Shop, Distributive and Allied Employees Association v Prouds Jewellers Pty Ltd
[2020] FWCFB 4864
•16 SEPTEMBER 2020
| [2020] FWCFB 4864 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
Shop, Distributive and Allied Employees Association
v
Prouds Jewellers Pty Ltd
(C2020/4104)
VICE PRESIDENT HATCHER | SYDNEY, 16 SEPTEMBER 2020 |
Appeal against decision [2020] FWCA 2589 of Deputy President Young at Melbourne on 18 May 2020 in matter number AG2019/1633.
[1] The Shop, Distributive and Allied Employees Association (SDA) has lodged an appeal, for which permission is required, against a decision issued by Deputy President Young on 18 May 2020 1 (final decision) in which she approved the Prouds Retail Employees Enterprise Agreement 2019 (Agreement). The SDA contends in its notice of appeal that the Deputy President erred in finding that the Agreement passed the better off overall test (BOOT) requirement for approval contained in s 186(2)(d) of the Fair Work Act 2009 (FW Act) and explicated in s 193 of the FW Act. These errors, it contends, arose from the Deputy President’s misconstruction of certain provisions of the General Retail Industry Award 2010 (Award), the comparator award for the purpose of the BOOT in this case, which are evident in an interlocutory decision concerning disputed BOOT issues which the Deputy President issued on 8 May 2020.2
[2] This appeal was heard on 22 July 2020 by a Full Bench consisting of Vice President Hatcher, Deputy President Asbury and Deputy President Kovacic. At the conclusion of the hearing, the bench reserved its decision. Sadly, on 31 July 2020, Deputy President Kovacic passed away. On 12 August 2020, the President of the Commission, Ross J, reconstituted the bench to consist of Vice President Hatcher, Deputy President Asbury and Deputy President Masson. The parties were informed of this the same day, and advised that Deputy President Masson would read the transcript of the hearing and the submissions and other materials filed by the parties, and would join in the decision-making process of the reconstituted Full Bench on that basis. The parties were given an opportunity to object to this course, but no communication of any objection was received, and accordingly the matter has been determined on the basis described.
[3] The background to this appeal is as follows. Prouds Jewellers Pty Ltd (Prouds) operates a chain of jewellery stores. It engaged in bargaining for an enterprise agreement with its non-managerial retail store staff, of which there are approximately 2,900 in total. The SDA was a bargaining representative of employees in that bargaining. In a voting process conducted over the period 1-5 May 2019, a majority of the relevant employees who cast a valid vote voted in favour of the approval of the Agreement. Prouds lodged an application for approval of the Agreement on 17 May 2019. The SDA lodged a Form F18 statutory declaration in which it stated that it supported the approval of the Agreement on the basis that the Commission determined that it passed the BOOT. In its declaration the SDA stated that it had several concerns regarding the Agreement, which it identified. These included that the Agreement did not contain equivalents to certain rostering provisions contained in clause 28 of the Award.
[4] A number of the issues raised by the SDA were resolved by the provision of undertakings by Prouds. The remaining BOOT issues which were pressed by the SDA were the subject of a hearing before the Deputy President on 31 March 2020. The issues pressed by the SDA concerning clause 28 of the Award were, relevantly, twofold.
[5] The first concerned clause 28.5 of the Award, which provides:
28.5 In retail establishments employing on a regular basis 15 or more employees per week, unless specific agreement exists to the contrary between an employer and an employee, the employee will not be required to work ordinary hours on more than 19 days in each four week cycle.
[6] The SDA contended before the Deputy President that, although there was no evidence that Prouds employed more than 15 employees at any of its stores, in the contingency that this ever occurred, employees would suffer a detriment compared to the Award because they would not be entitled to the benefit of a 19-day month, which included an entitlement to overtime penalty rates if work was performed on the 20th day.
[7] The SDA’s second issue concerned the rostering of casual employees. Clauses 28.10-28.13 of the Award provide:
28.10 Ordinary hours will be worked on not more than five days in each week, provided that if ordinary hours are worked on six days in one week, ordinary hours in the following week will be worked on no more than four days.
28.11 Consecutive days off
(a) Ordinary hours will be worked so as to provide an employee with two consecutive days off each week or three consecutive days off in a two week period.
(b) This requirement will not apply where the employee requests in writing and the employer agrees to other arrangements, which are to be recorded in the time and wages records. It cannot be made a condition of employment that an employee make such a request.
(c) An employee can terminate the agreement by giving four weeks’ notice to the employer.
28.12 Ordinary hours and any reasonable additional hours may not be worked over more than six consecutive days.
28.13 Employees regularly working Sundays
(a) An employee who regularly works Sundays will be rostered so as to have three consecutive days off each four weeks and the consecutive days off will include Saturday and Sunday.
(b) This requirement will not apply where the employee requests in writing and the employer agrees to other arrangements which are to be recorded in the time and wages records. It cannot be made a condition of employment that an employee make such a request.
(c) An employee can terminate the agreement by giving four weeks’ notice to the employer.
[8] The SDA contended that the above provision was to be construed as applicable to casual employees, and the Agreement was detrimental compared to the Award because it did not contain equivalent provisions applicable to casual employees.
[9] In the interim decision, the Deputy President rejected both of these contentions. In relation to clause 28.5, the Deputy President rejected the SDA’s contention on two bases. First, the Deputy President said:
“Firstly, Prouds does not, and has never, employed 15 or more employees per week in a store on a regular basis. The SDA does not contend that Prouds has or does. Prouds says it will never do so. For my part, I find it difficult to conceive of a circumstance where 15 or more employees per week would be required to be regularly employed in a retail establishment such as those operated by Prouds. In assessing the better off overall test, the Commission is required to be satisfied that not only every award covered employee but also every prospective award covered employee would be better off under the Agreement. In making that assessment, however, the Commission is not required to take into consideration purely hypothetical, fanciful or implausible scenarios nor every ‘contingency’.” 3
[10] Second, the Deputy President rejected that there would in any event be a relevant detriment under the Agreement as compared to the Award:
“I do not consider that clause 28.5 has the effect submitted by the SDA. It does not render work on the 20th day of a month overtime. The entitlement to overtime for work on the 20th day arises because ordinary hours have already been worked over the preceding 19 days. As such, the entitlement to overtime arises because work on the 20th day is in excess of ordinary hours. The Agreement provides for overtime to be paid for work in excess of ordinary hours.” 4
[11] In relation to clauses 28.10-28.13, the Deputy President construed these provisions as being inapplicable to casual employees. The Deputy President said (footnotes omitted):
“[37] It is useful to first set out the basis of employment under the GRIA. The GRIA provides for employment as a full-time, part-time or casual employee. Relevantly, a full-time employee is defined to be an employee who is engaged to work an average of 38 hours per week. A casual employee is defined as an employee engaged as such.
[38] Clause 28 is entitled “38 Hour Week Rosters”. Clause 28.1 provides that a full-time employee will be rostered for an average of 38 hours per week and sets out the ways in which those hours may be rostered. The provisions that then follow in clause 28.2 – 28.8 refer to 38 hour weeks and other working arrangements which can only apply to employees working 38 hours per week or an average of 38 hours per week. It is clear that employees that work 38 hours per week or an average of 38 hour per week in the context of the GRIA are full-time employees. I accept as contended by the SDA that the subsequent Consecutive Day Clauses refer to “employee” or “employees”, without limitation. I also accept that “employee” is defined in clause 3 of the GRIA as contended for by the SDA. However, I reject the contention that the Consecutive Day Clauses must therefore be constructed as applying to all employees, including casual employees. “Employee” is used in the clauses which precede the Consecutive Day Clauses. Its first use is in clause 28.3. It is not contended that “employee” as used in those clauses means anything other than a full-time or permanent employee. The construction advanced by the SDA would require that the word “employee” be ascribed different meanings at different points in the clause. The SDA contends that that point is clause 28.10. I find such a construction implausible and the clause to contain nothing which could support such a construction. The clause must be read as a whole. When read as a whole, I consider that clause 28 is intended to apply to employees who are required to work 38 hours per week or an average thereof and puts in place safeguards in relation to how those required hours may be rostered. While casual employees could, potentially, work 38 hours per week they are not employed on that basis. It is inherent in the nature of casual employment that there is no requirement to work 38 hours per week or an average thereof and, as has been noted by the Full Bench, most do not. Indeed, there is no requirement for a casual employee to work any hours at all. A casual employee cannot be required to work excessive days without consecutive days off. In the absence of the roster conditions, a full-time employee could be so required. As such, I do not consider any construction of clause 28 advanced on the disutility of casual employees being required to work excessive days without consecutive days off can be sustained. Accordingly, I do not consider on a plain reading that the Consecutive Day Clauses apply to casual employees.”
[12] The Deputy President went on to consider the historical context of clause 28, which she concluded supported the construction she preferred. The Deputy President referred to the fact that clause 28 has been in the same form since the Award was made, but casual employees under the Award were excluded from any entitlement to overtime penalty rates by clause 29 until this was varied by the Commission upon application by the SDA in 2017. 5 The Deputy President concluded from this that, because the roster conditions of clause 28 operated in conjunction with an entitlement to overtime for work in excess of those conditions, it had to follow that clause 28 was never intended to apply to casual employees and that the circumstances in which it was intended that casual employees would be entitled to overtime were confined to those encompassed by the 2017 variation to clause 29.6
[13] In the interim decision, the Deputy President went on to assess whether the Agreement passed the BOOT. In her analysis, the Deputy President identified the provisions of the Agreement which she considered to be more beneficial than the Award and determined that Prouds’ proposed undertakings addressed the concerns to which they were directed and were capable of acceptance under s 190. 7 The Deputy President then said:
“However, even with the Proposed Undertakings, given the very slim margin by which the Agreement exceeds the wage rates under the GRIA and the, largely, contingent financial benefits provided under the Agreement, on balance, my preliminary view is that in the absence of the Additional Benefits I cannot be satisfied that the Agreement passes the better off overall test. However, I consider both of these concerns may be addressed by way of revised undertaking.” 8
[14] The “Additional Benefits” referred to by the Deputy President that were not contained in the Agreement were the non-adjustment of expense-related allowances and travel time not being included in the calculation of the recall allowance. 9 The Deputy President concluded by stating that Prouds would be given an opportunity to address the identified concerns and provide revised undertakings.
[15] In the Final Decision, the Deputy President noted that Prouds had provided revised undertakings which addressed her concerns about the “Additional Benefits” detriment, and concluded on that basis that the Agreement passed the relevant requirements for approval in ss 186, 187, 188 and 190.
SDA’s appeal grounds and submissions
[16] The SDA’s notice of appeal contained seven grounds of appeal, but essentially contended that the Deputy President erred in concluding that the Agreement passed the BOOT because the Deputy President erred:
(1) in concluding that clause 28.5 of the Award did not render work performed on the 20th day of a month overtime; and
(2) in construing clauses 28.10-28.13 of the Award as being inapplicable to casual employees; and
(3) casual employees would not suffer any disutility arising from having to work excessive days without consecutive days off.
[17] In respect of the first of these contentions, the SDA submitted that because the BOOT requires every existing and prospective award-covered employee to be better off overall under the an agreement, the Deputy President ought to have had regard to the prospect of Prouds employing, on a regular basis, more than 15 employees in a store. The absence of an equivalent to clause 28.5 of the Award in the Agreement meant, it was submitted, that there was “a real class of prospective employees who faced genuine detriment”, because the effect of clause 28.5 was to render as overtime any work performed on the 20th day of the month (and after).
[18] As to the second and third contentions, the SDA submitted that:
• while clause 28.1 of the Award refers expressly to “full-time employees”, clauses 28.3-28.14 refer to “employees” in general;
• “employee” is defined in clause 3 of the Award to mean “a national system employee within the meaning of the Act”, and a “casual employee” is defined by clause 13 of the Award to mean “an employee engaged as such”;
• it follows that where a provision of the Award refers to “employees” without qualification, it follows that the provision applies to all types of employees, and where a provision applies only to full-time employees, or full-time employees and part-time employees, the Award states so explicitly;
• there is an inherent disutility in requiring employees to work without access to proper rest and consecutive days off, and without this safeguard an employee (including a casual employee) could feasibly be required to work endless consecutive days within the scope of his or her ordinary hours and without the benefit of overtime hours;
• clauses 28.10-28.13 also confer a monetary benefit, in that where an employee is required to work on days other than in accordance with those provisions, the hours worked will be in excess of ordinary hours and will be payable as overtime;
• the Deputy President was incorrect in saying that the SDA had acknowledged in other proceedings that clause 28 does not apply to casuals, and in any event any such concession is irrelevant to the proper construction of the Award;
• the Deputy President was also incorrect in stating that employees that work 38 hours per week, or an average of 38 hours per week, are full-time employees, since the Award makes explicit allowance in clause 13.5 and 29.2(c)(i) for casuals to work in excess of 38 hours per week, and the Commission has previously recognised that casual employees in the retail sector are often required to work 38 hours per week or more;
• even before the Award was amended to provide for overtime entitlements for casual employees, clauses 28.10-28.13 operated to protect casual employees from being required to work excessive consecutive days;
• the Deputy President’s conclusion that there is no requirement for casual employees to work 38 or more hours per week was based on a theoretical construct of casual employment and was divorced from the reality that casual employees are frequently required to work rosters, and that their availability to work rostered hours may affect whether there are offered hours at all; and
• the Commission could not be satisfied that casual employees as a distinct class of employees are better off overall under than the Agreement than under the Award, and the Deputy President erred in finding otherwise.
[19] The SDA submitted that permission to appeal should be granted because the proper construction of clause 28 of the Award is a matter of profound importance and general application, the decision appears to be disharmonious with the single-member decision in Betts Group Agreement 2019, 10 and the final decision was attended by sufficient doubt to warrant its reconsideration.
Consideration
[20] We have decided to refuse permission to appeal, for the following reasons. First, the specific contentions raised in the SDA’s appeal concerning clause 28.5 and clauses 28.10-28.13 of the Award and the absence of equivalent provisions in the Agreement are intended to support the overall proposition that the Deputy President erred in finding that the Agreement, with the undertakings she accepted, passed the BOOT. However, the SDA’s appeal submissions did not include any analysis or modelling to demonstrate that, if their arguments concerning the proper construction of these provisions of the Award is accepted, the result must be that the Agreement does not pass the BOOT. It may be accepted that, as the Deputy President observed in the interim decision, that the margin between the wages rates in the Agreement and those in the Award was “slim”, but that did not absolve the SDA of the need, as the appellant, to advance a persuasive argument that some identifiable segment of the workforce covered by the Agreement would not be better off under the Agreement under some plausible working scenario. In the absence of any such submission, there is no basis for us to be satisfied that the determination of the matters raised by the SDA might have any bearing upon the Deputy President’s decision to approve the Agreement.
[21] The approach taken by the SDA in this respect reflects the approach it took in the proceedings before the Deputy President whereby it did not positively contend that the Agreement did or did not pass the BOOT, but rather simply identified particular aspects of the Agreement which it said were detrimental compared to the Award and were therefore relevant to the BOOT assessment. While it was open to take that course at first instance, that is not a course which is likely to attract the grant of permission in appeal proceedings. It seems to us that the main purpose of the appeal from the SDA’s perspective was to seek that a Full Bench express an opinion about the issues of the construction of the Award that it raised before the Deputy President rather than to genuinely challenge the approval of the Agreement. We do not consider that the grant of permission to appeal for that purpose would be appropriate.
[22] Second, the issue raised by the SDA concerning clause 28.5 of the Award goes nowhere because, as the Deputy President found in the interim decision, Prouds does not and never has employed 15 or more persons in a store, and she effectively accepted Prouds’ contention that it would never do so in the future. That meant that clause 28.5 could never have any application to Prouds and its employees such as to give rise to the alleged detriment. The Deputy President’s finding in this respect was not the subject of any serious challenge in the appeal. Indeed, we were advised by Prouds, without contradiction, that it operated 455 stores that were covered by the Agreement. With approximately 2,900 employees, that means that Prouds operates with about 6-7 employees per store on average. In those circumstances, we consider that the scenario of 15 or more employees working in a single store was a fanciful one not requiring consideration for the purpose of the BOOT. 11
[23] Third, the SDA’s contention concerning the alleged detriment arising from the absence of an equivalent to clause 28.5 of the Award in an enterprise agreement, even assuming clause 28.5 is capable of application, has recently been rejected in the Full Bench decision in Shop, Distributive and Allied Employees’ Association v Fantastic Furniture Pty Ltd. 12 We see no proper basis to revisit that decision.
[24] Fourth, the SDA’s contention that any part of clause 28 is applicable to casual employees is weak. The clause is entitled “38 hour week rosters”, and the reference to a “full-time employee” in clause 28.1 is consistent with this title. Both serve to introduce the subject matter of the entire clause, so it is not a case whereby a simple reference to “employee(s)” later in the clause is to be understood as having any wider meaning. But in any event, even if clauses 28.10-28.13 are to be read as having some application to casual employees, it does not follow that a casual employee who is rostered to work “excessive consecutive days” will have an entitlement to be paid overtime penalty rates, as contended by the SDA. Clause 29.2(c) of the Award is prescriptive as to the circumstances in which casual employees are entitled to be paid overtime penalty rates. It provides:
(c) Hours worked by casual employees:
(i) in excess of 38 ordinary hours per week or, where the casual employee works in accordance with a roster, in excess of 38 ordinary hours per week averaged over the course of the roster cycle;
(ii) outside of the span of ordinary hours for each day specified in clause 27.2;
(iii) in excess of 11 hours on one day of the week and in excess of 9 hours on any other day of the week;
shall be paid at 175% of the ordinary hourly rate of pay for the first three hours and 225% of the ordinary hourly rate of pay thereafter (inclusive of the casual loading).
[25] The above provision was added to the Award in 2017, on the application of the SDA, as part of the Full Bench consideration of part-time and casual employment provisions in modern awards in the conduct of the 4 yearly review of modern awards. Prior to the addition of this provision, casual employees had no entitlement to overtime, and the SDA brought its application on that premise. 13 The current clause 29.2 was added on the basis that it would prescribe exhaustively the circumstances in which casual employees would be entitled to overtime.14 The clause plainly has no application in connection with the operation of clauses 29.10-28.13 of the Award, as the Deputy President correctly concluded in the interim decision. Therefore, on no view can there be any relevant monetary detriment. As for any alleged non-monetary detriment, the SDA as earlier stated did not advance any submission as to why this would result in the Agreement not passing the BOOT.
Conclusion
[26] Permission to appeal is refused.
VICE PRESIDENT
Appearances:
Mr W Friend QC on behalf of the appellant.
Mr N Tindley on behalf of the respondent.
Hearing details:
2020.
Sydney (by video-link):
22 July.
Printed by authority of the Commonwealth Government Printer
<PR722678>
1 [2020] FWCA 2589
2 [2020] FWC 2424
3 Ibid at [27]
4 Ibid at [27]
5 [2017] FWCFB 3541, 269 IR 125 at [646], PR598494
6 [2020] FWC 2424 at [44]
7 Ibid at [52]-[53]
8 Ibid at [53]
9 Ibid at [52]
10 [2020] FWC 2016
11 See CFMMEU v Specialist People Pty Ltd[2019] FWCFB 6307 at [36]
12 [2020] FWCFB 3570 at [44]-[48]
13 [2017] FWCFB 3541, 269 IR 125 at [657]-[658], [667]-[676]
14 Ibid at [676]-[678]
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