Shop, Distributive and Allied Employees Association
[2021] FWC 3785
•2 JULY 2021
| [2021] FWCA 3785 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.217 - Application to vary an agreement to remove an ambiguity or uncertainty
Shop, Distributive and Allied Employees Association
(AG2021/254)
WOOLWORTHS SUPERMARKETS AGREEMENT 2018
Retail industry | |
COMMISSIONER MCKINNON | MELBOURNE, 2 JULY 2021 |
Application to vary enterprise agreement to remove ambiguity or uncertainty – public holiday entitlements – whether agreement can be varied – form of variation.
[1] The Woolworths Supermarkets Agreement 2018 1 covers Woolworths Group Limited, Woolworths (South Australia) Pty Limited, the Shop, Distributive and Allied Employees Association (SDA), the Australasian Meat Industry Employees Union (AMIEU) and the Australian Workers’ Union (AWU).
[2] For approximately 18 months, there has been a dispute between Woolworths and the SDA about the rate of pay for shifts that commence on the day before the public holiday and end on the public holiday – a scenario that on its face is not expressly dealt with in the Agreement. There is also a dispute about the entitlement to payment for public holidays for employees who do not work them, relating to the meaning of “without loss of pay”.
[3] The SDA has applied to vary the Agreement by consent to resolve the disputes by removing what it says is ambiguity or uncertainty arising from clause 19 of the Agreement. Woolworths and the AWU support the application and there is no objection from the AMIEU.
[4] The questions are whether clause 19 of the Agreement is relevantly ambiguous and/or uncertain and if it is, whether the variations proposed by the parties should be made.
Is clause 19 of the Agreement ambiguous or uncertain?
[5] The approach to interpretation of enterprise agreement terms is well settled. The starting point is to consider the ordinary meaning of the words used in the Agreement, having regard to their industrial context and evident purpose. The search is for the objective common intention of the makers of the enterprise agreement, who likely had a ‘practical bent of mind’ rather than being focused on legal niceties and jargon. The focus of the inquiry is on the language used to give effect to their agreement. Where there is ambiguity, evidence tending to establish relevant objective background facts known to both parties may be admitted to aid interpretation. 2
[6] Principles relevant to the variation of agreements to remove ambiguity or uncertainty were discussed in Bradnam’s Windows & Doors Pty Ltd (Dandenong South Manufacturing) and Australian Workers’ Union Enterprise Agreement 2018 3 and are summarised here:
1. The first task is to identify and make a positive finding about whether there is ambiguity or uncertainty in the enterprise agreement, because the existence of ambiguity or uncertainty is a jurisdictional prerequisite to the exercise of discretion.
2. Considering whether there is ambiguity or uncertainty involves an objective assessment of the words in question, read in context. It is not enough that there are rival contentions about the proper meaning of the term(s).
3. If there is ambiguity or uncertainty, the Commission must consider whether to exercise discretion to vary the agreement. The discretion does not extend to giving effect to new and substantive changes to an enterprise agreement, which must instead be dealt with under section 210 of the Act.
4. A decision to remove uncertainty or ambiguity should give effect to the substantive agreement made between the parties on the matter. This requires an understanding of what the relevant agreement actually was. The point is to ensure that the variation resolves the ambiguity or uncertainty without going beyond that task by making a substantive change to the agreement that was made.
5. The Commission cannot create a new agreement provision to fill a void, or to give effect to something that the parties have only agreed upon after the enterprise agreement was made.
6. That the parties agree about the meaning of a term, or how an enterprise agreement should be varied, is relevant but not determinative of the variation that should be made to resolve an ambiguity or uncertainty.
[7] Clause 19 of the Agreement deals with public holidays. An important element of clause 19 is that working on public holidays is voluntary. Employees cannot be required to work on public holidays and Woolworths is not required to roster employees on public holidays. The operational needs of Woolworths determine whether it rosters employees who volunteer to work on a public holiday or not. Special rules apply for Christmas Eve, New Year’s Eve and Easter Sunday.
[8] Clause 19.1 of the Agreement says this:
“19.1. Working or not working on public holidays
a. In this Agreement, public holiday has the same meaning as in the NES.
b. Working on a public holiday is voluntary. A team member cannot be required to work but may volunteer to work on any public holiday as provided for in this clause.
c. Team members who would normally be rostered to work may volunteer to work on a public holiday (or part of it) and will be paid the relevant penalty rate for any time so worked. Woolworths may decline any request to volunteer if there is no operational need for the team member to work on a public holiday. All team members are entitled to be absent from work on a day or part-day that is a public holiday in the place where the team member works, and cannot be required to work if they do not volunteer to work.
d. Woolworths may or may not open for trade on public holidays. If Woolworths is trading on a public holiday, Woolworths may communicate to team members that it is seeking volunteers. Woolworths is not obliged to roster all team members who volunteer on a public holiday, and will roster team members based on operational needs.
e. If a public holiday or a part public holiday is substituted to another day or part day by a law of a State or Territory the substituted day or part day is a public holiday and the original day or part day is not a public holiday.
f. Depending on whether a team member works on a public holiday or not, the following entitlements will apply:
If the team member WORKS on the public holiday: | If the team member is ABSENT on the public holiday: | |
Full-time or part-time team member whose standard roster WOULD include the public holiday as a working day: | Hours worked are paid at public holiday penalty rates OR team member can request TOIL or an equivalent day of annual leave instead | Day off is paid at ordinary base rate of pay for the rostered working day as per the team member’s standard roster (without penalty rates or loadings) |
Full-time or part-time team member whose standard roster would NOT include the public holiday as a working day: | Hours worked are paid at public holiday penalty rates OR team member can request TOIL or an equivalent day of annual leave instead | Unpaid |
Casual team member (does not have a standard roster) | Hours worked are paid at public holiday penalty rates | Unpaid |
g. Woolworths must not change a team member’s standard roster to avoid or reduce a public holiday penalty payment. If this occurs, the team member will be entitled to the payment or benefit of the public holiday they would have received but for the roster change.”
[9] Clause 19.2 of the Agreement says:
“19.2. Public holiday penalty rates
a. The following penalty rates apply for hours worked on public holidays:
Team member | Public Holiday Pay Rate |
Full-time and part-time team members | Base rate + 125% |
Casual team members | Base rate + 150% (inclusive of casual loading) |
b. These rates apply instead of any rates in the tables in clauses 6.2 and 6.3, and instead of any shift work or bakery production team rates in clause 11.”
[10] Clause 19.4 of the Agreement says:
“Engagement across two days
For the purposes of this clause, where a shift falls partly on a public holiday, a shift that commences on the public holiday shall be regarded as the public holiday shift. Provided that a team member who is not required to work or who elects not to work on a public holiday shift shall be entitled to be absent without loss of pay.”
Payment for public holidays commencing on the day before the public holiday
[11] The parties submit that clause 19.4 of the Agreement is ambiguous or uncertain because it is not clear about the rate of pay that applies to rostered shifts starting on the day before a public holiday and ending on a public holiday. In this scenario, are public holiday penalty rates payable for hours of work during the shift that fall on the public holiday or not? The ambiguity or uncertainty is said to arise from the different use of language in clauses 19.1, 19.2 and 19.4 of the Agreement.
[12] In clause 19.1(c), the entitlement for team members who would normally be rostered and who volunteer to work on a public holiday “(or part of it)” is described as the relevant penalty rate “for any time so worked”.
[13] The table in clause 19.1(f) further defines the entitlement to payment for public holidays. For the employees described in clause 19.1(c), the entitlement arises for “hours worked” on “the public holiday”. Similarly, clause 19.2 sets out the penalty rates for “hours worked” on public holidays.
[14] For employees who would ordinarily be required to work on the public holiday but are absent, the table in clause 19.1(f) describes “the public holiday” as a “working day”, a “day off” and a “rostered working day”. “Day” is defined in the Agreement as “a day of the week, midnight to midnight”. However, the connection between “day” and “work” in each of these expressions means that they refer to the entitlement to be absent for the hours of work on a public holiday that an employee would ordinarily be rostered to work.
[15] The phrases “any time so worked” and “hours worked” in clauses 19.1(c) and 19.2 of the Agreement lend support for an interpretation of clause 19 that requires penalty rates to be paid for any time worked on a public holiday – including any part of a shift that falls on a public holiday. However, this is too narrow a reading of the words in context because the words “the public holiday” have a modified meaning in clause 19.4 where a single shift involves work on two different days.
[16] Such an interpretation also delivers different monetary outcomes for the same type of shift due only to whether the shift started or ended on the public holiday. An employee working “the public holiday shift” as defined in clause 19.4 for four hours on a public holiday and four hours on an ordinary day would be entitled to penalty rates for the entire shift. An employee working four hours on a public holiday and four hours on an ordinary day – but 24 hours earlier – would be entitled to payment at ordinary rates for half of the shift and penalty rates for the remainder. This is a result that is unlikely to have been intended by the parties.
[17] Clause 19.4 of the Agreement deals with “engagement across two days”: the scenario where only part of a rostered shift falls on a public holiday. This can occur either on a shift that starts on the public holiday and ends the next day, or on a shift that starts on the day before a public holiday and ends on the public holiday. For the purposes of clause 19, “a shift that commences on the public holiday shall be regarded as the public holiday shift.”
[18] While the word “shift” is not used elsewhere in clause 19, it is a term used in other clauses of the Agreement to refer to an employee’s consecutive rostered hours of work, usually on one day, and not only for shift workers. The table in clause 7.1 of the Agreement refers to “time worked per shift”. Break time principles in clause 7 are set out for differing shift scenarios. Clause 8 deals with the minimum break between shifts and casual shift start times, among other things. In the Agreement, the word “shift” is used interchangeably with references in clause 19 to the “working day”, “rostered working day” or a day that would usually be included in an employee’s “standard roster”.
[19] Because engagement across two days can occur in two ways, clause 19.4 nominates “the public holiday shift” for the purposes of clause 19: that is, the shift that starts on the public holiday. The words “shall be regarded as the public holiday shift” are words of designation. A shift with consecutive rostered hours of work across two days, ending on a public holiday, is not “the public holiday shift” for the purposes of clause 19. As a result, public holiday entitlements in clause 19.1 and 19.2 apply to “the public holiday shift” as defined in clause 19.4. This is “the public holiday” to which clause 19.1 refers, and for which clause 19.2 sets the applicable penalty rate.
[20] A rostered shift that starts on a public holiday and ends on a day that is not a public holiday attracts public holiday penalty rates for the entire shift, subject to any election to substitute payment of penalty rates for time off in lieu or additional annual leave. A rostered shift starting on a day that is not a public holiday and ending on a public holiday is not “the public holiday shift” for the purposes of clause 19 and does not attract public holiday penalty rates for any part of the shift, including hours of work on a gazetted public holiday.
[21] An employee who would usually be rostered to work on a shift designated as “the public holiday shift” by clause 19.4 but who does not work, either because they are not rostered on or have elected not to work, is entitled to payment at their ordinary base rate of pay for the entire shift. This means payment at the base rate of pay prescribed by clause 4.1 and 4.3 of the Agreement which applies to ordinary hours of work (discussed further below). They are not entitled to public holiday penalty rates.
[22] There is no entitlement to payment for public holidays for employees who do not work on public holidays, either because those hours of work do not form part of their standard roster or they are a casual employee who is not rostered to work.
[23] The above analysis illustrates that it is possible to ascertain the meaning of clause 19 – in relation to the rates of pay for work on public holidays where a shift falls on two separate but consecutive days – by applying standard interpretation principles. However, I accept that the Agreement is uncertain in this regard because the concepts of “hours worked” and “any time so worked” in clause 19.1 and 19.2 – at least on the face of the Agreement – apply to the entitlement to payment for public holidays covered by clause 19.4 in a way that potentially conflicts with the entitlement to be paid for “the public holiday shift”.
[24] The uncertainty is not resolved by the language of clause 19.4, even though it seeks to address the particular scenario of engagement across two days. This is because it deals with only one of the two possible scenarios in designating which is “the public holiday shift”. Clause 19 is clear about the rate of pay that applies to a shift spanning two days starting on a public holiday, but is unclear about the rate of pay that applies to a shift spanning two days that ends on a public holiday. The Agreement deals with these shifts by implication only. What remains unsaid leaves the door open to confusion about whether public holiday penalty rates are payable for hours actually worked on a public holiday for shifts not designated as “the public holiday shift”.
The meaning of “without loss of pay” for employees who do not work on public holidays
[25] The parties submit that clause 19 is also ambiguous or uncertain in relation to the rate of pay for absence on public holiday shifts that span two days, described in clause 19.4 of the Agreement as an entitlement to absence “without loss of pay”. Does “without loss of pay” mean payment in accordance with clause 19.1 (that is, “at the ordinary base rate of pay” without any “penalty rates or loadings” per clause 19.1(f)) or payment of the amount that would have been earned if the employee had worked the shift as part of their standard roster? The latter is potentially wider in scope than the former for shifts that ordinarily attract penalties or loadings, such as night or weekend work.
[26] The phrase “without loss of pay” ordinarily refers to an entitlement to be paid what would have been earned for relevant work but for some intervening factor. The value of the amount depends on how the relevant industrial instrument applies to the work in question. The question is whether the phrase should be given its ordinary meaning or a different, context-specific meaning in light of its purpose and the terms of the Agreement as a whole.
[27] Clause 19.4 of the Agreement is novel to the parties in the sense that it was not carried over from an earlier enterprise agreement between them. It likely has its origins in clause 30.3(e) of the General Retail Industry Award 2010 4(as it then was), which covered and applied to relevant employees at the time the Agreement was made. Appendix C to the Agreement explains:
“This Agreement provides a different hourly pay rate and penalty rate structure to our previous enterprise agreement, the Woolworths National Supermarket Agreement 2012 (2012 EA). This Agreement transitions Woolworths wage structure into closer alignment with the General Retail Industry Award.”
[28] As a term of the Award, clause 30.3(e) formed part of the clause dealing generally with shiftwork. It said this:
“For the purposes of this clause, where a shift falls partly on a public holiday, the shift which commences on the public holiday will be regarded as the public holiday shift. Provided that if the employee elects not to work on a public holiday shift such employee will be entitled to be absent without loss of pay.”
[29] There is substantial similarity in the wording of former clause 30.3(e) of the Award and clause 19.4 of the Agreement. The only material difference is the additional words “who is not required to work or” before the word “elects” in the Agreement. This recognises the principles of voluntary work and Woolworths’ right to choose not to roster employees on public holidays that are embedded in clause 19. Similar wording is found in clause 11 (and specifically clause 11.3) of the Agreement dealing with the arrangements for shiftworkers, but without an equivalent to the entitlements table in clause 19.1(f).
[30] The right to be absent “without loss of pay” in former clause 30.3(e) of the Award and clause 11.3 of the Agreement makes sense in a term dealing only with shiftwork. An employee is entitled to payment of public holiday penalties if they work the public holiday, and shift penalties if they do not. Shift work is performed during ordinary hours of work and shift penalties form part of a shiftworkers’ ordinary rate of pay.
[31] As a term of the Agreement dealing with employees other than shiftworkers, the right to absence “without loss of pay” in clause 19.4 is more difficult to understand – not only because it is potentially inconsistent with clause 19.1 but because it begs the question of what penalties or loadings fall within its scope, and which are otherwise excluded by clause 19.1.
[32] Of relevance is Appendix K to the Agreement, which defines “ordinary weekly earnings”asa part-time or full-time team member’s ordinary earnings for a week of ordinary hours worked as part of their typical standard roster, consisting of their base rate of pay plus any penalty rates or loadings they would normally receive for working those ordinary hours (not including any flex up worked, overtime or allowances paid). In other words, a team member’s normal “take home pay” for a regular week’s work – whatever that may be.
[33] The obvious penalty rate excluded by clause 19.1 is the public holiday penalty rate. But the words “penalty rates” in clause 19.1 are expressed generally, and in the plural. They also encompass the penalty rates for night and weekend work found in clauses 6.2 and 6.3 of the Agreement.
[34] The Agreement provides for loadings in the form of shift loadings, annual leave loading, casual loading and the “TTR” (temporary transition rates) in Appendix C. None of these are relevant to the entitlement of full-time and part-time employees to payment for public holidays in clause 19.1. Shift loadings are dealt with separately in clause 11 of the Agreement. An employee who exercises their right to absence on a public holiday is not taken to be on annual leave at that time. Self-evidently, full-time and part-time employees are not casual employees. Appendix C makes clear that the TTR does not apply on public holidays.
[35] Contextually relevant also is that Agreement entitlements and benefits that are also dealt with in the National Employment Standards (such as public holidays) are to be “inclusive of, and not in addition to” entitlements or benefits in the National Employment Standards (clause 1.5). Under section 116 of the Act, an employee is entitled to be absent from work on a public holiday and must be paid at their base rate of pay for ordinary hours of work falling on that day. The Act does not separately deal with the scenario of a shift that falls across two days, one of which is a public holiday. The entitlement to payment under the National Employment Standards is limited to payment for ordinary hours worked on the actual public holiday. This suggests an intention to adopt the minimum entitlements in the Act, including in relation to public holidays, for the purposes of the Agreement.
[36] It seems unlikely that the parties intended different outcomes to apply to absence on public holidays depending only on whether the shift fell on a single day or across two days. Yet that is the consequence of giving “without loss of pay” its ordinary meaning in clause 19.4. Under the Agreement, shifts that fall partly on a public holiday and partly on another day necessarily involve night work, because they end on one calendar day and continue through the beginning of another. Night work under the Agreement means work between the hours of 10pm and 6am (clause 9.3(d)). Night work for employees other than shiftworkers attracts different penalties depending on the terms of an employee’s engagement. The minimum penalty for night work is 25% of the base rate (see clauses 6.1(b), 6.2 and 6.3 of the Agreement).
[37] The rate of pay for an employee who is absent on a public holiday for which they are entitled to be paid under the Agreement is – under clause 19.1(f) of the Agreement – the ordinary base rate of pay, without penalties and loadings. The same employee whose absence occurred on a shift rostered across two days would be entitled to the ordinary base rate of pay plus at least the night work penalty applicable to the shift if “without loss of pay” is given its ordinary meaning. This is because the employee would ordinarily have undertaken night work on the shift and would have earned the night work penalty. A similar result flows for public holidays on weekends because of the penalty for weekend work under the Agreement. In a practical sense, one cannot comply with both clause 19.1(f) and clause 19.4 at the same time in these scenarios because the entitlement is simultaneously to payment at a rate of pay that is “with” and “without” penalties.
[38] It is unlikely that in adopting a modified version of clause 30.3(e) of the Award as a term of the Agreement, the parties intended the outcome to be different payment rules for absence on public holidays depending only on whether the shift fell on a single day or across two days. The better view is that the parties intended the table in clause 19.1 to set the payment rules for public holidays, and for clause 19.4 to deal with the specific scenario of engagements across two days. The words “without loss of pay” in clause 19.4 should be understood to have been intended to be subordinate to the payment rules in the table in clause 19.1, rather than intended to displace them. Read in context, in my view the parties intended their purpose to be that there be no loss of any entitlement to payment in accordance with clause 19.1.
[39] For these reasons, I agree that there is ambiguity in clause 19 in relation to the entitlement to payment for absence on a public holiday for shifts that span two calendar days. The ambiguity arises because there are two competing payment rules dealing with the same circumstance in a single clause. It only arises in relation to employees whose standard roster would include “the public holiday shift” and who are absent on that day. Employees who would not ordinarily be rostered to work on a public holiday shift are only entitled to payment for the shift if they work it. In clause 19.1, this is made unambiguous by the word “unpaid” in the second and third rows of the table. An employee who has no expectation of payment for a shift they would not ordinarily be required to work are not entitled to be paid for that shift. For these employees, there is no relevant “loss” of pay arising from their absence.
[40] For completeness, it does not necessarily follow that the conclusion I have reached in relation to the meaning of “without loss of pay” in clause 19.4 of the Agreement would apply equally to the meaning of the same words in clause 11.3 of the Agreement. As I have noted, that clause deals specifically with the entitlements for shiftworkers, whose circumstances are different to other team members. The absence of a table similar to that found in clause 19.1(f) may also affect how clause 11.3 is understood. It is not a matter that falls for decision in this case.
Should the Agreement be varied?
[41] The parties submit that the Agreement should be varied to include the additional words in bold below:
“19.4 Engagement across two days
For the purposes of this clause, where a shift falls partly on a public holiday, a shift that commences on the public holiday shall be regarded as the public holiday shift and all hours will be paid at public holiday penalty rates for the rostered shift. Provided that a team member who is not required to work or who elects not to work on a public holiday shift shall be entitled to be absent without loss of pay. For the further avoidance of doubt:
a. a team member who works a shift which commences the day before a public holiday and which finishes on a public holiday shall not be regarded as having worked a public holiday shift and shall be paid the team member’s base rate of pay and any applicable shift penalties but not public holiday penalty rates for the rostered shift or any part of it;
b. a team member who is not required to work, or who elects not to work, on a shift which falls partly on a public holiday (that is, a shift commencing on the public holiday), shall be entitled to be absent and be paid the team member’s base rate of pay and any applicable shift penalties but not public holiday penalty rates for the rostered shift or any part of it.”
[42] The proposed variation addresses the uncertainty in the Agreement in relation to the penalty payable for public holiday shifts that end (but do not begin) on a public holiday. However, it does not resolve the ambiguity in relation to payment for absence on public holidays because it does not give effect to the agreement that was made. It does not qualify the meaning of “without loss of pay” in clause 19.4 and it provides for payment of shift penalties in circumstances that not contemplated by the Agreement.
[43] My preliminary view is that the Agreement should be varied in the terms set out in the draft order attached to this decision. As my conclusion on the meaning of clause 19 differs from the agreed position of the parties, it is appropriate that a further opportunity be provided for the parties to be heard before any variation is made.
[44] The parties are directed to file any further submissions in relation to whether the variation should be made, including whether the variation should be made in the form set out in the draft order by 4.00pm on 14 July 2021, and to file any further submissions in reply to those submissions by 4.00pm on 28 July 2021.
[45] The application will then be determined.
COMMISSIONER
Printed by authority of the Commonwealth Government Printer
<AE501243 PR731204>
Final written submissions:
SDA, 16 April 2021.
Woolworths Group Limited & Woolworths (South Australia) Pty Ltd, 14 May 2021.
PRXXXXX X
DRAFT ORDER
Fair Work Act 2009
s.217—variation of enterprise agreement to resolve ambiguity or uncertainty
Application by SDA
(AG2021/254)
COMMISSIONER MCKINNON | MELBOURNE, XX JULY 2021 |
Application to vary enterprise agreement to resolve ambiguity or uncertainty in relation to public holiday entitlements
A. Pursuant to s.217 of the Fair Work Act 2009 (Cth) (the Act), I order that clause 19.4 of the Woolworths Supermarkets Agreement 2018 be varied as follows:
19.4 Engagement across two days
19.4.1 For the purposes of this clause, where a shift falls partly on a public holiday, only a shift that commences on the public holiday shall be regarded as the public holiday shift. Public holiday penalty rates will be paid for all hours worked on the public holiday shift. Public holiday penalty rates do not apply to shifts falling partly on a public holiday that are not “the public holiday shift” for the purposes of this clause.
19.4.2 Provided that payment for absence for a team member who is not required to work or who elects not to work on a the public holiday shift shall be entitled to be absent without loss of pay in accordance with clause 19.1(f).”
B. The variation operates from 14 January 2019.
COMMISSIONER
1 [2019] FWCA 7; AE501243.
2 Workpac Pty Ltd v Skene [2018] FCAFC 131 at [197]; see also Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) v Berri Pty Limited[2017] FWCFB 3005.
3 [2019] FWCA 979.
4 MA000004.
0
5
0