Telstra Corporation Ltd v Todd

[2009] FCA 518

FEDERAL COURT OF AUSTRALIA

Telstra Corporation Ltd v Todd [2009] FCA 518

TELSTRA CORPORATION LTD v FRED TODD

NSD 1913 of 2008

COWDROY J
21 MAY 2009
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1913 of 2008

ON APPEAL FROM THE NSW CHIEF INDUSTRIAL MAGISTRATES COURT

BETWEEN:	TELSTRA CORPORATION LTD Appellant
AND:	FRED TODD Respondent

JUDGE:	COWDROY J
DATE OF ORDER:	21 MAY 2009
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The appeal be allowed.

2.The decision of Chief Industrial Magistrate Hart dated 19 November 2008 be quashed.

3.The order of Chief Industrial Magistrate Hart dated 19 November 2008 be set aside.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

The text of entered orders can be located using eSearch on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1913 of 2008

ON APPEAL FROM THE NSW CHIEF INDUSTRIAL MAGISTRATES COURT

BETWEEN:	TELSTRA CORPORATION LTD Appellant
AND:	FRED TODD Respondent

JUDGE:	COWDROY J
DATE:	21 MAY 2009
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. By Notice of Appeal filed on 10 December 2008 the appellant (‘Telstra’) appeals from the whole of the decision of Chief Industrial Magistrate Hart in respect of his decision delivered on 19 November 2008. An appeal from the decision of that Court to the Federal Court of Australia exists as a right: see s 853 of the Workplace Relations Act 1996 (Cth) (‘the Act’).

   FACTS

2. The respondent (‘Mr Todd’) is employed by Telstra as a telecommunications technician. His employment is governed by the terms of the Telstra Corporation General Conditions Award 2001 (‘the Award’) being an award of the Australian Industrial Relations Commission.

3. Relevantly, Mr Todd’s hours of duty are from 8.00 am to 5.00 pm, Monday to Friday, including unpaid meal breaks. Every fortnight, Mr Todd is entitled to a rostered day off.

4. Mr Todd was not rostered to attend work on Easter Monday, 24 March 2008. However, at approximately 11.00 am on that day he was contacted by Telstra and requested to perform emergency work. He did so, and the work concluded at approximately 5.30 pm including travelling time.

5. Clause 12 of the Award (‘cl 12’) contains conditions pertaining to ‘Payment for Public Holiday Work’ and clause 18 of the Award (‘cl 18’) for ‘Emergency Work’. Such clauses relevantly provide:

   12.PAYMENT FOR PUBLIC HOLIDAY WORK

   12.1Payment for work on a public holiday

   12.1.1Subject to this clause, for rostered holiday work not exceeding the prescribed weekly hours, an employee will be entitled to extra payment at time and a half for time actually worked on the holiday.

   …

   12.7For the purpose of this clause a full time or part time employee is eligible to observe the following public holidays, without loss of pay:

   ·Good Friday

   ·Easter Saturday

   ·Easter Monday

   [other public holidays are listed]

   18.         EMERGENCY WORK

   18.1Where an employee is called to work to meet an emergency at a time when they would not ordinarily have been at work, and no notice of such call was given to them prior to their ceasing work on ordinary hours, he/she will be paid for such emergency work at the rate of double time. The time for which payment will be made will include time necessarily spent in travelling to and from work. The minimum payment under this clause will be three hours at double time.

6. Mr Todd claimed that on Easter Monday, Telstra was required to pay him his daily wage pursuant to cl 12.7, in view of the fact that the day was a public holiday. In addition to such payment, he claimed that he was entitled to be paid at double time for the hours worked on the emergency, as specified in cl 18, including travelling time. Accordingly, he claimed that he was entitled to be paid at a rate of 300% for the hours worked on the emergency.

7. Telstra acknowledges that Mr Todd was entitled to be paid his ordinary pay between 8.00 am and 11.00 am on the Easter Monday. However, from the time when he was called out to undertake emergency work, Telstra submitted that ordinary pay was substituted by double time, that is, between the hours of 11.00 am and 5.30 pm. Accordingly, Telstra claimed that Mr Todd was not entitled to be paid his usual daily rate whilst simultaneously being paid for emergency work.

8. The Chief Industrial Magistrate considered that Mr Todd had a right, provided to him by cl 12.7, to have paid leave for Easter Monday and found that Mr Todd, upon his call out for emergency work, was entitled to receive additional payment as prescribed by cl 18. His Honour concluded that if it were otherwise Mr Todd would lose the entitlement provided by cl 12.7 for such day. Having been called out to work under cl 18 his Honour found no basis for a ‘set off’ in respect of Mr Todd’s entitlement under cl 12.

9. In interpreting the Award the Chief Industrial Magistrate considered the basis upon which provision is made for a penalty rate of pay where work is conducted on public holidays. He said:

   As with other industrial instruments, the purpose of such a penalty rate is to compensate the employee for the loss of what is intended to be a beneficial entitlement, and also to discourage any propensity on the part of the employer to utilise unnecessarily its entitlement to roster employees on public holidays.

10. By its Notice of Appeal Telstra claims that the learned Chief Industrial Magistrate erred by construing cl 12.7 as creating an entitlement to payment in addition to the amounts payable under cl 18 and that his Honour took into account extraneous considerations when construing the Award.

    MR TODD’S SUBMISSIONS

11. Mr Todd submits that cl 18 makes no recognition for the performance of emergency work on a public holiday and that if it were intended to exclude the usual rate of pay applicable for a public holiday, it would have so provided. Since a public holiday is not usually a time when an employee would be at work, it must follow that if the employee is called out for emergency work, the employee is entitled to the public holiday rate of pay as recognised by cl 12.7 when the employee is not rostered, together with the double rate provided by cl 18.

12. Mr Todd relies upon the text of cl 18, namely the phrase ‘the minimum payment under this clause will be three hours at double time’, as indicating that no provision is made ‘to deduct monies, or take into consideration monies payable under clause 12.7’. He also submits that such provision for minimum amount of payment suggests that the clause should be construed beneficially in favour of the employee. Mr Todd submits that, when the provisions of cl 18 become operative, it entitles the employee to an additional benefit, namely double time, over and above a public holiday pay entitlement, for a minimum of three hours. He submits that the provisions of cl 12.7 and cl 18 must be read together, and that because both clauses are self contained, they operate together.

13. Mr Todd submits that cl 18 essentially relates to a different kind of overtime and that emergency work should be remunerated at a greater rate than that provided for rostered work on a public holiday. Mr Todd submits that, due to the combined operation of cl 12.1.1 and cl 12.7, he would be entitled to receive payment at double time and a half if he were rostered to work on the public holiday. Mr Todd claims that, given that there is no notice for emergency work, a call out for such work imposes a greater burden upon the employee compared with work being performed as a result of being rostered on for a public holiday. Mr Todd submits that therefore it would be incongruous that an employee called out without notice on a public holiday for emergency work would only be paid 100% in excess of his or her ordinary rate, when a rate of 150% extra is provided for those who are rostered to work.

    PRINCIPLES OF INTERPRETATION OF AWARDS

14. The method of interpretation to be adopted by the Court when construing awards is that referred to in Amcor Limited v Construction, Forestry, Mining and Energy Union and Others (2005) 222 CLR 241. It requires a consideration of the content of the relevant clause; its relationship with other clauses; the text and operation of the award; and the legislative background: see Gummow, Hayne and Heydon JJ at [30]. The Court is also required to give effect to the meaning of the Award as is expressed by the terms it uses: see Kirby J at [70]. However, it is desirable, ‘if reasonably available’, to construe the award so as to make it ‘operate fairly towards the parties’: see Callinan J at [131].

15. In City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426 French J (as he then was) observed at [51]:

    An award made under the Act is not a law but, when made, its provisions are given the force of a law of the Commonwealth:

    In effect the statute enacts by the prescribed constitutional method the provision contained in the award.

    Ex parte McLean (1930) 43 CLR 472 at 479 (Isaacs and Starke JJ). See also Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 425; 61 IR 32 at 39 (Brennan CJ, Dawson and Toohey JJ).

16. At [57] his Honour continued:

    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 George A Bond & Co Ltd (in liq) v McKenzie [1929] AR (NSW) 498 at 503-504 (Street J)… 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.

17. These authorities show that, in interpreting the Award, the Court must be mindful of the industrial context in which the Award exists and was made, and should not be too pedantic in construing its provisions. Whilst the Court should strive towards fairness, the primary consideration is still the text of the Award itself, and the Court should not take a results-orientated approach in the interpretation of that text.

    FINDINGS

18. Clause 12 has application for work described under the heading ‘Public Holiday Work’. Clause 12.1 makes provision for extra payment to employees who are rostered for duty on a public holiday. It declares that ‘extra payment at time and a half’ in respect of the actual time worked on that day is to be paid. It follows that if the employee is not rostered on for public holiday work, the provisions of cl 12.1 have no application.

19. As Mr Todd was not rostered to work on Easter Monday, cl 12.1 has no application in these proceedings. Even if it did have application, Telstra challenged the proposition that such clause would have entitled an employee rostered to work a public holiday to payment at the rate of 250%. Telstra submitted that on a proper interpretation of cl 12.1, the rate of pay of rostered employees on a public holiday was 150%.

20. Such issue does not need to be answered in the present proceedings. However, for the purpose of considering the submission of Mr Todd at its highest, the Court will construe cl 12.1.1 and cl 12.7 as providing those employees rostered on a public holiday with a level of remuneration of 250%.

21. Clause 12.7 is not treated in the Award as a separate subject matter but rather comprises part of the matters dealt with under the heading of ‘Payment for Public Holiday Work’. The provisions of cl 12.7 are essentially declaratory of an employee’s right to observe various public holidays without loss of pay. This is distinct from an entitlement, prescribed by a clause, to a special rate of pay on such public holiday. No rate of payment is prescribed by cl 12.7.

22. Clauses contained in the Award other than cl 12 clearly identify discrete subject matters and their terms make provision for each subject. That is to say that each subject matter is contained under a separate heading for which the provision applies. For example, cl 13, which is contained under the heading ‘Christmas Day’ provides:

    13.1For work performed on 25 December, an employee will receive payment at the rate of 250%.

    13.2Where a Christmas Day falls on a Saturday or Sunday, an employee who works on that Saturday or Sunday will be paid at the public holiday rate for work on Christmas Day.

23. Various other subject matters within the Award make provision for specific occasions having specific rates of remuneration. For example cl 14, which is contained under the heading ‘Sunday Work’, prescribes a rate of pay in cl 14.1 as follows:

    14.1Sunday work not in excess of ordinary hours

    Sunday work not in excess of an employee’s ordinary hours, payment will be made at the rate of 200%. Sunday payment will be made for any work performed between midnight on Saturday and midnight on Sunday.

    The provision for Sunday work is followed by the heading ‘Saturday Work’ for which provision is contained in cl 15 and cl 16. Provision is made in cl 17 for ‘Shift Work’ as included under that heading.

24. Emergency work is but another incident of a special rate applicable to a specific subject matter under the heading ‘Emergency Work’. Clause 18 is intended to operate for the specific event of emergency work and applies only to an employee who ‘would not ordinarily have been at work’; who is called to work to meet an emergency; and who undertakes such work. The clause is not dependent upon the operation of any other clause of the Award for its operation. Clause 18 relates to specific subject matter, and adopting the reasons given by Dixon J in The King v Wallis and Another; Ex parte Employers Association of Wool Selling Brothers and Others (1949) 78 CLR 529 at 550, is to be given effect separately to any other provision having a more general application. See also: Anthony Hordern and Sons Limited and Others v The Amalgamated Clothing and Allied Trades Union of Australia (1932) 47 CLR 1 at 7.

25. In Finance Sector Union of Australia v Commonwealth Bank of Australia (2001) 106 IR 172 the Court observed that although the above authorities concerned the interpretation of statutes, such principles can be of assistance in the interpretation of industrial awards. At [12] Gyles J said:

    It is then relevant to note that the Award relates to an enterprise rather than to a wider group such as an industry. I do not think that an enterprise award can be regarded as simply a private commercial contract and construed accordingly. It has a statutory basis and is the result of a process different to that which applies in the case of a commercial contract. However, for the purposes of interpretation, an award related to an enterprise is not to be viewed as a form of general statutory instrument, in relation to which there would be obvious difficulty in having regard to extrinsic material which is not known to or available to all concerned. There is much common ground in the matrix of facts applicable to a particular enterprise, and the making of an award involves negotiation and often, to a greater or lesser extent, agreement.

26. In this instance that process of negotiation has resulted in the Award which includes provisions for entitlements on specific events, such as those for public holidays, Christmas Day, and for incidents requiring the performance of emergency work.

27. Clause 18 provides that an employee ‘will be paid’ double time for hours spent in undertaking such work and also in travelling to and from that work. Its terms are specific, directive and unambiguous and apply where an employee is called to meet an emergency ‘at a time when they [that is, the employee] would not ordinarily have been at work’. The operation of cl 18 does not depend upon whether the emergency work arises at a weekend, on a public holiday, or on a regular working day. Nor does cl 18 suggest that the payment prescribed is to be supplemented or qualified in any way.

28. Even if Mr Todd is correct in his interpretation that cl 12.1.1 and cl 12.7 operate concurrently to give an employee a rate of pay of 250% if rostered on a public holiday, cl 12.1.1 is materially different in its terms to cl 18. Clause 12.1.1 refers to ‘extra payment’ and for the word ‘extra’ to have any meaning, it must refer to something external to the provision itself, so the provision cannot have meaning without resort to another clause or other clauses of the Award. In contrast, cl 18 is self contained in its operation. It states that where the relevant conditions are met, an employee ‘shall be paid for such emergency work at a rate of double time.’ These words provide a complete statement of the entitlement to remuneration for emergency work. Therefore, there is no requirement that cl 18 should operate in a similar fashion to cl 12.1.1, that is, concurrently with cl 12.7.

29. The Chief Industrial Magistrate construed cl 12.7 as an ‘entitlement’ to remuneration. By so doing, his Honour has assumed that a rate of pay provided by cl 12.7 could not be suspended during the time that the employee was required to perform emergency work. His Honour’s finding is not supported by the text of the Award. Clause 12.7 prescribes no rate of payment for a public holiday. It affirms that the employee is ‘eligible’ to observe the public holiday without loss of pay, not that the employee is entitled to pay, whether or not they ‘observe’ the public holiday. Accordingly, pay is not suspended by the operation of cl 18, but rather a positive entitlement to remuneration never arises from cl 12.7. In summary, cl 12.7 deals with an entitlement to leisure, not an entitlement to money, whether or not leisure time is taken. Clause 12.7 does not purport to set any rate of pay for public holidays but is merely declaratory of the pay arrangement for such days.

30. His Honour then considered the ‘important benefit to the welfare of permanent employees, namely the opportunity to spend more leisure time with family and friends without loss of pay’. While such a rationale is no doubt a consideration of those negotiating the awards, the Court is required to interpret the Award principally from the terms of the instrument: see Amcor per Kirby J at [70].

31. An employee who is not rostered on for work on a public holiday is, by virtue of cl 12.7, entitled ‘to observe’ such day without loss of pay. If, however, that employee is requested to undertake emergency work and does so, he or she ceases to be ‘observing’ the holiday and instead the provisions of cl 18 become operative. When this occurs, leisure time is suspended. The work which Mr Todd undertook was emergency work for which he was called out in circumstances that he ‘would not ordinarily have been at work’. Accordingly, cl 12.7 and cl 18 are directed to mutually exclusive circumstances.

32. Mr Todd’s submissions supporting his argument that he is simultaneously entitled to payment under cl 12.7 and cl 18 overlooks two considerations. Firstly, there is no evidence to support the assertion that emergency work should necessarily command greater remuneration than rostered work on a public holiday. Since cl 18 refers to an employee being ‘called into work’ it suggests that emergency work on a public holiday could be declined. In respect of rostered work the employee will necessarily lose the benefit of the leisure time on the public holiday. Arguably, such employee should be recompensed for such imposition, as is recognised by the provisions of cl 12.1. Secondly, there is no illogicality in treating cl 18 as a provision directed to the remuneration of employees who are requested to perform emergency work on any day without distinction whether the day is a public holiday or otherwise, with Christmas Day as an exception which is recognised in the Award by the provision of cl 13.

1. As an entirely separate consideration, Telstra submitted that unlike the text of the provision for overtime in cl 10.1, or rostered work in cl 12.1.1, the invoking of cl 18 involves discretion on the part of the employee to accept or decline emergency work. Accordingly, the objective which the Chief Industrial Magistrate considered desirable is satisfied by the clause. If the employee wished to retain leisure time, any request to perform emergency work could be declined.

2. The further consideration raised by his Honour, namely the fact that an employer might be ‘tempted to severely limit the number of rostered employees on public holidays’ and instead rely upon the provisions of cl 18 because rostered work would be remunerated at 250%, while emergency work at 200% only, is without any evidential basis.

3. The Court does not need to determine, and expressly makes no finding upon the question whether rostered work on a public holiday would necessarily lead to payment at 250%. However, the mischief which the Chief Industrial Magistrate identified, namely that it might be expedient for Telstra to use emergency work provisions rather than roster employees on public holidays, would be a practice which would not be condoned, and any such practice would become transparent since emergency work and rostered work are distinct. As stated earlier, there is no textual basis for Mr Todd’s submission that emergency work is mandatory, and that for this reason the benefit under cl 18 is intended to be compensatory.

4. For the above reasons the Court respectfully considers that the Chief Industrial Magistrate erred in the interpretation of the Award and that the provisions of cl 18 operate exclusively to prescribe the payment to be paid to the employee whilst he or she is undertaking emergency work.

I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Cowdroy.

Associate:

Dated:        21 May 2009

Counsel for the Appellant:	Mr Prince
Solicitor for the Appellant:	Blake Dawson
Solicitor for the Respondent:	Mr Dwyer

Date of Hearing:	28 April 2009
Date of Judgment:	21 May 2009