Officeworks Limited v Shop, Distributive and Allied Employees Association
[2021] FWCFB 6063
•21 DECEMBER 2021
| [2021] FWCFB 6063 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604—Appeal of decision
Officeworks Limited
v
Shop, Distributive and Allied Employees Association
(C2021/6791)
VICE PRESIDENT HATCHER | SYDNEY, 21 DECEMBER 2021 |
Appeal against decision [2021] FWC 4572 of Commissioner Riordan at Sydney on 17 September 2021 in matter number C2021/1643.
Introduction
[1] The appellant, Officeworks Limited, by its notice of appeal lodged on 8 October 2021 applies for permission to appeal and, if granted, appeals a decision of Commissioner Riordan made on 17 September 2021.1 In his decision, the Commissioner determined a dispute about the proper construction and application of certain overtime provisions concerning full-time employees in the Officeworks Store Operations Agreement 2019 2 (Agreement) adversely to the interests of the appellant. The application the subject of the decision was brought by the Shop, Distributive and Allied Employees Association, the respondent to this appeal, pursuant to s 739 of the Fair Work Act 2009 (FW Act).
[2] In determining the dispute by arbitration, the Commissioner was asked to answer an agreed question: Does a full-time employee receive overtime rates of pay when they have been rostered for 20 days in a four week-cycle and they work on the 20th day, but have been absent from work on other days in the cycle? The Commissioner determined the answer was yes “if the leave has been authorised in accordance with section 62 of the Act”.3
[3] The dispute was determined against the backdrop of a statement of agreed facts. The statement sets out the essence of the dispute, the agreed question posed by the parties and the relevant contextual facts which gave rise to the dispute. These are that:
• Following the commencement of the Agreement on 4 November 2019, the appellant has, on occasion, rostered full-time employees for 20 shifts per four-week cycle.
• Where an employee has been rostered for 20 shifts but has been absent from work on one or more shifts during the four-week cycle, the appellant has not paid overtime on the 20th shift in the cycle, including where employees have been absent due to:
• public holidays;
• annual leave;
• personal leave;
• compassionate leave;
• approved unpaid leave of absence; and
• unpaid absence due to illness.
The decision
[4] The issue in dispute, as is evident from the agreed question, was whether under the Agreement a full-time employee who had been absent from work on one or more days during a four-week roster cycle was entitled to be paid overtime rates if the employee had been rostered to work 20 days and had worked on the 20th day as rostered in the cycle.
[5] The respondent contended that the answer to the question was “yes” and relied on two provisions of clause 27 of the Agreement – subclauses 27.1.2(d) and (e), which provide respectively that an employee will be entitled to payment of authorised overtime when the employee is required to work a non-rostered shift (except in the circumstances provided for in clause 25.9.1) (subclause 27.1.2(d)) or when a full-time employee works in excess of 19 days in any four-week cycle (subclause 27.1.2(e)).
[6] After setting out some background and agreed factual matters, the relevant Agreement provisions, a summary of enterprise agreement construction principles and a summary of the parties’ arguments, the Commissioner turned to consider the operation of the two subclauses on which the respondent relied.
[7] As to subclause 27.1.2(d) the Commissioner concluded:
“[69] In relation to the Applicant’s submission in relation to unrostered shifts, I do not accept that the 20th shift which appears on an employee’s roster is an ‘unrostered shift’. Such a submission is illogical. The rostered shift on the 20th day is a rostered overtime shift and attracts overtime in accordance with clause 27.1.2(e) of the OWEA.”4
[8] As to subclause 27.1.2(e) the Commissioner reasoned as follows:
• For employees who work a 19-day month, in relation to the National Employment Standards (NES) provision on Annual Leave (section 87(1) and (2)), they actually accrue 19 days of Annual Leave a year, not 20;5
• Section 62(4) of the FW Act provides that “the hours an employee works in a week are taken to include any hours of leave, or absence, whether paid or unpaid, that the employee takes in the week and that are authorised . . . ”;6
• Section 62(4) is on point with the effect that authorised leave is regarded as time worked for the purposes of determining whether an employee has worked their maximum hours of work;7
• Consequently, if an employee was rostered on day four of their cycle to work 9 hours but took a day of annual or personal leave instead, as long as that day was authorised, as defined, then those 9 hours count as hours worked for the purposes of calculating an employee’s hours at work during a roster cycle. In all likelihood, the employee would have accrued their 152 hours for the roster before the 20th shift. The 20th shift, therefore, would be paid at overtime rates;8
• There is no capacity under the Agreement for an employee to receive more than four weeks of annual leave unless they satisfy the requirements of s 87(1)(b) of the FW Act in relation to shiftworkers. As a result, an employee who takes a day of annual leave and is then required to work on a 20th day during a roster period is disadvantaged compared to an employee who does not take annual leave. It would appear that the employee who took the leave accrues the same amount of annual leave for this 4-week period as the employee who worked their 19-day roster (see s 62(4)). This scenario would be in breach of the NES and contrary to the obiter in Mondelez Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union; Minister for Jobs and Industrial Relations v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union;9
• It would be unfair and illogical to suggest that an employee, who accesses paid leave for a shift or a number of shifts within a 19-day four-week cycle, would be recognised as having worked on these days for the purpose of every provision in the Act and the Agreement except for clauses 25 and 27 of the Agreement, and such an outcome would give rise to an absurd result and an inequitable outcome;10
• On the appellant’s construction an employee taking a single day of paid leave in a roster cycle but required to work on the 20th day, would be working in breach of the NES because the NES only allows for 152 hours in a four-week cycle to be paid at single time;11
• There is no difference at law between an employee who is physically at work or on paid leave for the purposes of receiving and accruing benefits to pay, leave, superannuation and rostered days off;12
• The Agreement contains a prohibition on rostering full-time employees for more than 19 shifts in a four-week cycle;13
• Consequently, if a full-time employee is required to work in excess of 19 shifts in a cycle, then they are to be paid overtime as per subclause 27.1.2(e);14 and
• Therefore, if the leave taken by a full-time employee during the four-week cycle is authorised in accordance with s 62 of the FW Act, the employee is entitled to be paid overtime for working on the 20th shift in that four-week roster cycle.15
Grounds of appeal and contentions
[9] The appellant’s notice of appeal contains two appeal grounds by which it contends the Commissioner erred in concluding:
• the relevant full-time employee “works in excess of 19 days in any 4 week cycle”, within the meaning of subclause 27.1.2(e) of the Agreement, and further or alternatively;
• that s 62(4) of the FW Act had the effect that the relevant full-time employee “works in excess of 19 days in any 4 week cycle”, within the meaning of subclause 27.1.2(e) of the Agreement.
[10] The substance of the complaint raised by the appeal is that the Commissioner reached the wrong conclusion about the proper construction of subclause 27.1.2(e) of the Agreement and wrongly answered the agreed question.
[11] In summary, the appellant contends that on a proper construction of the Agreement there is no entitlement to overtime for an employee who works a 20th shift in the circumstances posed by the question for the following reasons:
• neither subclause 27.1.2(d) or (e) of the Agreement, on their proper construction, applied to the factual scenario underpinning the agreed question;
• the Commissioner correctly concluded that subclause 27.1.2(d) of the Agreement did not apply but wrongly concluded that subclause 27.1.2(e) gave rise to an entitlement in the circumstances posed by the agreed question;
• subclause 27.1.2(e) of the Agreement requires the actual physical performance of work “in excess of 19 days”, in order to generate an entitlement to overtime;
• section 62(4) of the FW Act, on which the Commissioner relied to determine the proper construction of clause 27.1.2 of the Agreement, only applies for “the purposes of subsection 62(1)” and is of no utility since it is confined to dealing with whether the hours an employer has requested or required an employee to work in excess of 38 hours in a week are reasonable; and
• on the agreed facts none of the relevant employees actually worked in excess of 19 days in the roster cycle, in the sense of attending for or performing work.
[12] The respondent contends that the Commissioner correctly construed subclause 27.1.2(e) of the Agreement and correctly answered the agreed question. However, by an apparent notice of contention, the respondent also says that the Commissioner was wrong to conclude that an employee rostered for 20 days in a roster cycle was not entitled to overtime for the 20th shift because it was not a “non rostered shift” within the meaning of subclause 27.1.2(d).
[13] As to the latter, the respondent contends in summary:
• the 20th shift in the roster period worked by an employee is a “non rostered shift” within the meaning of subclause 27.1.2(d) of the Agreement and thus attracts an overtime payment;
• a “rostered shift” is properly to be understood as a shift for which an employee is rostered to work, in the sense that his or her name is recorded on the roster, in a manner that is consistent with the rostering principles in clause 25 of the Agreement; and
• the reference to clause 25.9.1 in subclause 27.1.2(d) demonstrates that a non-rostered shift is one that is not rostered in accordance with the rostering principles in clause 25. That clause does not permit rostering of an employee for more than 19 shifts in any 4-week roster cycle.
[14] As to subclause 27.1.2(e) of the Agreement, the respondent contends in summary:
• if a full-time employee is not entitled to overtime when rostered to work 20 shifts in a roster cycle by reason of subclause 27.1.2(d), the employee is entitled to overtime under subclause 27.1.2(e) because the full-time employee “works in excess of 19 days in any 4-week cycle”;
• the construction for which the appellant contends requires reading the word “works” in subclause 27.1.2(e) in a strictly literal manner as limited to the “actual physical performance of work” on all days the employee is rostered to work including those “in excess of 19 days” and fails to read the Agreement as a whole and in context, or consistently with its purposes;
• key contextual features of the Agreement include the interaction between provisions dealing with terms of employment in clause 17, hours of work in clause 23 and rostering principles in clause 25, on the one hand, and the overtime entitlements conferred by clause 27, on the other;
• the subparagraphs in clause 27.1.2 provide, in critical respects, for an entitlement to overtime for work outside of the periods during which an employee has been or could be rostered in accordance with clause 25, the employee’s total ordinary hours under clause 17 or the ordinary hours of work in clause 23 rather than the period in which the employee has necessarily “actually worked”;
• the interrelationship between clauses 17, 23, 25 and 27 make clear that an entitlement to overtime is intended to arise where an employee “works” in excess of the period the employee could have been rostered or in addition to his or her ordinary hours;
• these provisions assume that the employee has been rostered in accordance with clause 25, has been allocated ordinary hours in accordance with clauses 17 and 23 and provide an entitlement to overtime when the employee works beyond the period he or she has been “rostered to work” or in excess of his or her ordinary hours;
• there is no warrant for a strictly literal or pedantic reading because a contextual reading shows that the intention of subclause 27.1.2(e) is that an employee is entitled to overtime if he or she works on a day in excess of the 19 days the employee could have been rostered in the roster cycle and it is immaterial that the employee may not have “actually worked” on some of those rostered days because of leave or a public holiday occurring during the relevant period;
• the appellant’s construction is inconsistent with the rationale for overtime payments, which is ordinarily to compensate employees for working outside their usual pattern of hours and to act as a disincentive for employers to require excessive hours, and undermines the purpose of leave and public holidays; and
• although s 62(4) of the FW Act is not determinative of the construction of clause 27.1.2 of the Agreement, it nevertheless provides a relevant contextual consideration in construing the Agreement and provides contextual support for the construction for which the respondent contends.
Consideration
[15] It is uncontroversial that the decision under appeal was not a discretionary decision and so the task on appeal is to consider whether the Commissioner reached the correct conclusion in determining the proper construction of the Agreement which was necessary for him to answer the agreed question. Similarly, the principles applicable to the construction of the Agreement were not in dispute before the Commissioner, nor before us on appeal. We need not restate them.16
[16] Clause 3 of the Agreement, titled “Incidence and Parties Bound” contains, inter alia, a provision regulating the relationship between the Agreement and the NES as follows:
3.3 This Agreement will be read and interpreted in conjunction with the National Employment Standards (NES). Where there is an inconsistency between the Agreement and the NES, and the NES provides a greater benefit, the NES provision will apply to the extent of the inconsistency.
[17] Clause 17 of the Agreement titled “Terms of Employment” contains categories of employment, relevantly providing as follows:
17.1 Full – time Team Members
A full-time Team Member is a person employed by the week [subject to clause 25.2] to work 152 hours over a four-week cycle with a minimum daily engagement of 4 hours.
[18] Clause 25.2 referenced in the foregoing provision is part of the rostering principles for which the Agreement makes provision and relevantly limits the number of days on which a full-time employee will be rostered to work in any four-week roster cycle to 19 days. The effect of clauses 17.1 and 25.2 is that a full-time employee is engaged to work 152 ordinary hours over a four-week cycle which may be rostered on days in that cycle not exceeding 19 days, with no fewer than 4 hours’ work being rostered on any day.
[19] Although the specified number of hours (152) over a four-week cycle described in clause 17.1 are not expressly stated to be ordinary hours, they are plainly so. So much is clear from:
• subclause 27.1.2(b) which provides for an overtime entitlement if a full-time employee works in excess of 152 hours in any four-week cycle. Over the cycle this results in average weekly hours of work of 38;
• the expressions "Base Rate of Pay" and "Ordinary Time Rate of Pay" are defined in clause 9.1 to mean the weekly wage in clauses 11.3 and 12 for the relevant classification, divided by 38 where the reference is in relation to an hourly rate. The reference to 38 is clearly a reference to 38 ordinary hours of work; and
• clause 17.5.1 provides that casual employees will be employed for “less than the prescribed number of ordinary hours for a full-time Team Member”, those being the hours of work for a full-time employee prescribed in clause 17.1.
[20] Clause 23 of the Agreement deals with hours of work. Specifically, clause 23.2 deals with the span of hours during which ordinary hours may be worked and, pursuant to subclause 27.1.2(i), an employee becomes entitled to the appropriate overtime rates for hours worked outside the specified span of hours.
[21] Clause 25 sets out the applicable rostering principles for scheduling of ordinary hours of work, including the maximum daily number of ordinary hours an employee may be rostered to work (clause 25.1), which corresponds with clause 23.5 dealing with maximum rostered daily ordinary hours of work. Clause 25 also relevantly provides the following:
25.2.1 No full-time Team Member will be rostered to work more than 19 days in any 4 week roster cycle
[22] Clause 25.7 requires each roster to be displayed 14 days in advance of the period to which the roster applies. Clause 25.9 allows rosters to be changed with 7 days written notice, with 48 hours’ notice in emergencies for part-time employees or a shorter period of notice by consent. Clause 25.10 deals with changes to rosters to accommodate changes to the availability of an employee to work a current roster.
[23] The overtime provisions of the Agreement are set out in clause 27. Clause 27.1.1 provides that the appellant may require an employee to work reasonable overtime at appropriate overtime rates. Clause 27.1.2 sets out the various circumstances in which an employee is entitled to payment for authorised overtime. These include when:
(d) A Team Member is required to work a non rostered shift (except in the circumstances provided for in Clause 25.9.1, or for a part-time Team Member who has been offered and has accepted additional hours of work in accordance with Clause 17.2.7).
(e) A full-time Team Member works in excess of 19 days in any 4 week cycle.
[24] We turn first to the proper construction and effect of subclause 27.1.2(e). The appellant’s construction depends for its efficacy on reading the phrase “works in excess of 19 days in any 4 week cycle” as imposing a requirement to physically attend for and perform work on each of the 19 days in any four-week cycle and on the 20th day in the same cycle which is in excess of those days already worked. Hence, on the appellant’s case, when leave is taken by an employee (or the employee is otherwise authorised to be absent) on one of the 19 rostered days forming the four-week roster cycle, the employee only works 18 days. The 20th day in the cycle is, according to the appellant, only the 19th day the employee works and overtime payments are not triggered by subclause 27.1.2(e) because on that day the employee has not actually worked more than 19 days in the cycle.
[25] Read literally and in isolation, we accept that this is an available construction of the words in subclause 27.1.2(e). However, there are several textual and contextual reasons why the appellant’s construction is not correct and the respondent’s construction is to be preferred.
[26] First, there is the structure of the Agreement and the way in which the various provisions dealing with ordinary hours of work, rostering and overtime relate to one another.
[27] The Agreement is structured in a way that differentiates between ordinary hours of work and their permissible rostering on the one hand and working hours which attract overtime payments on the other. This is evident from the relationship between each overtime triggering event in clause 27.1.2 and the corresponding provisions dealing with ordinary hours of work and rostering in clauses 17, 23 and 25. As the respondent points outs:
• Subclauses 27.1.2(b) and (c) refer to “work” in excess of the maximum number of hours a Team Member is “employed … to work” over a four-week cycle for which provision is made in clauses 17.1 and 17.2.1;
• Subclause 27.1.2(d), refers to a Team Member being required to work a non rostered shift, the scheduling of which has either not occurred pursuant to the roster change provisions in clause 25.9.1 or has not been accepted by a part-time employee as additional hours under clause 17.2.7;
• Subclauses 27.1.2(e) and (f) refer to a Team Member who “works” in excess of the number of days the employee may be “rostered to work” pursuant to clauses 25.2.1 and 25.2.2 respectively;
• Subclause 27.1.2(g) refers to a Team Member who “works” in excess of the maximum number of hours an employee may be “rostered to work” on any day in accordance with clauses 23.5 and 25.1;
• Subclause 27.1.2(h) refers to a Team Member who works in excess of the number of days an employee may be “rostered to work” in a week under clause 25.3.1;
• Subclause 27.1.2(i) refers to a Team Member who “works” outside the span of hours during which the ordinary hours of an employee (other than a shiftworker) can be worked pursuant to clause 23.2;
• Subclause 27.1.2(j) refers to a Team Member who “works” in excess of the maximum hours that an employee may be “rostered to work” in a week under clause 25.5;
• Subclause 27.1.2(k) refers to a Team Member who “works” in excess of the maximum number of consecutive days an employee may be “rostered” in any fortnight under clause 25.3.2; and
• Subclause 27.1.2(l) refers to a Team Member who does not have the requisite minimum number of consecutive “days off” as required by the rostering principle in clause 25.4.
[28] Further, subclause 27.1.2(a), which triggers an overtime payment entitlement when an employee is required to work before or after their rostered shift (or in the case of part-time employees, outside of their agreed hours where no additional hours have been agreed under clause 17.2.7), suggests that for the purposes of the Agreement, rostered shifts can comprise only ordinary hours of work.
[29] Taken together, these provisions establish a mechanism for the rostering of ordinary hours of work fixed by clauses 17 and 23 pursuant to the rostering principles in clause 25. Work performed or required to be performed outside of the rostering principles or outside of the limits on ordinary hours in clauses 17 and 23 triggers the payment of overtime under one of the circumstances listed in clause 27.1.2. The Agreement makes provision for the working of ordinary hours for which a base rate, or a weekend or shift work loaded base rate is payable and for the working of reasonable overtime hours for which an overtime rate is payable. Put another way, the Agreement manifests the intention, through the interrelationship between clauses 17, 23, 25 and 27, that an entitlement to overtime arises when an employee works outside, or in excess, of ordinary hours rostered in accordance with the rostering principles.
[30] Second, the overtime provisions which provide for certain triggering events do so consistently with the commonly understood purpose and rationale for overtime payments in industrial instruments – that is, for the performance of work outside of or in excess of limits on working ordinary hours prescribed in the instrument. Under the Agreement, the pattern in which ordinary hours may be worked is fixed by a combination of the maximum number of hours that employees in particular categories of employment may work (clause 17), the spread of hours within which these can be worked (clause 23.2) and the manner in which the hours can be rostered (clause 25). Clause 27.1.2 renders hours worked outside these parameters as hours attracting an overtime payment. The rostering provisions prohibit the rostering of a full-time employee to work more than 19 days in any four-week roster cycle. In any four-week cycle, an employee who has been rostered to work 19 days, and who works on a 20th day in the cycle becomes entitled to overtime for work on that day by reason of subclause 27.1.2(e). It does not matter that the employee was on leave or an authorised absence on one or more of the 19 rostered days in the same cycle because by working the 20th day in the cycle the employee has worked hours at a time when ordinary hours of work are not permitted by the Agreement.
[31] Third, the statutory context in which the Agreement was made is relevant and supports the construction we prefer. Section 62(1) of the FW Act relevantly provides that an employer must not request or require a full-time employee to work more than 38 hours in a week unless the additional hours are reasonable. Section 63 allows an enterprise agreement to provide for an averaging of hours over a specified period provided the average weekly hours over the period do not, for a full-time employee, exceed 38 hours or if greater than 38 hours per week on average, the excess hours are reasonable. Clause 17.1 is such an averaging provision. It results in a full-time employee working an average of 38 hours over a four-week cycle or period. Clause 27.1 confers a right on the appellant to require employees to work reasonable additional hours on the condition that overtime payments will apply to additional hours worked. Section 62(4) of the FW Act operates so that authorised paid or unpaid leave or absences are to be treated as part of an employee’s working hours for the purposes of assessing whether an employee has worked the maximum of 38 hours per week and where there is a request or requirement to work hours exceeding 38 hours per week, for the purpose of assessing whether the additional hours are reasonable. Thus s 62 sets prescribed maximum hours of work in a week for employees generally, s 63 allows an enterprise agreement to provide for the averaging of hours over a period, provided the weekly average does not exceed the maximum permissible hours and s 62(4) provides that the hours an employee works in a week are taken to include “any hours of leave, or absence” that are authorised for the purpose of determining the maximum weekly and additional reasonable hours under s 62(1).
[32] The background circumstances in which the Agreement was made include the statutory context provided by the NES provisions of the FW Act. Clause 3.3 of the Agreement imports this context into the Agreement by requiring the Agreement to be read and interpreted in conjunction with the NES, in addition to ensuring that the Agreement does not exclude the NES or any part of it. Thus, where clause 27.1 of the Agreement describes an overtime triggering event as when a full-time employee “works in excess of 152 hours in any 4 week cycle” or “in excess of 19 days in any 4 week cycle” this must be read together with the NES so that hours in the period that are taken as leave or other authorised absence are taken to have been worked. Understood in this way, a full-time employee who has taken a day of leave or has been on an authorised absence on a day in a four-week cycle will be taken to have worked on the absent day in the cycle and so work on the 20th day in the cycle will be work “in excess of 19 days in any 4 week cycle”, giving rise to an overtime entitlement under subclause 27.1.2(e).
[33] It follows that we reject the appellant’s contention that the words “works in excess of 19 days in any 4 week cycle” mean that a full-time employee must have actually worked on 19 days in a roster cycle for overtime payments to arise on the 20th day. The Commissioner reached the correct conclusion in relation to subclause 27.1.2(e) of the Agreement, albeit for different reasons.
[34] Given our conclusion it is unnecessary to determine the respondent’s alternative contention as to the proper construction and effect of subclause 27.1.2(d). However, we would make the following observations. There is some force to the respondent’s argument that employees rostered for 20 days in a roster cycle are entitled to overtime for the 20th shift under subclause 27.1.2(d) because the 20th shift in the roster period was a “non rostered shift”. This is because, although physically appearing in the roster prepared by the employer, a shift which is not rostered in accordance with the rostering principles in clause 25 cannot have been intended to be a rostered shift for the purpose of the Agreement. Although this construction may not apply to every circumstance where an employee is on leave during a four-week cycle (for example, leave approved in advance of a roster being posted), when applied to the agreed factual scenario, subclause 27.1.2(d) appears to us to be engaged.
[35] Because the consideration of this appeal has required a comprehensive analysis of the relevant provisions of the Agreement in the context of the arguments advanced by the appellant, we consider it appropriate to grant permission to appeal. We have concluded that the Commissioner’s answer to the question posed for determination was correct, albeit that our reasons for that conclusion differ somewhat from those of the Commissioner. Accordingly, the appeal must be dismissed.
Order
[36] We order that:
(1) permission to appeal is granted; and
(2) the appeal is dismissed.
VICE PRESIDENT
Appearances:
M Follett of counsel for the appellant.
M Gibian SC of counsel for the respondent.
Hearing details:
2021.
Sydney and Melbourne (via video-link):
18 November.
Printed by authority of the Commonwealth Government Printer
<PR736548>
1 [2021] FWC 4572
2 AE505609
3 [2021] FWC 4572 at [75]
4 Ibid at [69]
5 Ibid at [57]
6 Ibid at [59]
7 Ibid at [60]
8 Ibid
9 Ibid at [63]
10 Ibid at [64]
11 Ibid at [65]
12 Ibid at [67]
13 Ibid at [68]
14 Ibid
15 Ibid at [75]
16 For a discussion of the principles of construction see for example WorkPac Pty Ltd v Skene [2018] FCAFC 131, 264 FCR 536 at [197] and the authorities referred to therein
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