (Agreement). 1 The Agreement applies to employees of Woolworths Limited (Woolworths) at its Brisbane liquor distribution centre (BLDC).

[2] The dispute concerns the interpretation of the public holiday provision in clause 7.2 of the Agreement. The parties disagree about the entitlements of employees who are rostered to work a night shift that commences on the evening of a public holiday and concludes the following morning, where the majority of hours on the shift fall after midnight, on the non-public holiday. The example referred to in the parties’ submissions is a shift commencing at 9.00pm on a public holiday and concluding at 5.00am the following day (‘the disputed shift’).

[3] The NUW says that the correct interpretation of clause 7.2 is that the disputed shift is in effect a public holiday shift (the ‘start of shift’ interpretation), such that employees are entitled to be absent on this shift, and that all hours worked on the shift, including those falling on the non-public holiday, attract the holiday loading. Woolworths contends that clause 7.2 does not apply to night shift employees at all, and that it is free to adopt a reasonable approach to public holidays, consistent with the National Employment Standards (NES). Its approach is to treat a shift as a public holiday shift if the majority of hours on that shift fall on a public holiday (the ‘majority hours’ approach). The company says that the disputed shift is not such a shift, that employees rostered on the disputed shift are not entitled to be absent from it unless there are reasonable grounds under the NES, and that none of the hours actually worked on the disputed shift attract the public holiday loading.

[4] For the reasons that follow, I consider that neither party’s interpretation is correct. The Agreement makes no provision for a ‘public holiday shift’ and does not contain any other relevant deeming clause. Instead, clause 7.2 of the Agreement says simply that all employees (which clearly includes night shift employees) receive a ‘day off with pay’. This means a calendar day. Therefore, night shift employees are entitled to take the first three hours of the disputed shift off, with pay. The Agreement also states that any work on a public holiday is voluntary and that ‘employees’ (again, clearly including night shift employees) will be paid holiday rates for ‘all hours worked’ on a public holiday. Night shift employees who agree to work the first three hours of the disputed shift are therefore entitled to receive the public holiday loading for those hours, from 9.00pm to midnight on the public holiday.

The background and the clause in dispute

[5] The company employs approximately 230 employees at the BLDC. Some 13 employees are rostered to work a five day non-rotating night shift roster which, for each week of the roster cycle, starts on a Monday evening and ends on a Saturday morning. Employees who work these shifts are referred to as ‘night shift employees’. Each night shift starts at 9.00pm and ends at 5.00am the next day.

[6] On a public holiday, dayworkers receive the day off without loss of pay. If they perform work, they are paid at the public holiday rate prescribed by clause 7.2. There is no dispute about this. However the parties disagree about the application of clause 7.2 to night shift workers. The focus of this disagreement is the disputed shift referred to above however it is evident that the parties also disagree about how clause 7.2 applies when night shift commences on the day before the public holiday and concludes the following morning.

[7] Clause 7.2 of the Agreement provides as follows:

“7.2 Public holidays

7.2.1 All full time and part time employees will be entitled, subject to the remaining provisions of this clause, to a day off with pay, where the employee would be ordinarily rostered on a day which is a public holiday under the NES in the place of the Distribution Centre.

7.2.2 Casual employees who do not work a public holiday will not be entitled to any payment.

7.2.3 If a public holiday is substituted under the NES, then the substitute day is regarded as the public holiday. The substitute day is the only one that attracts the relevant penalty rates for working on public holidays. Full time and part time employees are only entitled to a day off with pay for the relevant public holiday if they are ordinarily rostered to work on the substitute day.

7.2.4 All work performed on public holidays will be voluntary.

7.2.5 When work is performed on a Public Holiday, the Company will seek volunteers firstly from:

a. Full time employees, then

b. Part time employees, then

c. Fixed term employees, then

d. Casual employees

7.2.6 In the event that the Company does not require employees to work on a public holiday for which they are rostered, the Company will provide seven (7) days’ notice to the employees not being required.

7.2.7 The minimum engagement on a public holiday will be four (4) hours.

7.2.8 Employees will be paid 250% of their base hourly rate for all hours worked on a public holiday or 150% of their base hourly rate for all ordinary rostered hours worked on the public holiday plus the ordinary rostered hours worked taken as time off in lieu, all hours worked above the ordinary rostered hours will be paid at 250% of their base hourly rate. Time off in lieu will be scheduled by mutual agreement and will be taken within sixty (60) days after working the public holiday. Where a full time or part time employee elects for the 150% option and does not work their ordinary rostered hours on a public holiday, all hours worked will be paid at 250% of their base hourly rate, no time off in lieu will be accrued.

7.2.9 Employees will only have the benefit of the public holiday once.

7.2.10 If a full time or part time employee ordinarily rostered to work on a public holiday is not required to work on that public holiday, they will be paid their daily rostered rate of pay for the number of hours they would ordinarily be rostered to work on the day. Where a full time or part time employee elects to work on a public holiday, but they do not work their ordinary rostered hours, all remaining hours not worked will be paid at 100% of their daily rostered rate of pay.”

[8] As will be apparent, clause 7.2 of the Agreement does not make any special provision for night shift employees in relation to public holiday entitlements. It does not deal with shifts, such as afternoon or evening shifts, which span two days and can fall on both a public holiday and a non-public holiday.

[9] The company has adopted a practice whereby it provides a public holiday entitlement to night shift employees when the majority of their shift falls on a day which is a public holiday under the NES. Thus, when a night shift begins at 9.00pm on a Monday evening which is a public holiday and ends at 5.00am on a Tuesday morning which is not a public holiday, the majority of hours fall on a non-public holiday and the company does not afford employees public holiday benefits in respect of this shift. Employees are not granted any time off with pay, nor does the company pay the public holiday loading in respect of any hours actually worked. However, if the Tuesday were a public holiday instead of the Monday, night shift employees commencing their shift on the Monday evening would receive a public holiday benefit in respect of that entire shift, because the majority of their rostered shift would fall on the holiday (i.e. midnight to 5.00am on the Tuesday). The night shift employees would receive the whole shift off without loss of pay, or, if they worked, they would be paid the public holiday loading for all hours worked on the entire shift, including the hours before midnight.

[10] The company says that, although no public holiday benefit is afforded in respect of the three hours actually falling on the holiday in the first scenario above, employees receive a benefit for the first three hours of the shift in the second scenario, which is not a public holiday, and that its ‘majority hours’ approach involves ‘swings and roundabouts’, resulting in a fair outcome overall. However, as I explain below, the union contends that the company’s practice involves, as it were, more swing than roundabout, as it results in night shift employees receiving the benefit of fewer holidays than their day worker colleagues.

[11] In April 2018, the Shop, Distributive and Allied Employees Association (SDA), which has intervened in the present proceedings, questioned the company’s interpretation of how clause 7.2 applies to night shift employees. From May to July 2018 the NUW made its own approaches to the company, also questioning the company’s interpretation.

[12] The application filed by the NUW under s 739 on 9 July 2018 focused on the fact that night shift employees on the disputed shift were not receiving any public holiday benefit at all for that shift, even in respect of the hours that fall on the public holiday, between 9.00pm and midnight. Subsequently the union developed its ‘start of shift’ interpretation which contends that the entire disputed shift should be considered a holiday shift.

[13] The matter was listed for conciliation but remained unresolved, and the parties agreed that the application should proceed to arbitration. Directions were issued for the filing and service of submissions and any evidentiary material, as well as an agreed statement of facts. The matter was then listed for hearing before me on Thursday 2 May 2019. The NUW presented oral submissions, as did the SDA and the company. Brief witness statements were tendered but no oral evidence was led.

[14] It was common ground, and I agree, that the Commission is authorised by the dispute settlement provision in clause 3.2 of the Agreement to deal with the dispute by arbitration, and that the dispute can be resolved by my determining the questions that the parties have submitted for arbitration. Those questions are as follows:

‘Are night shift employees entitled to a public holiday benefit under the Agreement where the employee is rostered to commence a shift on a public holiday, but the majority of the rostered shift is on a day that is not a public holiday?

If so, are they entitled to payment at public holiday rates in accordance with clause 7.2.8 of the Agreement for the full shift or only the part of the shift that falls on the public holiday, where they work their rostered shift?

Are they entitled to be absent from work for any of the rostered shift?’

[15] The NUW contends that the answers to these three questions are ‘yes’, ‘for the full shift’, and ‘yes, for the full shift’. The company contends that the answers to the questions are: ‘no’, ‘not necessary to decide’, and ‘no, unless there is a reasonable basis under the NES to refuse to work’.

Submissions of the union

[16] The NUW contends that on a proper reading of clause 7.2, night shift employees who work on a shift that spans a public holiday and a non-public holiday are entitled to receive the benefit of a public holiday on a ‘start of shift’ basis. If the night shift starts on the public holiday, the entire shift is a public holiday shift. It says the benefit employees should receive is twofold, namely the right to be absent from work without loss of pay on the public holiday shift, and, should the employee agree to work the public holiday shift, payment at public holiday rates for all hours worked on that shift, regardless of whether the hours fall on the public holiday.

[17] Much of the union’s argument was directed at refuting the validity of the company’s ‘majority hours’ approach and the interpretation that underpins it, which has the consequence that night shift employees rostered to work the disputed shift currently receive no public holiday benefit in respect of this shift. In particular, the union rejects the company’s contention, discussed below, that night shift employees are not covered by clause 7.2 at all. The union says that the clause clearly states that ‘all full time and part time employees will be entitled, subject to the remaining provisions of the clause, to a day off with pay, where the employee would be ordinarily rostered on a day which is a public holiday’. The union submits that the clause makes clear that all employees, including night shift employees, are entitled to be absent on a public holiday or receive penalty rates under the Agreement if they work on a public holiday. I agree with the union’s submissions in this regard.

[18] However that does not mean that the union’s broader ‘start of shift’ interpretation is correct. The union’s contention that night shift employees are entitled to public holiday benefits in respect of the entire disputed shift (as opposed to the portion of the shift that falls on the public holiday) proceeds on the basis that the Agreement recognises the concept of a public holiday shift. However, no textual basis has been advanced for this proposition. At the hearing, I asked the NUW if it could identify any text in clause 7.2 or any other provision that supported its ‘start of shift interpretation’ however it was not able to do so.

[19] There are simply no words in clause 7.2 or any other provision of the Agreement that suggest that, for a night shift employee, a ‘day off with pay’ means a ‘shift off with pay’. Further, there is nothing in the clause that would indicate which shift that should be (i.e. the one starting or ending on a public holiday). Nor does the provision suggest that night shift employees should receive payment of the public holiday loading in respect of hours which do not fall on a public holiday. Rather, clause 7.2.8 says the loading is paid for ‘all hours worked on a public holiday’.

[20] The union explained what it considered to be the merit of its ‘start of shift’ interpretation. Having regard to the days which have been gazetted as public holidays in Queensland for 2019 and the particular days of the week on which they fall, and recalling that the roster cycle for night shift employees runs from Monday evening to Saturday morning, the company’s ‘majority hours’ approach results in night shift employees receiving public holiday entitlements in respect of only seven holidays. However, under the union’s start of shift interpretation, the night shift employees would receive eleven of these holidays, which is what most day workers receive. The NUW says that its interpretation is the only model for ensuring that night shift employees are not treated less favourably than these other employees.

[21] I appreciate the force of this contention as an argument relating to merit, in the sense of what might be considered a fair and reasonable clause to include in an enterprise agreement. But it is of little assistance in interpreting the meaning of the clause that is presently in dispute, absent some textual basis to substantiate the union’s contention that this is what the clause actually means. The Commission’s role under clause 3.2 of the Agreement is not to adopt simply any approach that might be thought to produce a fair or efficacious outcome, regardless of the words of the agreement. This would be to re-write the text of the agreement that was voted on by employees. In an interpretative dispute such as the present, the Commission must determine the correct construction of the enterprise agreement, and give effect to it, having regard to the principles in AMWU v Berri Pty Ltd. 2

[22] The union contended that its ‘start of shift’ interpretation was supported by the decision of the Full Federal Court in Toyota Motor Corporation Australia Ltd v Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union, 3 which concerned the construction of the public holiday provision in the Toyota Australia Vehicle Industry Award 1998. That case has a superficial similarity to the present matter, in that it concerned a claim for public holiday entitlements in circumstances where employees worked a shift that spanned a public holiday and a non-public holiday. However, the Full Court was interpreting a different industrial instrument with particular deeming provisions that have no analogue in the Agreement. The decision does not lend any support to the union’s contention that a ‘start of shift’ interpretation should somehow be read into clause 7.2 of the Agreement, nor for that matter does it in any way support the company’s interpretation.

[23] For the above reasons, the union’s ‘start of shift’ interpretation is rejected.

Submissions of the company

[24] The company contends that its ‘majority hours’ approach is compatible with the Agreement because clause 7.2 does not apply to night shift employees at all. Therefore, it says, it can under the NES reasonably require night shift employees to work on a public holiday (that is, during the first three hours of the disputed shift), and pay employees who work on a public holiday whatever ‘remuneration model’ it thinks appropriate.

[25] The company points to the agreed statements of facts, which at paragraph 6 states that the Agreement ‘does not prescribe when Night Shift Employees are entitled to a public holiday entitlement under clause 7.2 of the Agreement’. The company appears to characterise this as a concession that the clause does not apply to night shift employees. But the union does not concede this. What the union agrees with is the obvious point that there is no provision in clause 7.2 that deals specifically with night shift employees.

[26] The company also says that clause 7.2.1 speaks of employees being rostered ‘on a day which is a public holiday’, emphasising in bold the indefinite article, and submits that the clause was not intended to apply when work is performed on ‘a day which is a public holiday’ and another day that is not a public holiday. I reject this contention. The clause is perfectly able to apply on its terms to night shift employees working on the disputed shift. That shift involves a situation where night shift employees are rostered ‘on a day that is a public holiday’. They are so rostered between 9.00pm and midnight on the public holiday.

[27] Next, the company puts forward certain ‘contextual’ arguments which it says support its position that clause 7.2 does not apply at all to night shift employees. These are presented as a suite of considerations that together favoured the company’s interpretation. First, the company points to clause 7.2.7 of the Agreement, which provides that the ‘minimum engagement on a public holiday will be four hours.’ The company says that a night shift in the form of the disputed shift took effect in November 2012, prior to the Agreement coming into operation. It says that if the company’s interpretation is not correct, the shift structure that existed at the time the Agreement was made was impliedly prohibited by clause 7.2.7, because a night shift employee would not work a minimum of four hours on the public holiday, there being only three hours falling on the public holiday. The company submits that the clause should not be interpreted in a way that would result in it having been in breach of the Agreement at the time it commenced operation. I reject this submission. I do not see how the employer’s contravention of an enterprise agreement should affect the proper interpretation of it. In any event, in my view the company could comply with the minimum engagement provision by paying employees for a minimum of four hours on the public holiday.

[28] Secondly, the company says that if clause 7.2 applied to night shift workers, and they received the public holiday penalty for the first three hours of their shift, there would be little incentive for them to work a public holiday. I am not convinced that three hours’ work at a loading of 250% provides little incentive to work. But even if this were accepted, it is hardly a compelling constructional point, particularly when the interpretation being advanced requires the reading-down of the word ‘employee’ in clause 7.2 to mean ‘any employee except one who works night shift’.

[29] Thirdly, the company says that clause 7.2.4, which states that ‘all work performed on public holidays will be voluntary’, cannot sensibly apply to shifts that span a public holiday and non-public holiday, as this would, in its view, create an ‘absurd operational outcome’ where the part of the shift that an employee would be required to complete (the hours falling on the non-public holiday) would only begin at midnight, when the public holiday ended. Instead, the company says it is ‘much more likely’ that the common objective intention in respect of public holiday work was for the NES to govern the public holiday entitlements of night shift employees, such that the company could reasonably require night shift employees to work public holidays or, if an employee wished to have the benefit of an absence over the hours that did not fall on the public holiday, to use their annual leave accruals to cover the balance of their shift.

[30] I reject this contention. In my view it is highly unlikely that it would have been intended that night shift employees would be left without any public holiday entitlements under the Agreement. And it is particularly unlikely that it would have been intended to exclude night shift employees from public holiday entitlements in clause 7.2 in such an oblique, or rather tacit, way. In my view it is much more likely that it was intended that, as the clause clearly says, all employees receive public holiday benefits. Further, I do not agree that the operational consequences referred to are absurd. I acknowledge that there may be certain operational or rostering difficulties that arise from clause 7.2 not containing a special provision to deal with night shift employees, but the provision remains perfectly workable. Any practical difficulties here are not a basis to read down the plain words of clause 7.2 to exclude night shift workers from its scope.

[31] I note that, if clause 7.2 really had been intended to exclude night shift workers, without the clause expressly saying so, this peculiar effect would in my view need to have been clearly explained by the company to employees during the access period for the agreement in the lead up to the vote, pursuant to s 180(5) of the Act. There was no evidence about whether this occurred.

[32] Fourthly, the company points to clause 6.3.3 of the Agreement, which provides that ‘where an employee’s rostered hours end more than four hours after the beginning of a period attracting a higher percentage loading than their first rostered hour, then all hours worked will be paid at the higher percentage loading’. The company says that under this clause, if an employee works a majority of hours at a rate that is higher than the rate at which they began working, then that higher rate is the applicable rate for the whole of their shift. It contends that it would be an odd result if the parties intended to adopt a completely different remuneration model for the working of hours that fall across a public holiday and a non- public holiday. However I do not find this an odd outcome, and do not consider that this clause supports the company’s interpretation of clause 7.2.

[33] I would add parenthetically that in my opinion, this part of clause 6.3.3, read in the context of clause 6.3 and the Agreement as a whole, is referring to the loaded rates for different hours of the day set out in the table under clause 6.3.4. It is not referring to other loadings found elsewhere in the Agreement, such as the public holiday loading in clause 7.2.8, and so would not apply when night shift employees commence a shift on the evening before a public holiday and work into the following morning (see also clause 6.3.2).

[34] Clause 7.2 states clearly that ‘all full time and part time employees will be entitled … to a day off with pay’, and that ‘employees’ will be paid a loading for all hours worked on a public holiday. ‘Full time employee’ and ‘part time employee’ are defined in clauses 6.1.2 and 6.1.3. The definitions contain no exclusions in relation to night shift employees. I reject the company’s contention that night shift workers are excluded from the scope of clause 7.2 and that its ‘majority hours’ practice is compatible with that clause.

The correct interpretation

[35] The principles that govern the interpretation of enterprise agreements are well-established and it is not necessary to repeat them. It will be evident from my analysis of the parties’ contentions that I consider the relevant provisions of the Agreement to be clear and unambiguous. They apply in the following way.

[36] Night shift employees who work the disputed shift are either full time or part time employees. Such employees are entitled, under clause 7.2.1, to a ‘day off with pay where the employee would be ordinarily rostered on a day which is a public holiday’. The word ‘day’ in the present context means calendar day, not some other period. There are no words that suggest ‘day’ means ‘shift’ or ‘24 hour period’. In the latter regard, there is no means of determining when such a period would start and end. It could be contended that, where an employee is rostered on a public holiday, the employee is entitled to a day off, rather than part of a day off, and that the day off can be a day other than the relevant public holiday. But on this view, the employee could still only take a calendar day off, not a shift spanning two calendar days. However, in my view, clause 7.2.1 contemplates that the day off to which employees are entitled is the calendar public holiday, or a substituted day in accordance with clause 7.2.3. This is consistent with the ordinary meaning of the entirety of the single sentence that forms clause 7.2.1, read in the context of the provision and the Agreement as a whole.

[37] A night shift employee rostered on the disputed shift is entitled to a day off with pay. That day off is the public holiday, which for this employee is the first three hours of the shift that commences at 9.00pm. I note in this regard that clause 7.2.4 is abundantly clear that ‘all work performed on public holidays will be voluntary’. What of the remaining five hours of the rostered shift between midnight and 5.00 am the following day, which is not a public holiday? The night shift employee is not entitled to take these five hours off. The company could require the employee to work. It might prefer to make other arrangements or configure rosters in a different way. Or an employee might seek to take five hours of annual leave to cover the remainder of the shift. The absence of a night shift public holiday deeming provision may produce certain operational or rostering inconveniences. But this does not make clause 7.2 unworkable.

[38] Night shift employees who work on the disputed shift are entitled under clause 7.2.8 to the 250% public holiday loading ‘for all hours worked on a public holiday’, or to receive a 150% loading and time in lieu. Accordingly, the first three hours of the disputed shift, namely the hours from 9.00pm to midnight on the public holiday, are to be paid at the public holiday rate. The remaining five hours are to be paid at the ‘ordinary’ or usual, non-public holiday rate for those hours (see the table in clause 6.3.4). There is nothing so unusual about this. The NES also recognises that employees may be entitled to payment for a part of a day that is a public holiday (see sections 115 and 116). I also note that the Storage Services and Wholesale Award, which is the underlying award that would otherwise apply to employees covered by the Agreement, does not contain a deeming provision, and instead states that ‘all work performed on any of the holidays prescribed or substituted must be paid for at double time and a half’. 4

[39] Deeming provisions for shifts that span a public holiday and a non-public holiday are commonly found in industrial instruments. They can be useful, but are not essential. The company explained that clause 2.4.10 of the Woolworths Limited Brisbane Liquor Distribution Centre Greenfields Agreement 2009 stated that ‘for the purposes of this Agreement a public holiday shift shall be recognised as the shift on which the majority of hours fall.’ There was no evidence about why that clause was omitted from the enterprise agreements that followed it. The nominal expiry date of the Agreement is 2 August 2019. The parties may wish to include such a provision in the next enterprise agreement.

Conclusion

[40] The answers to the questions that have been submitted by the parties for determination are as follows:

Question 1: Are night shift employees entitled to a public holiday benefit under the Agreement where the employee is rostered to commence a shift on a public holiday, but the majority of the rostered shift is on a day that is not a public holiday?

Answer: Yes

Question 2: If so, are employees entitled to payment at public holiday rates in accordance with clause 7.2.8 of the Agreement for the full shift or only the part of the shift that falls on the public holiday, where they work their rostered shift?

Answer: Employees are entitled to payment at public holiday rates for the part of the shift that falls on the public holiday.

Question 3: Are employees entitled to be absent from work for any of the rostered shift?

Answer: Yes, they are entitled to be absent on the hours that fall on the public holiday.

[41] The parties should confer as to the implications of this decision. Given the company’s practice of adopting a ‘majority hours’ approach to public holidays for night shift employees, it would appear that night shift employees have not received public holiday entitlements in accordance with the proper construction of clause 7.2 of the Agreement on some occasions, and at other times have received payments that the company was not required to make under the Agreement. I note that the company contended, and the union agreed during the hearing, that claims associated with this application under the disputes procedure in the Agreement are properly confined to the entitlements of employees that have arisen during the operation of the Agreement, which commenced on 23 February 2016.

[42] The Commission will assist the parties in the consideration of the implications of the decision if requested to do so.

DEPUTY PRESIDENT

Appearances:

P Zielinski for Woolworths Limited

H Miflin for the NUW

S Sciacca for the SDA

Hearing details:

2019

Melbourne

2 May

Printed by authority of the Commonwealth Government Printer

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 1   AE417852

 2   [2017] FWCFB 3005

 3 [1999] FCA 1471

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