Short v CBI Constructors Pty Ltd
[2017] FCCA 2442
•2 November 2017
FEDERAL CIRCUIT COURT OF AUSTRALIA
| SHORT v CBI CONSTRUCTORS PTY LTD | [2017] FCCA 2442 |
| Catchwords: INDUSTRIAL LAW – Contract of employment – notice of termination – whether notice of termination can run concurrently with Rest and Recreation Leave – deprivation of entitlement to leave – application dismissed. |
| Legislation: Fair Work Act 2009, ss.61, 117, div.11 of pt.2-2 Other material cited: |
| Cases cited: Kentz (Australia) Pty Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing & Allied Services Union of Australia [2016] FWCFB 2019 Kucks v CSR Ltd (1996) 66 IR 182 |
| Applicant: | DARYL ROBERT SHORT |
| Respondent: | CBI CONSTRUCTORS PTY LTD |
| File Number: | PEG 237 of 2016 |
| Judgment of: | Judge Smith |
| Hearing date: | 10 August 2017 |
| Date of Last Submission: | 10 August 2017 |
| Delivered at: | Sydney and Perth by video link |
| Delivered on: | 2 November 2017 |
REPRESENTATION
| Counsel for the Applicant: | Mr R Reitano |
| Solicitors for the Applicant: | Construction, Forestry, Mining & Energy Union |
| Counsel for the Respondent: | Ms H Millar |
| Solicitors for the Respondent: | K & L Gates |
ORDERS
The application be dismissed.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PERTH |
PEG 237 of 2016
| DARYL ROBERT SHORT |
Applicant
And
| CBI CONSTRUCTORS PTY LTD |
Respondent
REASONS FOR JUDGMENT
The applicant worked for the respondent on the Gorgon Project on Barrow Island from February 2013 to December 2015. He was employed subject to the terms of the CBI Constructors Pty Ltd – Gorgon Project – Barrow Island Enterprise Agreement 2015 (Agreement). As at 30 December 2015 the applicant had worked 23 days on site and, for that reason, was entitled to 10 days rest and recreation leave (R&R leave) pursuant to the terms of the Agreement.
On 30 December 2015, the applicant’s employment was terminated by the respondent and he was paid in lieu of notice. The issue for determination is whether the notice period to which the applicant was entitled could run concurrently with the 10 days R&R leave under the Agreement.
The applicant argues that the notice period cannot run concurrently with R&R leave because otherwise the applicant would be deprived of his entitlement to leave. The respondent argued that the period of R&R leave was part of the entire work cycle of the applicant, and the applicant lost no entitlement by reason of the R&R leave period being included in the period of notice.
For the reasons that follow, the notice period required to be given to the applicant was able to run concurrently with the period of R&R leave and the application will be dismissed.
Relevant background
The applicant was employed by the respondent as a mobile crane operator, operating mobile cranes with the lifting capacity in excess of 180 tonnes and up to and including 262 tonnes. He was employed on site at the Gorgon project, a liquefied natural gas project operated by Chevron on Barrow Island in the Pilbara region of Western Australia.
He commenced employment on 5 February 2013. His terms and conditions of employment were governed by the Agreement. In addition, the National Employment Standards (NES) applied to the applicant’s employment by operation of s.61 of the Fair Work Act 2009 (Cth) (Act). The NES are contained in pt.2-2 of the Act. Section 117 of the Act is found in div.11 of pt.2-2 and deals with notice of termination or payment in lieu of notice.
Section 117 relevantly provides:
…
Amount of notice or payment in lieu of notice
(2)The employer must not terminate the employee’s employment unless:
(a)the time between giving the notice and the day of the termination is at least the period (the minimum period of notice) worked out under subsection (3); or
(b) the employer has paid to the employee (or to another person on the employee’s behalf) payment in lieu of notice of at least the amount the employer would have been liable to pay to the employee (or to another person on the employee’s behalf) at the full rate of pay for the hours the employee would have worked had the employment continued until the end of the minimum period of notice.
(3)Work out the minimum period of notice as follows:
(a)first, work out the period using the following table:
Period
Employee’s period of continuous service with the employer at the end of the day the notice is given
Period
…
…
…
2
More than 1 year but not more than 3 years
2 weeks
…
…
…
(b)then increase the period by 1 week if the employee is over 45 years old…
(Emphasis in original and added)
It will be necessary to consider in due course a number of the provisions of the Agreement. For present purposes, it is sufficient to note two matters about the Agreement. First, cl.19 contained a notice upon termination provision which was similar in effect to s.117 of the Act. Secondly, pursuant to cl.31.2 of the Agreement, the applicant was entitled to 10 days R&R leave after completion of each 23 days on site. He was entitled in respect of that period to 7.2 hours pay at his ordinary rate, including any all-purpose allowance during each 10 day R&R period and the remainder of the period was unpaid leave.
The applicant completed 23 days on site between 8 December 2015 and 30 December 2015. On 30 December 2015, the applicant was given notice of termination of employment. He was not 45 years old at that time and had worked more than one year but not more than three years. In those circumstances, the applicant was entitled to 2 weeks’ notice of termination or payment in lieu thereof.
In lieu of notice, the applicant was paid the following on termination:
a)7.2 hours pay at his ordinary rate including any all-purpose allowance;
b)no pay for the remainder of the 10 day R&R leave period; and
c)four days paid at the rate the applicant would have been paid had he worked four days on site at the Project.
It was not in dispute that, if notice of termination could run concurrently with the period of R&R to which the applicant was entitled, he was paid the amount owing to him. Conversely, if the period of notice could not run concurrently with the R&R period, the notice ought to have commenced on 10 January 2016 and finished on 23 January 2016, or the applicant was entitled to 2 weeks’ pay in lieu of that notice.
The parties’ arguments
Applicant’s argument
The applicant emphasised that the purpose of a notice period was to enable an employee to adjust to the change in circumstances and seek alternative employment. Obviously, he argued, the ability to adjust and re-organise was, to a large degree dependent on a continuing income for the notice period.
The applicant’s argument as to whether the period of notice could be concurrent with R&R leave involved two steps: first, he sought to establish that, under the Agreement, R&R leave was an entitlement. Secondly, he relied upon a line of authority which, he argued, established that if an employee has an entitlement to be absent from work, then an absence pursuant to that entitlement, cannot be used to offset another entitlement.
The majority of the first step in the applicant’s argument concerned cl.31 of the Agreement. It is convenient for that reason, in spite of the length of that clause, to set out the majority of cl.31:
Rest and Recreation Leave
31.1Subject to clause 31.2, Employees shall be entitled to 9 days rest and recreation leave (R&R) after the completion of 26 days on Site.
31.2As soon as practicable after this Agreement has been made, Employees shall transition to a work cycle with entitlement to 10 days rest and recreation leave (R&R) after completion of 23 days on Site. The Company will use its best endeavours to complete this over 2 work cycles so far as is practicable having regard to the requirement for skills and employee numbers. The process will be subject to consultation with Employees and their representatives.
31.3Travel Arrangements on R&R
(a)The Company will provide an economy airfare ticket to the major regional airport closest to the Employee’s usual place of residence (or to another mutually agreed place) and return to site, provided the actual cost to the Company including where applicable FBT liability does not exceed the cost of an economy airfare available to the Company from the Project to the closest major regional airport.
(b)If due to flight schedules it is impracticable to return an employee to a Major Regional Airport in Western Australia the Employee may elect to receive the following relevant additional payment in lieu of the air travel:
If an Employees [sic] usual place of residence is Bunbury, Collie, Busselton, Albany, Kalgoorlie, Experance or Geraldton (including surrounding locations) and they are flown to Perth by the company at the commencement of their R&R Leave, they will be paid an allowance for the round trip from and to Perth Airport as follows:
…
Employees residing in other surrounding locations will be paid the allowance applicable to the regional centre which is closest in radial distance to their usual place of residence.
(c)The R&R leave shall be taken as soon as practicable after it becomes due as agreed between the Company and Employee. The Company and Employee shall not unreasonably delay an Employee’s R&R leave and in no circumstance shall the R&R leave be postponed for a period exceeding two (2) weeks after it becomes due.
(d)To ensure a proper period of recuperation, an Employee shall have a period off site on R&R leave for the number of days specified in clauses 31.1 and 31.2, provided however the Employee must return to site on the final day of leave.
(e)The Company will continue to give due consideration to Employees currently engaged on nightshift, distances to be travelled and travel durations when booking R&R travel, and will give these Employees preference as far as the Company is able to, and having regard to flight availability and Company allocated seating, when selecting flights in order that they can return to their usual place of residence at a reasonable time.
31.4Payment of R&R
Payment on R&R leave will be as follows:
(a)First R&R:
(i)a maximum of 14.4 R&R hours per cycle paid at the Employee’s ordinary hourly rate including any all-purpose allowance;
(ii)accrued rostered days off, Gorgon Special Leave (GSL) or annual leave may be taken concurrent with R&R leave (provided this does not extend the R&R period);
(iii)any public holiday falling on an Employee’s R&R shall be paid as if it were a public holiday (provided this does not extend the R&R period); and
(iv)any additional time off is unpaid leave.
(b)Subsequent R&R’s:
(i)7.2 R&R hours paid at the Employee’s ordinary rate including any all-purpose allowance;
(ii)accrued rostered days off, GSL or annual leave may be taken concurrent with R&R leave (provided this does not extend the R&R period);
(iii)any public holiday falling on an Employee’s R&R shall be paid as if it were a public holiday (provided this does not extend the R&R period); and
(iv)any additional time off is unpaid leave.
(c)Subject to subparagraphs (a) and (b) above there shall be no payment for travelling time or other costs that may be incurred when an Employee is on R&R including departing from the site to the Employee’s point of hire and returns to the site after a period of R&R.
31.5Time off on R&R does not count towards service for determining the next R&R cycle.
31.6Employees who qualify for the provisions of this sub-clause may return to their home or any other place mutually agreed between the Company and the Employee at Christmas, provided the cost to the Company, including where applicable FBT liability, does not exceed the cost of the return airfare provided under subclause 31.3(a):
(a)by taking the entitlement to R&R after the completion of the accrual period; or
(b)by taking R&R in advance but, if by service subsequent to the taking of R&R an entitlement to that R&R does not accrue, any payment of ordinary pay for that period of R&R and the cost of airfares shall be refunded to the Company unless the services of the Employee are terminated by the employer through no fault of that Employee. For the purposes of this provision, the Company may deduct any amount to be refunded from any monies otherwise due to the Employee under their contract of employment.
31.7An Employee who does not return from R&R on the due date, will (subject to the Company making reasonable enquiries) be deemed to have abandoned their employment unless satisfactory notification (within forty eight (48) hours of due date of return) is given to the Company, as to the reason why the Employee did not return to work at the scheduled time.
31.8The Company will confirm abandonment of employment by registered mail to the Employee’s last known address within five (5) days of the due date not being met.
(Emphasis in original)
The applicant made 10 points about these provisions. First, they concern “leave”.
Secondly, the words “entitled” in cl.31.1 and “entitlement” in cl.31.2 revealed that the clause deals with an entitlement.
Thirdly, the leave must be taken and in no circumstances must be postponed by more than two weeks: cl.31.3(c). In other words, it is a mandatory obligation.
Fourthly, the leave must be taken off site: cl.31.3(d). Fifthly, the leave is paid leave: cl.31.4.
Sixthly, the leave can be taken concurrently with other leave, including annual leave and accrued rostered days off. This indicates that the people who wrote the agreement applied their mind specifically to the question of concurrent entitlements and one thing that was not included was the concurrence of the period of notice of termination.
Seventhly, any time taken off outside the 10 day period of R&R leave that is not also paid leave for another reason, is described as “unpaid leave”: sub-cl.31.4(b)(iv). Eighthly, in common with other types of leave, R&R leave may be taken in advance: cl.31.6.
Ninthly, cl.31 is located in pt.5 of the Agreement which relates to distant workers. Tenthly, the purpose of the leave is to ensure a proper period of recuperation: cl.31.3(d).
The combination of these points was said to lead to the conclusion that R&R leave is an entitlement and to be treated much the same way as annual leave and maternity leave insofar as the period of notice on termination is concerned.
The second part of the applicant’s argument commenced with an analysis of the work cycle set up under the Agreement. Although this part of the applicant’s argument was largely responsive to the respondent’s arguments, and in particular its reliance upon the decision of the Fair Work Commission in Kentz (Australia) Pty Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing & Allied Services Union of Australia [2016] FWCFB 2019 (Kentz), it is convenient to record the argument here.
The applicant’s first point is that the work cycle is not defined by the Agreement but, is something which is determined by the Company. Clause 21 relevantly provides:
(a)The ordinary hours of work will be 36 per week averaged over a defined work cycle and except in the case of shift workers shall be worked between the hours of 6.00am and 6.00pm Monday to Friday inclusive.
(b)The Company will determine the work cycle. Where the Company wishes to alter the work cycle it may do so by agreement with the majority of Employees affected by the change. Where no agreement is reached the Company will provide 1 week’s notice of the changed work cycle.
Secondly, cl.15.3 deals with accommodation change and provides:
15.3Accommodation Change
If an Employee is required to change from one accommodation facility to another accommodation facility during their work cycle and this occurs outside of paid working time then they shall be entitled to one (1) hour’s pay at the appropriate ordinary rate of pay.
(Emphasis in original)
The applicant argued that, as an employee must be off-site during the R&R leave, he or she cannot be expected to change accommodation during that period. Accordingly, the reference to “work cycle” in cl.15.3 must exclude the period of R&R leave and so that leave does not form part of the work cycle.
Thirdly, the work cycle referred to in clauses such as cl.15.3 referred to the concept of paid working hours and unpaid hours on site. This was said to be supported by other provisions such as cl.22 relating to rostered days off. That clause relevantly provides:
22Rostered Days Off
22.1Employees, including those on shift work, will accrue 2 rostered days off (RDOs) over a four week work cycle. This will be done by each Employee working ordinary hours as follows:
(a)Working 8 hours each day (Monday to Friday);
(b)Paid 7.2 ordinary hours at the Employees all-purpose rate. Any non-all-purpose allowance will be paid for the actual ordinary hours worked; and
(c)Accruing 0.8 of an hour on each of those days towards a rostered day off ‘RDO’.
Note: Where an Employee does not work eight (8) ordinary hours on their R&R departure date due to flight schedules the RDO accrual entitlement will not be reduced.
22.2Accrued RDOs may be taken at an Employee’s option concurrently with R&R leave or accrued until the completion of the Employee’s employment on the Project and paid out.
22.3Provided any RDOs taken in conjunction with R&R leave shall not extend the period of R&R beyond the number of days off site in clauses 31.1 and 31.2.
…
(Emphasis in original)
The applicant also relied upon cll.24.1 and 25.3 which provide:
24Overtime
24.1Working of Overtime
(a)Employees (other than those under the age of 18 years) will be required to work reasonable overtime.
…
25Shift Work
…
25.3Ordinary hours of work for a Shift Worker will average 36 hours per week over a defined work cycle, not exceeding 8 consecutive ordinary/hours.
…
(Emphasis in original)
The clearest expression of what a work cycle was under the Agreement was said to be found in cl.33.2 which deals with Gorgon Special Leave (GSL) and provides:
…
33.2Where an Employee qualifies for GSL at the end of their work cycle of 26 days on site, they shall accrue 34 hours GSL.
Subject to clause 31.2 where an Employee qualifies for GSL at the end of their work cycle of 23 days on site, they shall accrue 30.10 hours GSL.
…
In that context, the applicant argued that the reference to work cycle in cl.31.2 should not be understood to be a reference to a 33 day period constituted by 23 days on site and 10 days of R&R leave.
The second part of this aspect of the applicant’s argument concerned the authorities dealing with the issue of notice given during a period of absence from work. Principal reliance was placed, by the applicant, upon the decision of this Court in Liquor Hospitality & Miscellaneous Union v Cuddles Management Pty Ltd (2009) 183 IR 89; [2009] FMCA 463 (Cuddles).
In Cuddles, Lucev FM (as his Honour then was) found that the respondent had dismissed an employee at a time on which she was on maternity leave. The employee was entitled to 4 weeks’ notice under her contract of employment. The issue was whether that notice could run concurrently with the period of maternity leave. His Honour concluded that it could not. Lucev FM relevantly stated:
[116]An employer cannot give notice of termination of employment to an employee on approved leave, or, at least, the notice cannot run concurrently with the approved leave because to do so is to deprive the employee of their right to paid leave. … In the The Chief Secretary v The Hospital Employees Industrial Union of Workers of WA (Coastal Branch) the Court of Arbitration in Western Australia held that a government department cannot give notice of dismissal so as to have any portion of the month prescribed for the notice of dismissal running concurrently with the annual holidays of the employee concerned. In McSharer v Hospital Employees Industrial Union of Workers, WA Burt J held that the right to terminate employment on one weeks notice was subject to an entitlement to leave and therefore an employer cannot give notice which in its terms would terminate employment within a period of annual leave. In AMWSU v Multicon Engineering (WA) Pty Ltd each of the Justices of the Industrial Appeal Court held that notice of termination was not able to run concurrently with a period of annual leave because to do so would be to deny the employee the benefit of the annual leave to the extent of the notice of termination. …
[117]In this case the provisions of the WR Act[1] reinforce the proposition that an employee on approved leave, and specifically maternity leave, cannot have that leave interfered with by a period of notice. In this case, even though the prerequisite period of service for entitlement to maternity leave had not been met by Ms Poppas, Cuddles Management granted her maternity leave. Section 265 of the WR Act relevantly provides that maternity leave is “a single, unbroken period of unpaid leave (ordinary maternity leave)”. Section 279(1) of the WR Act entitles an employee to terminate employment during maternity leave “subject to any notice required to be given by the employee”. There is no co-related right given to an employer to terminate an employee’s service during maternity leave. Section 280 of the WR Act guarantees an employee who has taken maternity leave the right to return to the position held immediately before the start of the maternity related leave period. In the Court’s view those provisions make it clear that an employer is not entitled to terminate an employee’s service whilst the employee is on maternity leave. Furthermore, and in any event, to do so would entitle an employer to give notice during a period during which the employee is not being paid. If notice were to run during this period the employee’s entitlement to paid notice period, or pay in lieu of notice, would be vitiated. Having regard to the provisions of ss.265, 279 and 280 of the WR Act the Court’s view is that that cannot have been the intention of the Parliament. Furthermore, it is contrary to the law as established in the Chief Secretary, McScharer and Multicom Engineering.
(Citations omitted)
[1] Workplace Relations Act 1996 (Cth).
The applicant noted that the decision of the Queensland Court of Appeal in Macauslane v Fisher & Paykel Finance Pty Ltd [2002] QCA 282; [2003] 1 Qd R 503 was inconsistent with Cuddles, however, argued that it was distinguishable from the facts of this case. He also argued that the decision in Kentz was distinguishable and noted that the Full Bench in that case said:
[119]We note that this decision is made in relation to the specific terms and context of the Kentz Agreement and has no necessary application to other agreements. Any determination of the interaction of notice and R&R would need to be determined in respect of other agreements in accordance with their terms and context.
Respondent’s argument
The respondent argued that, in practical terms, employees on the Project were working a 33 day work cycle: 23 days on site and 10 days R&R leave off site. The work component of that work cycle was compressed into this 23 days and the non-work time was substantially compressed into 10 days R&R leave when employees were at home. It argued that this was analogous to the weekend for the weekday workforce.
Further, the respondent argued that the R&R leave entitlement created by the Agreement was idiosyncratic and had no statutory equivalent. For that reason, the authorities relied upon by the applicant concerning annual leave and maternity leave work inapposite.
Consideration
The resolution of the issue in these proceedings must be arrived at by considering the operation of s.117 of the Act in the context of the Agreement.
The authorities relied upon by the applicant do not support a universal proposition that notice of termination cannot be given concurrently with any period of leave.
In McSharer v Hospital Employees Industrial Union of Workers, WA (1974) 54 WAIG 1545, Burt J found that the effect of the annual leave provisions in the relevant Award was that the contract of service continued throughout the period of five weeks leave. His Honour held that the right to terminate the employment on one week’s notice should be read subject to that and, for that reason, the employer could not give notice which, in its terms, would terminate the employment within the period of annual leave. His Honour did not decide whether notice could have been given which expired at the end of the leave period, and his decision was entirely based upon a construction of the Award.
The decision in Cuddles turned upon a construction of the relevant provisions of the Workplace Relations Act 2006 (Cth) (WR Act). In particular, Lucev FM found that the right of a person on maternity leave to return to the position held immediately before the start of that leave, made it clear that employment could not be terminated during the term of the leave. His Honour found that it could not have been the intention of the Parliament for notice to be given during a period which the employee was not being paid, because the right to a paid notice period or pay in lieu of notice, would be vitiated. Counsel for the applicant could not identify any provisions in the WR Act which would give rise to a similar construction of s.117 of the Act, but relied upon the terms of the Agreement.
I note that, in the final sentence of [117] of Cuddles, Lucev FM appears to give an alternative bases for his decision, namely that the ability to terminate during maternity leave would be “contrary to the law as established in the Chief Secretary, McSharer and Multicon Engineering.” However, those cases concerned annual leave and, while they undoubtedly supported the approach taken in Cuddles, they did not dictate the outcome.
Section 117 of the Act prohibits an employer from terminating an employee’s employment, unless written notice is given of at least the minimum notice period (in this case 2 weeks), or the employer has paid the employee “at the full rate of pay for the hours the employee would have worked had the employment continued until the end of the minimum period of notice”.
There is nothing in the plain text of s.117 of the Act that prevents the notice period from including a period in which an applicant is not in fact working. Similarly, there is nothing in the apparent purpose of that provision which would require such a construction.
The applicant relied upon the following statement in the Explanatory Memorandum circulated with the Fair Work Bill 2008 to establish the intention of the provision:
[466] The intention of paragraph 117(2)(b) is to impose on an employer that makes the payment in lieu of notice, an obligation to pay either to (or for the benefit of or on behalf of) the employee, everything which the employee would have been entitled to receive had the employee worked out the required period of notice. …
That paragraph adds nothing to the resolution of the issue before the Court but, rather, states the obvious meaning of sub-s.117(2)(b) of the Act. Nor, with respect, does the assertion that the purpose of the requirement for notice, is to enable an employee to adjust to the change in circumstances and seek alternative employment. Where payment is not made in lieu of notice the employee must, if he or she wishes to be paid, continue to work. It is not clear how a person who is not working during the notice period would be disadvantaged by that fact. The applicant’s argument that the purpose of the R&R leave was for recuperation, is relevant to this issue and I will return to it in due course.
On that construction of s.117 of the Act, the requirements of that provision are not subject to any consideration concerning the period of R&R leave. However, the Agreement also contains a provision for notice and the issue must be determined by reference to it. Clause 19 relevantly provides:
19.1Notice by the Company
The Company will provide notice of termination of employment (or payment in lieu of such notice) to all Employees except for casual Employees as follows:
Period of Continuous Service
Period of Notice
…
…
1 year and up to the completion of 3 years
2 weeks
…
…
(Emphasis in original)
There are some differences between this provision and s.117 of the Act. Clause 19 is not expressed as a prohibition and the reference to payment in lieu of notice is sparse. Nevertheless, I accept the applicant’s submission that it is, in effect, the same as s.117 of the Act. That said, there is nothing in cl.19 which requires it to be construed so that any notice given cannot include the period of any R&R leave to which an employee is entitled under cl.31 of the Agreement.
Clause 31 is, as the applicant noted, found in pt.5 of the Agreement which relates to distant work provisions. That is to be contrasted with pt.6 which deals with leave provisions including public holidays, Gorgon Special Leave, annual leave, personal leave, compassionate leave, parental leave, jury service and long service leave. It is not clear what point the applicant derived from the location of cl.31 in the Agreement; however, it emphasises the fact that the context of the Agreement is that the work is to be undertaken on Barrow Island, an island 50 kilometres north-west of the Pilbara coast of Western Australia. The other clauses in pt.5 of the Agreement include provisions relating to mobilisation and demobilisation, fares for travel and accommodation.
The second point about R&R leave under cl.31 is that entitlement to it is expressed in terms of one work cycle consisting of 10 days R&R leave after the completion of 23 days on site. The applicant points to a number of other clauses in which the term work cycle is used, in particular cl.21(b), which states that the company is to determine the work cycle. Ordinarily, the same word or phrase used within the document will be given the same meaning. However, that is not possible in this case.
It is to be recalled that a document such as the Agreement must be construed with a practical bent in order to give effect to its evident purposes: Kucks v CSR Ltd (1996) 66 IR 182 at 184 (Madgwick J). Here, with that approach in mind, the work cycle referred to in cl.21 is not meant to be a defined term, but rather deals with the allocation of hours worked to employees. Clause 21 deals with hours of work and is located in a part which otherwise deals with rostered days off, rest periods, meal breaks over time, shift work and local work provisions. In other words, it deals with the organisation of employees within the time frame during which they are actually working.
Clause 31.2, read in its context, provides for a roster of four weeks on, one week off. In essence, it compresses the period of work into the 23 day period and the non-work period into the 10 days R&R leave. As was the case in Kentz, this arrangement is of significant practicality and utility given the fly-in fly-out arrangements in the geography of the Project.
That is emphasised by the fact that the R&R leave must be taken (cl.31.3(c)) and must be taken off site (cl.31.3(d)). First, unlike annual leave, R&R leave cannot be postponed and paid out upon termination. Secondly, bearing in mind the requirement to work reasonable overtime (cl.24.1(a)), and the flexibility in the arrangement of the ordinary hours worked (cl.21), the requirement that R&R leave be taken off site can be seen to ensure that, in contrast to the 23 days on site, it is a non-work period.
Clause 31.4 deals with payment for R&R leave. The first matter to note is that, after the first R&R leave period, the amount of pay is for 7.2 hours at the employee’s ordinary rate: sub-cl.31.4(b)(i). That equates to one ordinary working day excluding the period of 0.8 hours which would ordinarily accrue towards a rostered day off: cl.22.1 of the Agreement.
The second matter to note is that certain paid leave (RDO, GSL and annual leave) can be taken concurrently with R&R leave: sub-cl.31.4(b)(ii). This highlights a number of differences between R&R leave and those other types of leave including that it is largely unpaid and must be taken at a certain time and off-site. This makes any comparison to cases dealing with annual and other similar types of leave inapt.
The third matter to note is sub-cl.31.4(b)(iv) which provides that “any additional time off is unpaid leave”. Counsel for the applicant argued that “additional time off” in this subparagraph refers to time outside the 10 day R&R leave. That cannot be right. First, it follows immediately from two subparagraphs dealing with certain types of leave; and secondly, it is in the context of cl.31.3(d) which requires an employee to return to site on the final day of R&R leave. Rather, what this subparagraph means is that, except for the matters referred to in subparagraphs (i) to (iii), R&R leave is unpaid leave. That makes the analogy of this type of leave closer to the weekend for a weekday worker and, again, emphasises the compression of the non-work periods of employment into the 10 day period.
It is true, as the applicant argues, that, like other types of leave, R&R leave can be taken in advance: cl.31.6(b). However, it is important to note that that entitlement is limited to Christmas. The chapeau of cl.31.6 relevantly states:
31.6 Employees who qualify for the provisions of this subclause may return to their home or any other place mutually agreed between the Company and the Employee at Christmas…
(Emphasis added)
This limitation upon the entitlement to take R&R leave in advance again distinguishes it from other types of leave.
I also accept, as submitted by the applicant, that the stated purpose of requiring that the R&R leave be taken off site, is to ensure a proper period of recuperation: cl.31.3(d). However, I do not accept the consequence of that purpose. The applicant argued that this period of recuperation was guaranteed as an entitlement. That entitlement would be denied upon the giving of a notice of termination during the R&R leave period. That would be so because, it was argued, the purpose of the notice was to give the applicant the opportunity to find alternative employment. However, what if the applicant had been given notice upon return to the Project and had been required to work out the period of notice? How could he have looked for other employment in those circumstances?
The real purpose of recuperation is so that, upon any return to work, the employee can properly and safely fulfil his or her function. That is of benefit both to the employer and to the employee. If an employee is not to return to work because his or her work is terminated, then neither the purpose of the recuperation period, nor that of the notice period is undermined.
For the reasons set out above, the following passage in Kentz applies with equal force to the circumstances of the applicant in the context of the Agreement:
[118]Characterised as the block of authorised non-work time which forms an integral part of the work cycles, the entitlement of the relevant employees, had their employment continued over the notice period, was to authorised unpaid non-work time in respect of the R&R period and working of and payment for any work-time within the cycle. Termination with immediate effect, subject to the payment made in lieu, was to the same effect-time off without payment in respect of the R&R periods and payment for the “hours the employee would have worked had the employment continued until the end of the minimum period of notice”, save that the employees were not required to work the work-time hours within the work cycle for which they were entitled to payment. The employees were paid what they were entitled to be paid had they remained in their employment during the notice period. Further, there was no practical inhibition of the opportunity of the employees to respond to changed circumstances, re-organise their lives and seek alternative employment.
In other words, the respondent was entitled to give notice of termination to the applicant concurrently with the period of R&R leave, and the payment which it made in lieu of the period of notice required to be given, was in the amount to which the applicant was entitled.
Conclusion
As a consequence, the applicant is not entitled to the relief sought and the application is to be dismissed.
I certify that the preceding sixty-one (61) paragraphs are a true copy of the reasons for judgment of Judge Smith
Date: 2 November 2017
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