Shop, Distributive & Allied Employees' Association v Aldi Foods Pty Ltd
[2022] FedCFamC2G 799
Federal Circuit and Family Court of Australia
(DIVISION 2)
Shop, Distributive & Allied Employees' Association v Aldi Foods Pty Ltd [2022] FedCFamC2G 799
File number(s): SYG 2219 of 2020 Judgment of: JUDGE HUMPHREYS Date of judgment: 30 September 2022 Catchwords: INDUSTRIAL LAW – Fair Work Act 2009 – whether employees not paid for work performed – what is work – Cross-Claim – whether Enterprise Agreement stipulates payment according to contract hours – whether contract hours should be offset against time paid but not worked. Legislation: Fair Work Act 2009 (Cth) ss 50, 323
Aldi Prestons Agreement 2017
Aldi Prestons Agreement 2020
Cases cited: Australian Maritime Officers’ Union v Remick Pty Ltd T/A Pro Dive Cairns [2020] FWC 431
Warramunda Village Inc v Pryde (2002) 116 FCR 58
Division: Division 2 General Federal Law Number of paragraphs: 53 Date of last submission/s: 27 September 2022 Date of hearing: 9 – 11 August 2022 Place: Parramatta Counsel for the Applicant: Mr Guy Counsel for the Respondent: Ms Perigo ORDERS
SYG 2219 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: SHOP, DISTRIBUTIVE & ALLIED EMPLOYEES' ASSOCIATION
Applicant
AND: ALDI FOODS PTY LTD
Respondent
order made by:
JUDGE HUMPHREYS
DATE OF ORDER:
30 September 2022
THE COURT ORDERS THAT:
1.Pursuant to s 545 of the Fair Work Act 2009 (Cth) (FW Act), it is declared that the Respondent contravened ss 50 and 323 of the FW Act.
2.Pursuant to section 545 of the FW Act, the respondent pay compensation to its employees for the contraventions set out in order 1.
3.The parties are directed to confer and agree, if possible, on a methodology for the determination and payment of compensation to its employees. If no agreement can be reached, the parties are to present their proposals to the Court for the Court to determine the appropriate manner for the calculation of compensation payable to each of the respondent’s employees affected by the contraventions found.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE HUMPHREYS
Introduction
The applicant, the Shop, Distributive and Allied Employees Association (‘SDA’) represents workers employed by the respondent, Aldi Foods Pty Ltd (Aldi) at the Prestons Distribution Centre (‘PDC’) located in South-West Sydney.
This judgement is restricted to the question of liability only. Should Aldi be determined liable for the breaches alleged, then a separate hearing will be required to determine the appropriate penalties and other orders.
The SDA claims that from August 2018 and continuing to date, Aldi directed and continued to direct employees at the PDC to work in excess of their contract hours, by directing them to commence work 15 minutes prior to their rostered starting time. This claim is denied by Aldi.
This claim is based on the requirement for workers to undertake a number of tasks after clocking on but prior to the commencement of paid working hours. These tasks centre on walking to a materials handling equipment area, locating and then undertaking various safety checks on stock pickers (a forklift type vehicle), driving the said vehicle some distance to a central location, picking up and checking a communication device, recording various things on a sign in sheet, and then commencing the shift by undertaking a group physical warm up and a toolbox talk. The amount of time these tasks take, on average, is disputed. The fact the tasks are required to be undertaken prior to the start of the paid work shift is not disputed.
Aldi claims that it is not underpaying its workers, and that employees are only expected to be ready to commence work at the start of the rostered shift and that this expectation does not contravene the provisions of the Fair Work Act 2009 (Cth) (‘the Act’).
The SDA argues that Aldi has failed to pay the part-time hourly rate to employees for additional time worked, or bank the additional hours, in contravention of the Part B of the Aldi Prestons Agreement 2017 (‘the 2017 Agreement’). In so doing, the SDA submit that Aldi have contravened ss 50 and 323(1)(a) of the Act. The SDA seek declarations, pecuniary penalties and compensation for the unpaid wages.
Aldi have filed a Cross-Claim, seeking:
1. A declaration that the contract hours as defined in the relevant enterprise agreement start at the commencement of the employees rostered shift, or alternatively;
2. The full period of contract hours may be offset against time paid but not worked at the end of the employees shift under the relevant enterprise agreement.
The Law
The law in this matter is relatively confined. Section 50 of the Act is as follows:
A person must not contravene a term of an enterprise agreement.
Section 323(1)(a) of the Act is as follows:
1) An employer must pay an employee amounts payable to the employee in relation to the performance of work:
a)in full (except as provided by section 324)…
Section 324 of the Act is not relevant to the proceedings. The applicant contends that the pre-commencement tasks required to be carried out by employees constitute work.
The Evidence
The applicant called three witnesses in support of their case, Joseph El Ghafari, Paulo Lole and Amen Rastakhiz. The respondents called Shane Pattath, Jake Konnecke, Donna Jenkins and Jason Nicholas. It is common ground between the parties (although no Statement of Agreed Facts has been provided to the Court) that the following pre-commencement tasks are performed prior to the beginning of a rostered shift:
A. Attendance of the employee is recorded using a fingerprint scanner;
B. Employees then walk onto the warehouse floor and find an order picker to use;
C. Employees wipe down the order picker with the sanitising wipe (during the COVID-19 pandemic);
D. Perform a preoperational checks on the order picker. This includes checking the relevant battery level, ensuring the wheels of the picker are not damaged, checking to ensure the forklift at the rear of the picker elevates properly, and driving the vehicle both forward and reverse to ensure it is operating safely;
E. Employees then drive the order picker to the selections area;
F. Acquire a headset, if the employee does not already have one, a Talkman (a communications device used for instructing the employee as to what items to ‘pick’ from the warehouse and take to an area for loading onto relevant trucks for distribution). The Talkman is checked to see if it is working correctly.
G. Employees acquire shrink wrap, if shrink wrap was not on the order picker;
H. Employees then complete a checklist, which includes recording the number of the picker being used by them and the number of the Talkman being used, as well as the battery percentage charge of the order picker and the Talkman.
Employees use markers in the performance of their duties and may be required to obtain a new marker from the selection desk or fill their marker with ink. Again, it was not disputed that this could be done during the course of the shift and was not required to be done prior to the commencement of shift.
On some days, the employees may seek a picker that has a higher battery charge, so as to avoid the necessity to change batteries during the shift.
If a picker was found to be faulty, there was an expectation that employees would tag the picker recording the fault, undertake pre-operational checks on an alternative picker, and report the faulty picker to a supervisor.
Once these tasks are completed, employees participate in warm-up stretching exercises, which may be led by a member of the picking team and a “tool box” talk by supervisors. Payment of employees commences from the time that the warm-up exercises start, which is the listed commencement time of the rostered shift. For example, if the rostered time of commencement of the shift is 5:00am, employees are expected to have clocked on and undertaken the pre-commencement tasks and be at the selections area for the warm-up exercises by 5:00am. After the warm-up exercises and the ‘tool box talk’, employees begin work ‘picking’ items as directed through the Talkman.
Firstly, the Court is satisfied that the activity in recording attendance through the use of a fingerprint scanner is the commencement point of attendance at the place of employment. This activity is not work, but is merely the commencement time following which certain pre-commencement tasks undertaken. It is not claimed by the applicants that any delay in recording attendance, for example, having to line up to use the fingerprint scanner, constitutes work and is payable as part of the contract hours.
There was a dispute between the parties as to the average time that it would take an employee to reasonably perform the pre-commencement activities. A video was taken at the direction of Thi Minh Jim Le and tendered into evidence. Mr Le was previously the relevant Logistics Manager or overall supervisor for the warehouse picking section. The video shows a single employee undertaking the pre-commencement tasks in 5:26 minutes. The Court does not consider the video to be reliable as to the average time it would take an employee to conduct the pre-commencement tasks at the beginning of a shift. Rather, it is a best case scenario.
First, the video activity was performed by a single employee, whereas at the beginning of a shift there could be anything up to 20 employees signing on and undertaking the pre-commencement tasks at the same time. There was no allowance within the video for there to be any congestion in undertaking tasks, waiting time while lining up to obtain a picker and check it, or lining up to fill in the checklist. The employee in the video did not need to give way to another picker at any intersection within the warehouse whilst moving towards the selections area for the warm-up exercises.
Further, the video does not reflect the time for an employee to change pickers due to a low battery or faults in the first picker selected. Mr Rastikaz gave evidence, which the Court accepts, that pickers did have faults and it felt like a lucky day if you got a picker that was fully functional.
Evidence was also given by Mr El Gharfari, which the Court accepts, of regular faults in the Talkmans and the need with the newer model of Talkman to ‘pair’ the headset with the Talkman via a ‘Bluetooth’ facility. The video showed an older model Talkman that was hardwired and worked without fault. ‘Pairing’ via bluetooth would add time to the pre-commencement tasks.
In particular, close inspection of the video does not indicate that the employee filling the entirety of the details on the checklist or the employee needing to check the relevant numbers of the Talkman and/or the picker prior to filling in the checklist.
The video does not include any additional time obtaining shrink wrap and/or either obtaining a new marker or refilling an existing marker with ink. The Court finds that the video was not representative of the average time it would take an employee to undertake the above pre-commencement tasks and, in fact, it took some minutes longer on average.
On behalf of the applicants, it was put that similar tasks were performed at the end of a shift. In cross examination, Mr Le accepted that undertaking the post-shift tasks took less time than the pre-shift tasks. He agreed, however, that the post shift tasks took a minimum of eight minutes to complete (transcript 248.28 – 249.29). The Court accepts this evidence.
In the circumstances, having rejected the video as not being representative of the average time taken to complete the pre-commencement tasks, and that the post-work tasks of a similar nature take a minimum of eight minutes to complete, allowing for congestion, given there are a number of employees starting at the same time, and that it may be necessary to undertake additional tasks, such as obtaining shrink wrap, the Court is satisfied as a fact that the average time taken by an employee to perform the above pre-commencement tasks is 10 minutes.
The next question to be determined by the Court is whether there was a direction given by the respondent to employees to attend work 15 minutes prior to the commencement time.
Mr El Gharfari, at [31] of his Affidavit sworn 23 June 2021, states as follows:
It was generally known in ALDI Prestons amongst Warehouse Operators that the above (pre-commencement) tasks were to be completed prior to the rostered start time and that we were required to be at ALDI Prestons 15 minutes prior to our rostered start time.
Mr El Gharfari goes on to depose that on a number of occasions, he heard Mr Konnecke tell warehouse operators at group meetings to be at work 15 minutes prior to the commencement time of the shift. He also recalls Ms Jenkins and Mr Pattath saying words to the effect of “be prepared for your shift prior to it starting.”
Mr Lole gave evidence that he was told that, words to the effect, when commencing at Aldi “before you start your shift, be here 10 to 15 minutes early so you can get all your stuff ready to start your shift. Mr Rastikhaz gave similar evidence.
During cross-examination, it was put to each of the above witnesses that no such direction was given. Each maintained that either such a direction was given or that it was implied that it was necessary to arrive 15 minutes early to the start of a rostered shift in order to complete the tasks set out above.
Each of the respondent’s witnesses denied that any explicit direction was given. In cross-examination, they also did not resile their positions. The Court is not in a position to prefer the evidence of either the applicant’s or the respondent’s witnesses in this regard. Accordingly, the Court is not satisfied that an explicit direction was given that employees were to be at work 15 minutes prior to the commencement time of the shift.
That, however, is not the end of the matter. Mr Konnecke conceded in cross-examination that there was an expectation that employees had to be ready for shift prior to shift starting which included the pre-commencement tasks listed above. Further, if an employee arrived at the commencement time for their shift without a picker, it would be regarded as unsatisfactory: (see; transcript 170.40).
Further, if there was a consistent lateness or not having completed all pre-commencement tasks prior to the nominated time of the shift commencing, it could result in a Record of Conversation being undertaken between Mr Konnecke as the immediate supervisor and the employee. Ms Jenkins deposed that a number of negative Records of Conversation could lead to the employee being spoken to by a Logistics Manager, such as Mr Le and a Formal Warning being issued: (see; Affidavit of Donna Jenkins, 30 July 2021 [15]).
The Court is reasonably satisfied, as a fact, that there was a clear implied direction that employees had to arrive early, prior to the shift commencing, in order to undertake the pre-commencement tasks listed above. Failures to comply with that implied direction would lead to a Record of Conversation taking place. A consistent failure to comply with the implied direction would lead to disciplinary action being considered by management. Employees were thus required to arrive earlier than the paid commencement time of a shift and required to undertake the pre-commencement tasks in unpaid time or risk the possibility of disciplinary action being taken against them.
Do the pre-commencement tasks constitute ‘Work’?
The parties are in agreement that the phrase ‘work’ is not been universally considered or defined by the courts or the Fair Work Commission.
In Australian Maritime Officers’ Union v Remick Pty Ltd T/A Pro Dive Cairns [2020] FWC 431, the Fair Work Commission said the following:
[60] It will usually be the case that where an employee covered by a modern award or other industrial instrument, is directed or required by an employer to be at the employer’s premises or at a particular location or locations where work is performed, for a particular period of time, to provide or be available to provide service for the employer, the employee is at work rather than carrying on private activities, and is entitled to payment.
[61] The question of whether the employer requires the service to be provided is relevant to whether an employee is working. A requirement can be direct or indirect. In some cases, because of the location or the context in which activities are undertaken, the issue of whether those activities are required by the employer or whether they are work may be vexed because the employee is put in a position where he or she has no real option but to perform certain duties.
In Warramunda Village Inc v Pryde (2002) 116 FCR 58 at [17], the Federal Court stated:
[17] An employee who attends at the place of employment pursuant to the employer’s direction to be at the employer’s premises for a period of time and be available to provide service at the premises as required by the employer, is not carrying on private activities but is providing service to the employer. Such an employee is at “work” for the purposes of the 1995 Award …
Similarly, in Construction, Forestry, MMEU v Peabody Energy PCI Mine Management Pty Ltd [2019] FWC 4641, the Fair Work Commission found that where an employer requires an employee to be at work at a specific time and the activity the employee is undertaking before the commencement of operational duties is not a private activity but provides benefit to the employer, the activity or more likely to be found to be work. At [16] the Commission stated:
In many industries it is common for employees to arrive at work before the specified start time and undertake activities such as signing in or registering their presence in the workplace, storing their personal effects in lockers, putting on uniforms or PPE, storing or consuming food or otherwise interacting with work colleagues, prior to commencing operational duties.
The characterisation as to whether or not activities will constitute work will depend upon the construction of the relevant industrial instrument and whether it makes a specific provision for the activity in question, and the facts in the case.
In this case, the pre-commencement activities cannot be characterised as private activity in that they do not involve any activities that are of benefit to the employee, such as storing of personal effects, putting on uniforms or PPE. Each of the activities outlined above was solely to the benefit of the employer, in that by the time the employee arrived at a designated location for the commencement of shift, all necessary activities for the employees to get immediately to work had been completed. There was no personal benefit to the employee in the activities carried out. Each was to the benefit of the employer. In these circumstances, the Court is satisfied that the activities carried out constitute work.
The respondent submitted that the requirement for employees to be at the selection desk ready to begin work at the commencement of the scheduled start time had been consistently applied under both the 2017 agreement and the 2020 agreement. The applicant had been a bargaining representative for both agreements.
The applicant opposed the approval of the 2017 agreement. The grounds of opposition related to the ‘better off overall’ test as well as the bankable hours provision and leave entitlements within the 2017 agreement. The issue raised in these proceedings was not raised as a ground of opposition to the 2017 agreement. Similarly, the applicant did not raise the issue of working arrangements in the application to approve the 2020 agreement.
It was submitted the agreements provide for employees to be paid their contract hours each fortnight. Contract hours are defined to include all hours actually worked. Hours actually worked or authorised hours are hours physically spent by the employee in the workplace, excluding unpaid breaks. Employees are rostered, based on the contract hours, to commence work in accordance with the respondent’s operational requirements. The authorised hours are the hours the employee is rostered, based on the contract hours to work each day.
It was submitted that having regard to the provisions of two agreements and the way in which they have been applied consistently by the respondent, the pre-commencement tasks have always been done prior to the commencement of work and do not form part of the employee’s contract hours.
The Court rejects this assertion, as it appears to be based on the presumption that had it has been the custom and practice at the workplace for the pre-commencement tasks not to form part of the contract hours for the employee.
No evidence was produced by way of reference to the enterprise agreement or otherwise to show that these pre-commencement tasks were acknowledged and deliberately excluded from hours worked. The fact that it may have been the respondent’s understanding that the pre-commencement tasks did not form part of the contract hours does not mean that the applicants are barred from seeking to have them included within the relevant hours worked. That is a matter for the Court to determine on the basis of whether or not the activities are work for the purposes of the Act.
The Court accepts the submission of the applicants that the fact the applicant did not raise the issue that is the subject of these proceedings during the enterprise bargaining process for the 2017 and 2020 agreements does not estop or otherwise have any bearing on the competence of the matter presently before the Court. If the Court finds, as it has, that the pre-commencement task are work, then the time taken to perform those tasks is liable for payment by the employer.
The Cross Claim
The respondents have filed a Cross-Claim in the proceeding seeking, in summary:
1. A declaration that the contract hours as defined in the relevant enterprise agreement start of the commencement of the rostered shift; or alternatively
2. The full period of contract hours may be set off against the time paid but not worked at the end of employee shift.
In making out the first ground of the Cross-Claim, the respondent relies upon the submissions set out above that consistently, the pre-commencement tasks have always been done prior to the commencement of work and do not form part of the employee’s contract hours. For the same reasons as set out above, the Court rejects the first aspect of the Cross-Claim.
The second aspect of the cross-claim is that, if the time spent by the employees in undertaking the pre-commencement tasks is work, it should be set off against time not worked at the end of the employees shift. Evidence was given that at the end of the shift, the employee would report to a supervisor, and ask if there were any additional tasks required to be performed other than those related to the picking of items. Such tasks may include general tidying and cleaning or other task as directed by a supervisor. The length of time spent on these tasks could vary, depending upon the nature of the task to be performed. If the employee had worked more than six hours, employees were also entitled to a further 20 minute unpaid break. This would usually be taken in the meal room prior to the employee clocking out of the warehouse.
No evidence was led on behalf of the respondent that there was any direction or requirement that employees were to leave the premises and clock out within any set time of being dismissed by their supervisors. It was also acknowledged by the respondent that certain end of shift tasks were required to be performed by employees by way of checks on equipment and signing out. Further, there was no evidence presented as to any disciplinary or other action being taken against employees who took more time than others to leave the premises.
The respondent further relied upon the claim that employees had set contract hours which they worked each fortnight. Employees would be paid their set contract hours even if they worked less hours than those stipulated in their contract. In these circumstances, a bankable hours provision then applied. Such a provision, however, does not take account of a consistent requirement to undertake 10 minutes of unpaid work at the commencement of each shift.
The applicant submits that the respondent does not rely on any authority or power, either in statute or common law that allows the respondent to set off time at the end of the shift against work undertaken prior to the shift start which is not paid. The Court accepts this submission. Accordingly, the Cross-Claim has no merit.
Conclusion
The Court will hear the parties in respect of the appropriate basis for consideration of penalties and orders in relation to penalties, to whom the penalties should be paid, whether interest should be payable and costs.
I certify that the preceding fifty-three (53) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Humphreys. Deputy Associate:
Dated: 30 September 2022
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