Shop Distributive and Allied Employees' Association v Woolworths Ltd

The Shop Distributive and Allied Employees' Association brought proceedings against Woolworths Ltd, seeking penalties and backpay for a breach of the Certified Agreement in relation to long service leave pay. The applicant argued that the respondent failed to pay the correct rate of pay for the long service leave of an employee, Paul Jamieson, who worked on afternoon shifts. Woolworths Ltd admitted the facts but denied the conclusions drawn by the applicant. The central issue was whether the Certified Agreement required the respondent to include penalties and shift premiums in the calculation of long service leave pay. The applicant contended that the ordinary time rate of pay should include a shift premium of 30%, while the respondent argued that the ordinary time rate of pay was 100% and did not include additional premiums or penalties.

The Court found that the applicant's interpretation of the Certified Agreement was incorrect. The Court held that the ordinary time rate of pay was 100%, and the percentages greater than 100 in the Certified Agreement were for shift premiums and penalties to compensate employees for working outside traditional hours. The Court noted that the inclusion of penalties and shift premiums in the definition of 'ordinary pay' in the Certified Agreement supported this interpretation. The Court concluded that the applicant had not established a breach of the Certified Agreement regarding the rate of pay for Mr Jamieson during his long service leave. Consequently, the Court dismissed the entire application and made no order for costs, as the proceeding was not vexatious or without reasonable cause.

The Court acknowledged an anomaly in the respondent's past practice of paying long service leave, which might have significant financial implications for employees. However, the Court emphasised that the respondent was entitled to insist on its rights under the Certified Agreement. The decision highlighted the importance of interpreting agreements in accordance with their plain meaning and the specific provisions outlined within them. The outcome underscored the necessity for both employers and employees to adhere to the terms of certified agreements and the potential consequences of deviating from established practices.