Target Australia Pty Ltd v Shop, Distributive and Allied Employees' Association

The case of Target Australia Pty Ltd v Shop, Distributive and Allied Employees' Association involved an appeal by Target Australia challenging a decision by the Fair Work Commission that the enterprise agreement it had entered into with the union provided for paid annual leave to include penalties and loadings prescribed for employees working their ordinary hours outside of the span of ordinary hours of the workplace. The union cross-appealed, arguing that the Commission had erred in not including certain shift loadings in the calculation of paid annual leave. The legal issues before the court were the correct interpretation of the phrase "ordinary time earnings" in the enterprise agreement, whether it included penalties and loadings for working outside ordinary hours, and whether past payment practices could inform the interpretation of the agreement.

The court rejected Target's argument that it was unusual for an industrial instrument to provide for a penalty on a penalty and held that the purpose of construing an enterprise agreement was not to search for rationality and consistency with other instruments. The court found that the agreed fact as to Target's past payment practice related to agreements from 2006 and 2009, not 1997 as Target had initially claimed. The court held that past payment practices could be considered but were not determinative of the correct interpretation of the agreement. The court concluded that "ordinary time earnings" for the purpose of calculating payment for annual leave included penalties and loadings prescribed for employees working their ordinary hours outside of the span of ordinary hours of the workplace.

The appeal and cross-appeal were dismissed and there was no order as to costs. The court held that the enterprise agreement did provide for paid annual leave to include penalties and loadings for working outside ordinary hours, and that the Commission's decision was correct. The court also held that the union's cross-appeal was without merit as the shift loadings in question were not prescribed for employees working their ordinary hours outside of the span of ordinary hours of the workplace.