Shop, Distributive and Allied Employees Association v Arora Markets Pty Ltd

[2014] FWC 2603

[2014] FWC 2603

FAIR WORK COMMISSION

DECISION

Workplace Relations Act 1996
s.709 - Application to FWC to have a dispute resolution process conducted (Div 5)

Shop, Distributive and Allied Employees Association
v
Arora Markets Pty Ltd
(DR2013/222)

Retail industry
COMMISSIONER BULL	SYDNEY, 17 APRIL 2014

Dispute about matter arising under enterprise agreement - interpretation of public holiday clause - plain meaning applied - ambiguity or uncertainty not found.

[1] The dispute relates to whether eligible employees covered by the Franklins National Retail Enterprise Agreement 2008 1(the Agreement) are entitled to a benefit for the Easter Sunday, 31 March 2013, public holiday in New South Wales, where the eligible employees were not normally rostered to work on that day.

[2] The Applicant is the Shop, Distributive and Allied Employees’ Association, NSW Branch (SDA) a named party to the Agreement. The Respondent, Arora Markets Pty Ltd while not a named party to the Agreement is said to be bound by the Agreement as a result of the transfer of business provisions of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act) and the Fair Work Act 2009 (FW Act) having purchased a number of supermarkets from Franklins Pty Ltd.

[3] The Agreement passed its nominal expiry date on 4 September 2011, being three years after the date of its commencement but continues in operation pursuant to the Transitional Act.

[4] The Grievance Procedure at clause 1.7 of the Agreement provides for unresolved grievances to be referred to the Australian Industrial Relations Commission for conciliation and arbitration if necessary. A conciliation conference was held on 18 November 2013, and further discussions occurred between the parties, however, the matter was unable to be resolved.

[5] There is no dispute that the grievance procedure has been complied with and that the Fair Work Commission (the Commission) has power to deal with the dispute.

SDA Submissions

[6] The SDA argues that the Respondent failed to provide a non working day benefit to the eligible employees covered by the Agreement for Easter Sunday 2013, in accordance with the Agreement. The SDA relies upon the terms of sub-clause 5.3(b) of the Agreement which reads as follows:

5.3 Public Holiday Replacement Day Principles for Permanent Team Members

...

(b) A Public Holiday that falls on a Permanent Team Member’s Non-Working Day

Should any of the Public Holidays fall on a full time Team Member's non-working day, such Team Member will receive another day off (the daily average of their working day over the 4 week cycle) in lieu thereof. Provided that:

(i) The replacement day is to be a mutually agreed day.

(ii) If the replacement day is not taken within 28 days, after the Public Holiday, it will be paid at the Team Member's ordinary rate of pay (including loadings as appropriate).

A part time Team Member will receive the same benefits as a full time Team Member where:

(iii) They work an average of 20 days per 4 week cycle; or

(iv) They work an alternating roster and the Public Holiday falls on a day on which the Team Member works, or occasionally works, as part of their roster cycle.

A permanent Team Member, regularly rostered Monday to Friday, will not receive Easter Saturday and Anzac Day when it falls on a Saturday or Sunday as Public Holidays unless a substitute day has been gazetted or proclaimed.

If a Public Holiday is proclaimed or gazetted on a weekend, and an additional or substitute Public Holiday is proclaimed or gazetted on a weekday in respect of that weekend Public Holiday, a permanent Team Member will not receive the benefit of an additional day off for that additional or substituted Public Holiday.

[7] It was submitted that the words in sub-clause 5.3(b) are clear and unambiguous. The SDA submit that a non working day benefit under the Agreement applies in circumstances where an employee is not normally rostered to work on a day on which a public holiday falls. This benefit is said to apply to eligible employees being all full time employees and part time employees who work an average of 20 days per four week cycle or work an alternating roster and the holiday falls on a day on which the employee works as part of their roster cycle.

[8] The benefit is said to be another day off at a time mutually agreed. If the day off is not taken within 28 days after the public holiday falls the employee receives payment for the day at their ordinary rate of pay including loadings. While the sub-clause excludes the non working day benefit from applying to Easter Saturday and Anzac Day for employees regularly rostered Monday to Friday, there is no exclusion for Easter Sunday.

[9] In reply to the Respondent’s argument that sub-clause 5.2(d) which provides that an employee normally rostered to work on a particular Public Holiday who does not work is entitled to payment based on their normal rostered hours, it is said this has no application to employees not rostered to work on a public holiday.

[10] It is put that the non working day benefit in sub-clause 5.3 applies only to certain eligible employees, part time employees who must meet certain criteria and permanent team members regularly rostered to work Monday to Friday. Whereas the entitlement in sub-clause 5.2(d) only applies where a store opens for trade on a public holiday and is normally rostered to work the public holiday. There is no reference in sub-clause 5.2 to what applies where an employee is not rostered to work. Consequently it is argued that sub-clauses 5.2 and 5.3 provide different entitlements, with 5.3(b) providing a benefit to eligible employees when a public holiday falls on their non-working day.

[11] The SDA also relies on a Memorandum sent out to Store Managers and others on 19 March 2012, by Franklins Pty Ltd advising:

Permanent employees who are rostered to work on Easter Sunday and their store is not open to trade then (sic) they will receive their normal pay and loadings for their rostered hours.

A fulltime team member whose non-working day falls on a (sic) Easter Sunday shall be paid by mutual agreement either:

i) A replacement day which is to be a mutually agreed day: or

ii) If the replacement day is not taken within 28 days, after the public holiday, it will be paid at the team member’s ordinary rate of pay (including loadings as appropriate). 2

(My emphasis)

Respondent’s Submissions

[12] The Respondent Arora Markets Pty Ltd purchased 17 supermarkets from Franklins Pty Ltd between May 2012 and February 2013. The 17 stores operated under the Agreement and continue to do so.

[13] The Respondent was not party to the negotiations for the Agreement and was not covered by the Agreement when the Memorandum advising of the Easter Sunday benefit to employees whose non-working day fell on Easter Sunday 2012, was sent out in March 2012.

[14] In the Respondent’s written submissions 3 it is put that there is ambiguity and uncertainty arising as a result of Easter Sunday being declared a public holiday after the Agreement’s approval in 2008.

[15] It is argued that sub-clause 5.3 must be considered against the legislative background and industrial landscape of the Agreement and in particular, that at the time of the making of the Agreement, Easter Sunday was not a declared public holiday in New South Wales. The Respondent states that its interpretation accords with the industrial context, wording and intention of the Agreement provision.

[16] In 2010, the Banks and Bank Holidays Act 1912 (NSW) was replaced by the Public Holidays Act 2010 (NSW). The 2010 Act commenced on 31 December 2010 and one significant change was the recognition of Easter Sunday as a public holiday. The Respondent’s argument is that the SDA interpretation that extends the non-working day benefit to Easter Sunday results in an injustice and inequity for the Respondent. 4 The Respondent submits there is no reasoning to contend that Easter Sunday should be treated differently from Easter Saturday or Anzac Day.5

[17] The Respondent submits that there has never been an intention for employees, regularly rostered to work Monday to Friday to receive the non-working day public holiday replacement day entitlement with respect to Easter Sunday. Easter Sunday should be treated in the same manner as Easter Saturday and Anzac Day where no benefit is provided unless a substituted day is proclaimed. With this is mind, it is not logical that Easter Sunday should become an exception.

[18] The Public Holidays Test Case 6 was relied upon by the Respondent to support the proposition that Easter Sunday should be considered the same as Easter Saturday and Anzac Day where they are not considered public holidays for permanent employees who are regularly rostered to work Monday to Friday when they fall on a weekend unless a substitute day is proclaimed.

[19] The Respondent also points to the costs involved in adopting the position put by the SDA.

Interpreting Enterprise Agreements

[20] Both parties referred the Commission to various decisions concerning the interpretation of enterprise agreements.

[21] In Kucks v CSR Limited 7 (Kucks), Madgwick J held that that a narrow pedantic approach to interpretation of awards should be avoided and meanings which avoid inconvenience or injustice may reasonably be strained for:

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

But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning. 8

[22] In Amcor Limited v Construction, Forestry, Mining and Energy Union 9 (Amcor) similar observations were made:

Clause 55.1.1 must be read in context. It is necessary, therefore, to have regard not only to the text of cl 55.1.1, but also to a number of other matters: first, the other provisions made by cl 55; secondly, the text and operation of the Agreement both as a whole and by reference to other particular provisions made by it; and, thirdly, the legislative background against which the Agreement was made and in which it was to operate. 10

[23] In Amcor Kirby J said:

However, certified agreements such as this commonly lack the precise drafting of legislation. As appears from a scrutiny of the provisions of the Agreement, it bears the common hallmarks of colloquial language and a measure of imprecision. Doubtless this is a result of the background of the drafters, the circumstances and possibly the urging of the preparation, the process of negotiation and the omission to hammer out every detail - including possibly because such an endeavour would endanger the accord necessary to consensus and certification by the Commission.

. . .

The nature of the document, the manner of its expression, the context in which it operated and the industrial purpose it served combine to suggest that the construction to be given to cl 55.1.1 should not be a strict one but one that contributes to a sensible industrial outcome such as should be attributed to the parties who negotiated and executed the Agreement. Approaching the interpretation of the clause in that way accords with the proper way, adopted by this Court, of interpreting industrial instruments and especially certified agreements. I agree with the following passage in the reasons of Madgwick J in Kucks v CSR Ltd, where his Honour observed:

‘It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. ....’ 11

[24] In Amcor Callinan J also supported the observations of Madgwick J in Kucks stating:

An industrial agreement has a number of purposes, to settle disputes, to anticipate and make provision for the resolution of future disputes, to ensure fair and just treatment of both employer and employees, and generally to promote harmony in the workplace. It is with the third of these that cl 55 of the Agreement is particularly concerned. It is important to keep in mind therefore the desirability of a construction, if it is reasonably available, that will operate fairly towards both parties. 12

[25] In City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union 13 (City of Wanneroo) French J, as he then was, observed:

The construction of an award, like that of a statute, begins with a consideration of the ordinary meaning of its words. As with the task of statutory construction regard must be paid to the context and purpose of the provision or expression being construed. Context may appear from the text of the instrument taken as a whole, its arrangement and the place in it of the provision under construction. It is not confined to the words of the relevant Act or instrument surrounding the expression to be construed. It may extend to ‘...the entire document of which it is a part or to other documents with which there is an association’. It may also include ‘....ideas that gave rise to an expression in a document from which it has been taken’ - Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at 518 (Burchett J); Australian Municipal, Clerical and Services union v Treasurer of the Commonwealth of Australia (1998) 80 IR 345 (Marshall J). 14

[26] While the decisions in City of Wanneroo and Kucks dealt with the interpretation of an award, the same principles have been held to apply to the interpretation of enterprise agreements. 15

[27] The fact that the instrument being construed is an enterprise agreement is itself an important contextual consideration. As French J observed in City ofWanneroo:

It is of course necessary, in the construction of an award, to remember, as a contextual consideration, that it is an award under consideration. Its words must not be interpreted in a vacuum divorced from industrial realities - City of Wanneroo v Holmes (1989) 30 IR 362 at 378-379 and cases there cited. There is a long tradition of generous construction over a strictly literal approach where industrial awards are concerned - see eg GeoA Bond and Co. Ltd (in liq) v McKenzie [1929] AR (NSW) 498 at 503-504 (Street J). It may be that this means no more than that courts and tribunals will not make too much of infelicitous expression in the drafting of an award nor be astute to discern absurdity or illogicality or apparent inconsistencies. But while fractured and illogical prose may be met by a generous and liberal approach to construction, I repeat what I said in City of Wanneroo v Holmes (at 380):

‘Awards, whether made by consent or otherwise, should make sense according to the basic conventions of the English language. They bind the parties on pain of pecuniary penalties.’ 16

[28] My understanding of these authorities is that the interpretation of an industrial agreement begins with a consideration of the natural and ordinary meaning of the words in question. The words are to be read as a whole and in context, ambiguity and uncertainty if any, may be resolved by a consideration of the history and subject matter of the agreement.

Conclusion

[29] In correspondence to the SDA on 3 September 2013 17, Master Grocers Australia refers to the Agreement as being riddled with ambiguities and suffering from an overall lack of clarity. In respect of Part 5 - Public Holidays of the Agreement I readily accept that it is no simple task to ascertain the exact entitlements provided.

[30] Part 5of the Agreement Public Holidays contains the following sub-clauses:

5.1 Public Holidays

5.2 Public Holiday Payment and General Matters

5.3 Public Holiday Replacement Day Principles for Permanent Team Members

5.4 Substituted Public Holidays

[31] In my view, it is necessary to read and have regard to Part 5 - Public Holidays in its entirety in interpreting its various sub-clauses. Such is partly expressed at 5.1 where it states “Subject to the provisions of Part 5 of this Enterprise Agreement” and at 5.2(b) which states “Subject to the provisions of this Part of the Enterprise Agreement”.

[32] Sub-clause 5.1 purports to prescribe public holidays under the Agreement but also refers to the compensation payable for certain public holidays:

5.1(i) General Public Holidays lists 10 days as general public holidays.

5.1(ii) State and Territory Public Holidays lists a number of other specified days in the various states and territories as public holidays. 18

5.1(iii) Additional State and Territory Public Holidays without listing any days, states the compensation payable to Permanent Team Members for additional State and Territory public holidaysproclaimed or gazetted. 19

5.1(iv) Additional Local Public Holidays without listing any days outlines the compensation payable to Permanent Team Members for any additional Public Holiday(s) proclaimed or gazetted in a locality.

[33] Sub-clause 5.3(b) of the Agreement provides a benefit to permanent employees and eligible part time employees whose non-working day falls on a Public Holiday.

[34] The dispute between the parties arises from the proclamation of the Public Holidays Act 2010 (NSW) effective from 31 December 2010. The Public Holidays Act 2010 (NSW) declares Easter Sunday a public holiday. There is no disagreement that Easter Sunday 2013, was a public holiday for the purposes of the Agreement.

[35] I accept the Respondent’s submissions that when the Agreement was negotiated in 2008, Easter Sunday was not a declared public holiday in New South Wales and therefore was not specifically referred to in the Agreement.

[36] The Respondent’s position is akin to that provided for at Schedule 3 Part 3 at 10(a) of the Transitional Act where on application the Commission may vary an agreement to remove an ambiguity or uncertainty. While no application has been made on this basis, it is said by the Respondent that sub-clause 5.3 is ambiguous and uncertain. However, I am unable to accept that there exists any uncertainly or ambiguity in the Agreement arising from the proclamation of the Public Holidays Act 2010 (NSW), taking into account Part 5 - Public Holidays of the Agreement in its entirety.

[37] Sub-clause 5.3(b) provides that where a public holiday falls on a full time employee’s non-working day, permanent team members will receive another day off to be taken under certain listed circumstances. No ambiguity or uncertainty is apparent from the wording of sub-clause 5.3(b) and the Respondent did not direct my attention to any ambiguity or uncertainty in the actual terminology. Rather the argument is that since the proclamation of the Public Holidays Act 2010 (NSW) the wording no longer accords with the intention of the Agreement.

[38] The reason being is that in sub-clause 5.3 the benefit of receiving another day off is not applied where Easter Saturday and Anzac Day fall on a Saturday or Sunday and a substitute day is not proclaimed. The Respondent says this exclusion should now apply to Easter Sunday as it would have, had Easter Sunday been a public holiday at the time of making the Agreement.

[39] The Commission is without the benefit of what was in the mind of the previous employer Franklins Pty Ltd, other than in 2012, it advised its Managers that full time team members whose non-working day falls on Easter Sunday shall be entitled to a replacement day. While past practice is not critical to the interpretation of an enterprise agreement it does tend to indicate whether there was any uncertainty in applying the terms of the Agreement.

[40] The Respondent’s argument is a merit based one, being that employees have received a windfall gain as a result of the proclamation of the Public Holidays Act 2010 (NSW), an argument not without force. While this appears to be the case, it cannot be remedied by an argument based on ambiguity or uncertainty when none exists.

[41] The words of sub-clause 5.3 can be given their plain and natural meaning without producing an absurd result.

[42] The Respondent advises that it is currently negotiating a replacement agreement in which this dispute is being addressed.

[43] While the Commission may reasonably strain for a meaning that avoids injustice, there is no ability to read into sub-clause 5.3(b) nonexistent words. It may have been Franklin’s Pty Ltd intent that should Easter Sunday ever become a public holiday for the purposes of the Agreement it would be treated the same as Easter Saturday and Anzac Day but the agreed and Commission approved Agreement does not reflect this position. The Commission is unable under the guise of interpretation; alter the plain and unambiguous meaning of the Agreement by reading the sub-clause to include Easter Sunday (see Fisher v Bell 20). Nor is the Commission able to attempt to apply what might otherwise be fair and just, contrary to what is reduced to writing in an agreement.21

[44] The Full Bench in CJ Manfield Pty Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia 22stated that the employer bears a responsibility to ensure that its agreement reflects its intentions:

[53]... An employer who wishes to propose an agreement to its employees has a responsibility to ensure that the agreement reflects its intentions. If it proposes an agreement which contains a mistake of one type or another then we think it must take responsibility for that situation. We do not believe that the employer can subsequently say that the document it distributed to employees and requested its employees to approve is not something it agreed to. By its very actions it was.

(My emphasis)

[45] Applying the principles of interpretation and deciding what an existing agreement clause means is a different role from determining what the entitlement should be in the first instance as occurred in the Public Holidays Test Case.

[46] In resolving this dispute the Commission should apply the ordinary and usual meaning attributed to the words used (see The Australian Workers’ Union - Victoria Branch v Fosterville Gold Mine Pty Ltd 23) unless ambiguity or other language of the enterprise agreement suggests another meaning.

[47] The dispute is determined by accepting the interpretation of the SDA that sub-clause 5.3(b) of the Agreement requires the Respondent to apply its provisions without treating Easter Sunday as if it was also a reference to Easter Saturday and Anzac Day. This conclusion is not an endorsement of the benefit received by eligible employees, the merits of which are appropriately being dealt with, in the negotiations for a replacement agreement.

COMMISSIONER

Appearances:

M Worsley for the Shop, Distributive and Allied Employees’ Association

G Raptis forArora Markets Pty Ltd

Hearing details:

2014.

Sydney:

14 April

 1   AG842237.

 2   Exhibit A2, witness statement of Robert Tonkli, Attachment A.

 3   Exhibit R1, Respondent’s Outline of Submissions.

 4   Exhibit R1, Respondent’s Outline of Submissions at 25.

 5   Exhibit R1, Respondent’s Outline of Submissions at 26.

 6   The State Public Services Federation v Clerk of the Legislative Assembly and another Print L9178 (20 March 1995).

 7 (1996) 66 IR 182.

 8   Ibid at 184.

 9 (2005) 222 CLR 241.

 10   Ibid at 253 per Gummow, Hayne and Heydon JJ.

 11   Ibid at 270-271 per Kirby J.

 12   Ibid at 283.

 13 [2006] 153 IR 426.

 14   Ibid at 438-439.

 15   See Swire Cold Storage Pty Ltd v Transport Workers’ Union of Australia (2008) AIRCFB 397 at 29 and “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union v Silcar Pty Ltd [2011] FWAFB 2555 at 11.

 16 [2006] 153 IR 426 at 440.

 17   Originating application, Attachment C.

 18   Easter Sunday is not a named public holiday in sub clause 5.1(i) or (ii) of the Agreement.

 19 Section 4(e) of the Public Holidays Act 2010 (NSW) declared Easter Sunday a public holiday in 2013.

 20 [1961] 1 QB 394 Lord Parker CJ at 399 quoting Lord Simonds.

 21   Kucks v CSR Limited [1996] 66 IR 182,Madgwick J at 184.

 22   [2012] FWAFB 3534.

 23   [2011] FWAFB 2386.

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<Price code C, AG842237  PR549815>