The Australian Workers' Union v Lactalis Australia Pty Ltd
[2020] FWC 1745
•31 MARCH 2020
| [2020] FWC 1745 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
The Australian Workers' Union
V
Lactalis Australia Pty Ltd
(C2019/3308)
COMMISSIONER HUNT | BRISBANE, 31 MARCH 2020 |
Alleged dispute about any matters arising under the enterprise agreement and the NES – meaning of shift worker for the purposes of an enterprise agreement – employees’ entitlement to annual leave – distinction between meaning of ‘shift work’ and ‘shift worker’
[1] The Australian Workers’ Union (the AWU) has applied to the Fair Work Commission (the Commission) pursuant to s.739 of the Fair Work Act 2009 (the Act) to deal with a dispute relating to the annual leave entitlements of shift workers pursuant to the Parmalat Australia Pty Ltd (Nambour Operations) Enterprise Agreement 2016 (the Agreement). The Respondent to this dispute is Lactalis Australia Pty Ltd (Lactalis/the Respondent) being the employer to whom the Agreement covers and applies.
Background to dispute
[2] On 29 March 2019, the AWU corresponded with the Respondent in the following terms (formalities omitted):
“Re: Annual Leave Accrual – Clause 7.2 of [the Agreement]
We confirm and act on behalf of our members located at the Distribution are of Nambour Operations (‘Members’).
We refer to the:
1. above matter;
2. [the Agreement]; and
3. Fair Work Act 2009 (Cth) (‘Act’).
THE PURPOSE OF THIS CORRESPONDENCE
1. The purpose of this correspondence is to request that our Members be provided their additional weeks’ annual leave stipulated in clause 7.2 of the Agreement.
2. Additionally, in consideration of the above, we are raising a dispute under clause 2.3 of the Agreement.
CLAUSE 7.2 OF THE AGREEMENT
3. We draw your attention to clause 7.2 of the Agreement, which states that every employee except casual employees are entitled to five weeks leave if they are a Shift Worker.
4. Clause 7.2 of the Agreement provides:
‘7.2.1 Every employee (other than a casual employee) covered by this Agreement shall for each year of service be entitled to annual leave as follows:-
(a) 190 hours (5 weeks) if employed as a shift worker;
(b) 152 hours (4 weeks) in any other case.’
Shift Worker
5. Additionally, clause 1.7.8 of the Agreement defines a Shift Worker as the following:
“Shift worker” means an employee who may be required to undertake day, afternoon and/or nightshift and includes an employee who regularly works a day shift.”
6. In consideration of clause 1.7.8 of the Agreement, we consider a ‘Shift Worker’ to be defined as:
a. Day shifts; or
b. Afternoon and/or nightshifts; or
[the definitions of Afternoon shift and Night shift are extracted]
c. Employees who work regularly on day shifts.
OUR MEMBERS
7. Our Members are Shift Workers as they work three fixed shifts that do not rotate, which include:
a. 0800 to 1600 – Day Shift;
b. 1600 to 2400 – Afternoon Shift; and
c. 2400 to 0800 – Night Shift.
8. Additionally, all our Members regularly work weekends and public holidays.
9. In consideration of the above, we are confident that our Members satisfy clause 1.7.8 and 7.2 of the Agreement, and thus are entitled to five weeks annual leave.
CONTRAVENTIONS
10. We advise that upon review of the documents provided to us from you that a contravention may have occurred under section 50 of the Act, which states that failure to comply with an Agreement clause could amount to a contravention under the Act.
11. We note that for each contravention, the Civil Penalty Provisions under Part 4-1 of the Act apply and an amount of 60 to 600 penalty units ($12,600.00 to $126,000.00) could apply to each of them.
NEXT STEPS
12. In consideration of the items above, we request that our Members be provided five weeks Annual Leave.
13. We request that this matter be resolved by no later than 4pm, Friday, 5 April 2019.
14. If you do not engage or refuse our request outlined in paragraph 12 of this correspondence, our Members will consider their position, in particular, the potential contraventions by you in paragraph 10 and 11 of this correspondence and proceed on that particular basis.
15. Our Member reserves all their rights in this matter.” (errors in original)
[3] The Respondent replied on 23 April 2019 as follows (formalities omitted):
“Re: Annual Leave Accrual- Clause 7.2 of [the Agreement]
We refer to the above matter and your correspondence on 29 March 2019.
In consideration of the points that you raise on behalf of your members in the Distribution area, and the dispute you raise in regards to clause 7.2 of the Agreement please find below our response.
We believe that in order for an employee to fall within the definition of shift worker, the employee must undertake shift work.
As per the definition of shift work, in clause 1.7 of the Agreement:
“Shift work means ordinary hours of work done by separate relays of employees working ordinary hours which rotate from day, afternoon and/or night shift or working ordinary hours on a fixed afternoon or night shift. This includes regularly working weekends and public holidays.”
Employees who do not work in relays rotating from day, afternoon and or night shift, are not by definition shift workers. Similarly, employees who do not regularly work weekends and public holidays are not by definition shift workers.
On the basis of this we therefore do not believe that the additional week of annual leave is applicable.” (errors in original)
[4] On 28 May 2019, the AWU lodged the present application to the Commission. On 10 June 2019 a conference was convened before me to attempt to resolve the issues between the parties. Following the conference, the parties engaged in further discussions to the point where, on 12 September 2019, the AWU advised that the dispute remained unresolved and requested that the matter be arbitrated.
The Commission’s power to deal with disputes
[5] Legislative provisions concerning the jurisdiction of the Commission to deal with a dispute pursuant to dispute settlement procedures in enterprise agreements are found in s.595 and s.739 of the Act. Section 595 states:
“595 FWC’s power to deal with disputes
(1) The FWC may deal with a dispute only if the FWC is expressly authorised to do so under or in accordance with another provision of this Act.
The FWC may deal with a dispute (other than by arbitration) as it considers appropriate, including in the following (a) by mediation or conciliation (b) by making a recommendation or expressing an opinion.
(2) The FWC may deal with a dispute by arbitration (including by making any orders it considers appropriate) only if the FWC is expressly authorised to do so under or in accordance with another provision of this Act.
Example: Parties may consent to the FWC arbitrating a bargaining dispute (see subsection 240(4)).
(3) In dealing with a dispute, the FWC may exercise any powers it has under this Subdivision.
Example: The FWC could direct a person to attend a conference under section 592.
(5) To avoid doubt, the FWC must not exercise the power referred to in subsection (3) in relation to a matter before the FWC except as authorised by this section”
[6] Section 739 provides that:
“739 Disputes dealt with by the FWC
(1) This section applies if a term referred to in section 738 requires or allows the FWC to deal with a dispute.
(2) The FWC must not deal with a dispute to the extent that the dispute is about whether an employer had reasonable business grounds under subsection 65(5) or 76(4), unless:
(a) the parties have agreed in a contract of employment, enterprise agreement or other written agreement to the FWC dealing with the matter; or
(b) a determination under the Public Service Act 1999 authorises the FWC to deal with the matter.
Note: This does not prevent the FWC from dealing with a dispute relating to a term of an enterprise agreement that has the same (or substantially the same) effect as subsection 65(5) or 76(4) (see also subsection 55(5)).
(3) In dealing with a dispute, the FWC must not exercise any powers limited by the term.
(4) If, in accordance with the term, the parties have agreed that the FWC may arbitrate (however described) the dispute, the FWC may do so.
Note: The FWC may also deal with a dispute by mediation or conciliation, or by making a recommendation or expressing an opinion (see subsection 595(2)).
(5) Despite subsection (4), the FWC must not make a decision that is inconsistent with this Act, or a fair work instrument that applies to the parties.
(6) The FWC may deal with a dispute only on application by a party to the dispute.”
[7] The Commission’s powers to deal with disputes derive, in the case of an enterprise agreement, from the terms of the dispute settlement procedure contained in the enterprise agreement. As a Full Bench of the Commission observed in CFMEU v North Goonyella Coal Mines Pty Ltd, 1 the Commission may deal with a dispute only on application of a party to the dispute (s.739(6)); is prohibited from exercising any powers limited by the dispute settlement procedure (s.739(3)); may arbitrate only if the agreed dispute settlement procedure permits it to do so (s.739(4)); and must not make a decision that is inconsistent with the Act, the enterprise agreement and any other applicable fair work instrument (s.739(5)).
[8] Clause 2.3 of the Agreement is headed “Dispute Resolution” and is the relevant disputes procedure. It is not in dispute that this procedure has been complied with and permits the Commission to determine the dispute. I am satisfied that the Commission has the power to determine the dispute.
Hearing
[9] This matter was heard before me on 31 October 2019. Mr Aaron Santellises, Industrial Advocate of the AWU appeared. Mr Mark Walls, factory worker of the Respondent gave evidence on behalf of the AWU. Mr Alex Aspromourgos, Chair & Executive Director of Mapien was granted leave pursuant to s.596(2)(a) of the Act to appear for the Respondent. Ms Lee-Ann Khan, National Talent Acquisition Manager gave evidence on behalf of the Respondent.
[10] None of the witnesses were required for cross-examination and the matter proceeded on the basis of the witness statements of each witness. 2 Whilst not all of the submissions and evidence are referred to in this decision, all of such have been considered.
Questions for arbitration
[11] The parties had not settled on the relevant question(s) for arbitration by the time the hearing commenced. During an adjournment, the parties, with the assistance of the Commission, settled on the following questions for arbitration:
Having particular regard to clauses 1.7.7, 1.7.8 and 7.2.1 of the Parmalat Australia Pty Ltd (Nambour Operations) Enterprise Agreement 2016 (the Agreement):
(a) Are employees who work ordinary hours between 6am and 6pm Monday to Friday and (on average) every second Saturday, ‘Shift Workers’ pursuant to clause 7.2.1(a) of the Agreement?
(b) Are employees who work ordinary hours on fixed afternoon shifts rostered Monday to Friday and (on average) every second Sunday, ‘Shift Workers’ pursuant to clause 7.2.1(a) of the Agreement?
(c) Are employees who work ordinary hours fixed night shifts rostered Monday to Friday and (on average) every second Saturday, ‘Shift Workers’ pursuant to clause 7.2.1(a) of the Agreement?
Relevant clauses of the Agreement
[12] The following are relevant clauses of the Agreement for consideration:
“1.7 Definitions
For the purpose of this Agreement, the following definitions will apply unless there is a contrary intention indicated.
…….
…….
…….
1.7.7 “Shift work” means ordinary hours of work done by separate relays of employees working ordinary hours which rotate from day, afternoon and/or night shift or working ordinary hours on a fixed afternoon or night shift. This includes regularly working weekends and public holidays.
1.7.8 “Shift worker” means an employee who may be required to undertake day, afternoon and/or nightshift and includes an employee who regularly works a day shift.
……..
……..
7.2.1 Every employee (other than a casual employee) covered by this Agreement shall for each year of service be entitled to annual leave as follows:-
(a) 190 hours (5 weeks) if employed as a shift worker;
(b) 152 hours (4 weeks) in any other case.
……….”
Evidence and submissions of the Applicant
Evidence of Mr Mark Walls
[13] Mr Walls is employed by the Respondent as a factory worker. Mr Walls’ evidence is of narrow compass. There are three shifts of work as follows:
a. 0800 to 1600 – which is classed as the Day Shift;
b. 1600 to 2400 – which is classed as the Afternoon Shift; and
c. 2400 to 0800 – which is classed as the Night Shift.
[14] Mr Walls works on the night shift. A previous roster provided for eight-hour shifts worked five days per week, with two hours accruing towards a rostered day off. From 15 July 2019, the roster provides for eight hours shifts worked four days per week, with a fifth shift of only six hours, equating to 38 hours of work.
[15] Mr Walls stated that all the relevant employees work weekends and public holidays.
[16] Having reviewed the roster produced by Ms Khan in her evidence, it is evident that Mr Walls’ roster is as follows:
Week 1: Tuesday to Saturday, with eight hours worked Tuesday to Friday, and six hours worked Saturday
Week 2: Monday to Friday, with eights hours worked Monday, Tuesday, Thursday and Friday, and six hours worked Wednesday
Week 3: Monday to Friday, with eight hours worked Monday to Thursday, and six hours worked Friday
Week 4: Tuesday to Saturday, with eight hours worked Tuesday to Friday, and six hours worked Saturday
Submissions of the AWU
[17] The dispute is in relation to clause 7 of the Agreement. The AWU submits that clause 7.2.1 of the Agreement details the annual leave entitlements of employees and, relevantly, that the entitlement of an employee employed as a shift worker is 190 hours (5 weeks) annual leave.
[18] Whether an employee is a shift worker for clause 7.2 of the Agreement is determined by the definition of shift worker contained in clause 1.7.8 of the Agreement. Clause 1.7.8 of the Agreement means that an employee is a ‘shift worker’ if the employee is required to undertake:
a. Day shifts; or
b. Afternoon and/or nightshifts; or
c. employees who work regularly on day shifts. (emphasis added)
[19] The AWU submitted that this definition is not ambiguous or susceptible of more than one meaning and should be construed on the face of the words alone. However, if regard is had to the definition of ‘shift work’ (as opposed to ‘shift worker’) in clause 1.7.7 of the Agreement, then the result is the same that there are employees that are ‘shift workers’ for the purposes of clause 7.2 of the Agreement, and an entitlement to 190 hours (5 weeks) of annual leave.
[20] In relation to clause 1.7.7 of the Agreement, the AWU submits that it defines ‘shift work’ rather than the phrase ‘shift worker’ referred to in clause 7.2.1. The phrases ‘shift worker’ and ‘shift work’ are contained in various places throughout the Agreement and have separate and distinct meanings utilised in the circumstances in which they appear. The AWU provided the following table concerning the use of these two phrases:
Clause 2.7.2 | For the purpose of these provisions “ordinary pay” shall mean at the ordinary weekly rate paid to the employee exclusive of any allowance for travelling time and fares or shift work. |
Clause 6.4.4 | No afternoon or night shift shall be recognised as such unless the shift work operation is schedule for at least four days. |
Clause 6.4.6 | Where a shift worker undertakes shift work on a Saturday, they will be paid in accordance with the appropriate parent award. |
Clause 6.4.7 | Where a shift worker undertakes shift work on a Sunday, they will be paid in accordance with the appropriate parent award. |
Clause 6.4.9 | All employees will be required to undertake shift work where the operational requirements of the Employer make this necessary. Where shift work is undertaking it will be undertaken on the following conditions: • That an employee undertaking an afternoon shift will receive a shift allowance of 15% more than the ordinary rate. This will apply to ordinary hours only on afternoon shift. • From 04th January 2016 the rate for night shift will increase to 23% more than the ordinary rate. This will be applied to the ordinary hours worked only on night shift. |
[21] In particular, the Agreement makes reference, in clauses 6.4.6 and 6.4.7 of the Agreement, to a ‘shift worker’ undertaking ‘shift work’. This, it is submitted, is supportive of the AWU’s proposition that they have separate and distinct meanings.
Evidence and submissions of the Respondent
Evidence of Ms Lee-Ann Khan
[22] Ms Lee-Ann Khan is the National Talent and Acquisition Manager for the Respondent. Ms Khan has been employed with the Respondent since August 2011 and during that time has held a number of human resources roles. Ms Khan supported the Respondent during bargaining for the 2013 Agreement. In that support role, Ms Khan attended bargaining meetings and prepared meeting minutes. Ms Khan gave evidence concerning bargaining that occurred between 13 March 2013 and 4 July 2013, when an in-principle agreement was reached with the union bargaining representatives. Relevantly, Ms Khan’s evidence is:
“During bargaining for the 2013 Agreement neither [the Respondent] nor any of the Unions sought to introduce any changes to the accrual of annual leave provisions.
[The Respondent] did as part of formalising the outcomes of the 2013 bargaining seeking to consolidate the existing provisions of the 2010 Agreement and the relevant incorporated awards into a single document. This process of drafting resulted in the introduction of an annual leave and other provisions in the Agreement. Previously the annual leave entitlements has been incorporated from the relevant underpinning awards.
At no stage during bargaining for the 2013 Agreement did any union seek to increase the annual leave entitlements of shift workers not working shifts over a period of seven days per week.” 3
[23] Ms Khan’s evidence also goes to the pre-approval steps taken by the Respondent in putting the proposed agreement to employees for ballot. This includes the relevant explanatory material provided to employees in the pre-approval process.
[24] Ms Khan was also involved in bargaining for the current Agreement, having attended the bargaining meetings and prepared minutes of those meetings. Twelve bargaining meetings occurred in relation to the Agreement between 14 March 2016 and 9 August 2016. In relation to this round of bargaining, Ks Khan stated:
“Neither [the Respondent] nor any of the Unions sought to introduce any changes to the accrual of annual leave provisions through bargaining for the 2016 Agreement…” 4
[25] Ms Khan gave evidence concerning the operation of the roster system utilised by the Respondent as follows:
“Distribution employees engaged by [the Respondent] at Nambour work a four week roster comprising of 38 rostered ordinary hours per week.
Four employees undertake their ordinary hours within a spread of 0800 to 1600 Monday to Saturday. These employees work on five days each week working four 8 hour days and on 6 hour day.
Four employees undertake their ordinary hours within a spread of 1600 to 2400 Sunday to Friday. These employees work on five days each week working four 8 hour days one 6 hour day.
Four employees undertake their ordinary hours within a spread of 0000 to 0800 Monday to Saturday. These employees work on a five days each week working four 8 hour days and one 6 hour day.
This roster has been in place since 15 July 2019…
Employees working on this roster are generally required to work on most public holidays that fall on their rostered days. In the 2018 calendar year employees worked a minimum of 5 and a maximum of 8 public holidays. No employee on this roster worked on either New Year’s Day or Christmas Day.
Prior to 15 July 2019 employees worked five 8 hour days totalling 40 hours per week with one rostered day off accrued every four weeks.” 5
Submissions of the Respondent
[26] The Agreement currently covers and applies to the employment of the Respondent’s 12 distribution employees at the Nambour site. These employees work on a four-week roster system, which the Respondent has summarised as follows:
“AM Work
• 38 ordinary hours are worked each week;
• Ordinary hours are undertaken Monday to Saturday;
• 2 Saturdays are worked each 4 weeks;
• The rostered ordinary hours are undertaken from 0800 to 1600 on 4 days and either 0600 to 1200, 0800 to 1400 or 0900 to 1500 on 1 day each week.
PM Work
• 38 ordinary hours are worked each week;
• Ordinary hours are undertaken Sunday to Friday;
• 2 Sundays are worked each 4 weeks;
• The rostered ordinary hours are undertaken from 1600 to 2400 on 4 days and either 1600 to 2200 or 1800 to 2400 on 1 day each week.
Night Work
• 38 ordinary hours are worked each week;
• Ordinary hours are undertaken Monday to Saturday
• 2 Saturdays are worked each 4 weeks;
• The rostered ordinary hours are undertaken from 0000 to 0800 on 4 days and 0000 to 0600 on 1 day each week.
Employees undertaking the roster do not rotate to or from an AM/PM/Night work.
Employees undertaking the roster worked between 5 and 8 public holidays in 2018.
The roster shows a 28 hour gap in work from 1200 Saturday to 1600 Sunday.” 6
[27] The construction preferred by the Respondent is set out as follows:
“It is submitted that a shift worker for the purposes of clause 7.2.1 of the 2016 Agreement means:-
An employee who works shifts of ordinary hours that:-
• Rotate from day to afternoon or night;
• Rotate from afternoon to night or day;
• Rotate from night to day or afternoon;
OR
• Are a fixed afternoon shift; or
• Are a fixed night shift;
AND
• Regularly works weekends and public holidays.” 7
[28] As is apparent from this, the Respondent’s position is that a day shift worker will be a shift worker if they rotate from day to afternoon or night shift and regularly work weekends.
[29] The proper interpretation of the Agreement is conducted in the context of the Agreement as a whole, and with consideration as to the place and arrangement of the disputed provisions in the Agreement. The definition of ‘shift worker’ in clause 1.7.8 immediately follows the definition of ‘shift work’ in clause 1.7.7. Clause 1.7.7 makes clear that for an employee to undertake shift work, and fall within the definition of shift worker, they must rotate from day, afternoon and/or night shift or work a fixed afternoon or night shift and regularly work weekends and public holidays. The definition of ‘shift worker’ flows logically from and ought to be read in conjunction with the definition of ‘shift work’. To do so is consistent with the context of the Agreement read as a whole, and the position of each clause within the Agreement. The Respondent submitted:
“The provisions must be read together. A shift worker must mean an employee who works shift work in accordance with clause 1.7.7.” 8
[30] It was submitted that an employee working a fixed ‘day shift’ does not undertake shift work and is not, therefore, a ‘shift worker’.
[31] In addition, clause 1.7.7 requires an employee to regularly work weekends and public holidays. The Respondent referred to a decision of the Commission in O’Neill v Roy Hill Holdings Pty Ltd 9(O’Neill) in which the Commission considered the meaning of the phrase “regularly works on Sundays and public holidays”. Considering the phrase in its historical context, the Commission determined that an employee “regularly works on Sundays and public holidays” if they have worked at least 34 Sundays and 6 public holidays in a year. The reasoning in O’Neill was generally accepted in “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Genesee & Wyoming Australia Pty Ltd10(Genesee).
[32] The term “weekend” is not defined by the Agreement and should be given its ordinary meeting. The Oxford English Dictionary defines weekend to mean “Saturday and Sunday, especially regarded as a time for leisure”. The Respondent submits that for the purposes of clause 1.7.7 of the Agreement, an employee must regularly work Saturday and Sunday. It is not sufficient for an employee to work on a Saturday or Sunday. On this construction, and on the basis of the evidence before the Commission, no employee is regularly working weekends in that no employee works on a Saturday and Sunday. Employees work an average of either 2 Saturdays or 2 Sundays each 4 weeks to a maximum of 26 Saturdays or Sundays in each year.
[33] When consideration is had to the relevant clauses and the context of the Agreement has a whole, there is a distinction between a ‘day worker’ and a ‘day shift worker’. Clause 6.4 of the Agreement deals with shift work and makes no reference to ‘day shift’, which is only referred to in the definition of ‘shift work’.
[34] The use of the words “and/or” in between afternoon and nightshift in clause 1.7.8 creates uncertainty as to whether the three phrases are to be read cumulatively or in the alternative to each other (as contended for by the AWU).
[35] The Respondent also submitted that the surrounding objective background is of assistance in the construction exercise. The Agreement is the result of a long history of enterprise bargaining at the Respondent’s operational sites, including the Nambour site. There have been two predecessor agreements to the Agreement being the Parmalat Australia Limited (Nambour Operations) Union Collective Agreement 2010 (the 2010 Agreement) and the Parmalat Australia Pty Ltd (Nambour Operations) Enterprise Agreement 2013 (the 2013 Agreement). The relevant provisions in the 2013 Agreement and the Agreement are the same.
[36] The 2010 Agreement incorporated annual leave provisions from the relevant National Agreement Preserving State Awards (NAPSA) being the Milk Treatment, Milk Products Manufacture and Milk etc. Distribution Award – South Eastern District. The NAPSA formed Schedule 1 to the 2010 Agreement. Clause 7.1.1 of the NAPSA provides for an entitlement of 5 weeks leave for employees that are “employed on shift work where 3 shifts per day are worked over a period of 7 days per week”. The employees the subject of this dispute did not become entitled to 5 weeks annual leave under the 2010 Agreement.
[37] It was submitted that part of the objective background facts includes the log of claims submitted by the AWU (and other unions) during the course of bargaining for the 2013 Agreement. On 8 May 2013, a log of claims was submitted. That log of claims did not include a claim for additional annual leave accruals for any employees. This, it is submitted, is consistent with the Respondent’s contention that the 2013 Agreement (and subsequently the Agreement) did not alter the leave arrangements as they existed in the 2010 Agreement, incorporating the NAPSA.
[38] Similarly, the explanatory documents prepared and distributed by the Respondent in the pre-approval stages of the Agreement do not mention a change to the accrual of annual leave entitlements. It was submitted that evidence of what employees were told during negotiations is useful in identifying the objective background facts, consistent with the principles established by the Full Bench in Berri. 11
[39] During the hearing, I inquired of the Respondent if it was its position that the present roster, and earlier iterations of it, concluded that employees would never be entitled to give weeks’ annual leave? The Respondent affirmed that is its position. 12
[40] Because the Respondent’s submissions rely on history and context of industrial instruments between the parties it is helpful to briefly summarise this history through the industrial instruments.
NAPSA
[41] It is not entirely clear but it does not appear to be in dispute that the NAPSA at least covered the Respondent and the relevant employees prior to the 2010 Agreement. The NAPSA took effect from 3 November 2003 and dealt with annual leave in clause 7.1. Clause 7.1.1 of the NAPSA relevantly provided:
“Every employee (other than a casual employee) covered by this Award shall at the end of each year of their employment be entitled to annual leave on full pay as follows:
(a) Not less than 5 weeks, if employed on shift work where 3 shifts per day are worked over a period of 7 days per week…”
[42] The NAPSA did not contain a definition of ‘shift work’ but dealt with ‘shift work’ (for employees of employers other than Pauls Ltd and Montague Moulders Pty Ltd) in clause 6.1.2, which provided:
“Shift work may be worked in accordance with a roster and conditions as agreed between the employer and the majority of employees affected in the section or sections concerned.”
[43] Clauses 6.6 and 6.7 of the NAPSA dealt with allowances for afternoon and night shift and weekend work respectively.
2010 Agreement
[44] The 2010 Agreement incorporates the whole of the NAPSA as a schedule to the 2010 Agreement. In the event of an inconsistency between the terms of the schedule and the terms of the Agreement, the Agreement prevails over the schedule to the extent of the inconsistency.
[45] Other than dealing with the National Employment Standards generally, and cashing out of annual leave, the body of the 2010 Agreement does not deal with annual leave. As a result of the incorporation provisions summarised above, the terms of the NAPSA, as a schedule to the 2010 Agreement, governed the annual leave entitlements of employees while the 2010 Agreement was in operation. That entitlement has been summarised above.
2013 Agreement
[46] The 2013 Agreement was approved by a decision of the Commission on 27 August 2013. 13 The 2013 Agreement commenced operation on 3 September 2013 and nominally expired on 30 June 2016. The Respondent and the AWU were covered by the 2013 Agreement.
[47] As with the 2010 Agreement, the 2013 Agreement incorporates the whole of the NAPSA, although it does not make the NAPSA a schedule to the 2013 Agreement. In the event of an inconsistency between the terms of the schedule and the terms of the Agreement, the Agreement prevails over the schedule to the extent of the inconsistency.
[48] The 2013 Agreement is to be read in conjunction with the NES and no term of the 2013 Agreement shall be less favourable than the corresponding NES entitlement. Should a term of the 2013 Agreement be less favourable than the NES, the NES term will apply.
[49] However, unlike the previous industrial instruments, the 2013 Agreement included annual leave entitlements in the body of the agreement. Clause 7.2 of the 2013 Agreement, in so far as it relates to the entitlement to annual leave, is as follows:
“7.2.1 Every employee (other than a casual employee) covered by this Agreement shall for each year of service be entitled to annual leave as follows:-
(a) 190 hours (5 weeks) if employed as a shift worker;
(b) 152 hours (4 weeks) in any other case.”
[50] The term ‘shift worker’ is defined by the Agreement at clause 1.7.8 as meaning:
“…an employee who may be required to undertake day, afternoon and/or nighshift and includes an employee who regularly works a day shift.”
[51] Afternoon and night shift are defined terms; day shift is not.
The Agreement
[52] The current industrial instrument is the Agreement. The Agreement was approved by a decision of the Commission on 27 October 2016. The Agreement commenced operation on 3 November 2016 and will nominally expire on 30 June 2020. The AWU is covered by the Agreement.
[53] Like all previous industrial instruments, the Agreement incorporates the terms of the NAPSA, although as with the 2013 Agreement, it does not annex the NAPSA.
[54] Clause 7.2 deals with annual leave and the clause is identical to the terms of the 2013 agreement. The definition of ‘shift worker’ is also identical.
Principles of construction of enterprise agreements
[55] The issue raised by the AWU concerns the proper construction of clauses of the Agreement. The approach to this task was most recently set out in a Decision of a Full Bench of the Commission in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Berri Pty Ltd 14 as follows:
“1. The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. Context might appear from:
(i) the text of the agreement viewed as a whole;
(ii) the disputed provision’s place and arrangement in the agreement;
(iii) the legislative context under which the agreement was made and in which it operates.
2. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.
3. The common intention of the parties is sought to be identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to the subjective intentions or expectations of the parties.
4. The fact that the instrument being construed is an enterprise agreement made pursuant to Part 2-4 of the FW Act is itself an important contextual consideration. It may be inferred that such agreements are intended to establish binding obligations.
5. The FW Act does not speak in terms of the ‘parties’ to enterprise agreements made pursuant to Part 2-4 agreements, rather it refers to the persons and organisations who are ‘covered by’ such agreements. Relevantly s.172(2)(a) provides that an employer may make an enterprise agreement ‘with the employees who are employed at the time the agreement is made and who will be covered by the agreement’. Section 182(1) provides that an agreement is ‘made’ if the employees to be covered by the agreement ‘have been asked to approve the agreement and a majority of those employees who cast a valid vote approve the agreement’. This is so because an enterprise agreement is ‘made’ when a majority of the employees asked to approve the agreement cast a valid vote to approve the agreement.
6. Enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, however the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided and consequently some general principles of statutory construction may have less force in the context of construing an enterprise agreement.
7. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning.
8. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.
9. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.
10. If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement.
11. The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.
12. Evidence of objective background facts will include:
(i) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;
(ii) notorious facts of which knowledge is to be presumed; and
(iii) evidence of matters in common contemplation and constituting a common assumption.
13. The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.
14. Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was.
15. In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But such post-agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.”
[56] In CFMEU v Endeavour Coal Pty Ltd T/A Appin Mine 15 a Full Bench of the Commission held that the context of an agreement provision is significant. In this regard, the Full Bench set out the explanation of this point by the NSW Court of Appeal in Mainteck Services Pty Ltd v Stein Heurtey SA16 emphasising the following matters:
• Until a word or phrase is understood in the light of the surrounding circumstances, it is rarely possible to know what it means 17 and there is always some context to any statement;18
• Language considered in its context will often have a clear meaning and context will often not displace that meaning – “but not always”; 19
• To state that a legal text is clear reflects the outcome of an interpretation process and means that there is nothing in the context that detracts from the ordinary literal meaning and cannot mean that context can be put to one side; 20
• The phrase used by Mason J in Codelfa “if the language is ambiguous or susceptible of more than one meaning” does not mean that the susceptibility of the language to more than one meaning must be assessed without reference to the surrounding circumstances and in order to determine whether more than one meaning is available it may be necessary to turn to context; 21 and
• Context has also been described as surrounding circumstances and the meaning of terms normally requires consideration not only of the text, but of the surrounding circumstances known to the parties and the purpose and object of the transaction 22
[57] The case law in relation to the approach to the construction of enterprise agreements makes it clear that context and purpose are relevant to the construction of provisions in an enterprise agreement and must be considered even where the words of the provision being construed appear, on their face, to have a clear and unambiguous meaning. The following observations of Madgwick J in Kucks v CSR are also apposite in the present case:
“It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand.
But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning.” 23
Consideration
[58] Clause 7.2.1 of the Agreement provides that permanent employees will be entitled to five weeks’ annual leave if they are employed as a shift worker. It provides no further qualification. The clause is clear and unambiguous; if you are employed as a shift worker and you not a casual employee, you will be entitled to five weeks’ annual leave per annum.
[59] The parties covered by the Agreement have, it seems for at least the 2013 and 2016 Agreements, settled on a definition of ‘shift worker’. It is a defined term that the parties who are covered by the Agreement have purposefully inserted into the Agreement.
[60] That the definition of ‘shift worker’ references day shift, without there being a distinct definition of day shift within the definitions clause, 1.7 is irrelevant. There are a number of employees who work for the Respondent who work a day shift; a shift other than afternoon or night shift.
[61] The parties saw fit, and voted to approve and therefore made the Agreement to include the definition of shift worker to mean an employee who may be required to undertake day, afternoon and/or nightshift and includes an employee who regularly works a day shift. The Respondent did not offer up why it is that the last part of the sentence includes a reference to an employee who regularly works a day shift. On the Respondent’s submissions relevant to this dispute, there would be no work for that part of the definition.
[62] It is true, and Berri requires the consideration of the context of a clause in dispute, and particularly in this matter, the text of the Agreement viewed as a whole, and the disputed provision’s place and arrangement. The definition of shift worker follows the definition of shift work. It would ordinarily follow that the definition of shift worker should mean somebody who is defined as working shift work. Within the definitions clause of the Agreement it states:
“For the purpose of this Agreement, the following definitions will apply unless there is a contrary intention indicated.” [my emphasis]
[63] I conclude that the Agreement’s definition of shift work requires an employee to rotate between day and afternoon shift, or day and night shift, or day, afternoon and night shift, or alternatively, work their ordinary hours on a fixed afternoon or night shift. Further, it requires the employee to regularly work weekends and public holidays.
[64] That the definition of shift worker immediately follows the definition of shift work is telling. It demonstrates that they are distinct matters, and it was contemplated that a shift worker may predominantly work a day shift. The conditions in which shift work can be worked in clause 6.4 of the Agreement also include the working of day shift on a Saturday or Sunday. Specifically, clause 6.4.6 and 6.4.7 of the Agreement provide for an appropriate shift work penalty to be paid on the Saturday and the Sunday respectively. Clause 6.4.6 is not read down to mean that because the shift work that is worked on a Saturday, and not including the next day, Sunday, does not constitute shift work. Clearly, it means that the work performed on the Saturday only, where the employee does not work the next day, even though it is shift work, an appropriate penalty is paid.
[65] The same is true when the members of the afternoon shift are required to work a Sunday shift; in accordance with clause 6.4.7 they are a shift worker undertaking shift work on a Sunday, and will be paid an appropriate penalty rate for the work performed. The definition of shift work in clause 1.7.7 is not read down on account of the employee working Sunday in that particular week, and not Saturday as well.
[66] There is vast inconsistency between clauses 1.7.7 and 1.7.8 and their relationship to other clauses within the Agreement, as demonstrated above. In the example above, an employee need not meet a hurdle of working, as is submitted, both Saturday and Sunday for at least 34 weekends per year to be entitled to be paid shift work allowances for the work performed by them on either a Saturday or Sunday, but not both. On a strict interpretation of ‘shift work’ in clause 1.7.7, that is how it would be necessary to read clauses 6.4.6 and 6.4.7, but that would be an absurd outcome. It has not been adopted by the Respondent. It pays to its employees a shift work penalty whenever they perform work on either the Saturday or Sunday, and there is no requirement for them to work both Saturday and Sunday, or more regularly than every two weeks in each four-week cycle.
[67] I note that at no time has the Respondent ever informed its employees of its position in this matter; that in accordance with the roster, no employee can meet the Respondent’s understanding of achieving five weeks’ annual leave. It has not been discussed, it seems, as it appears never to have been raised by employees or by the AWU. I make no criticism of any of the parties on this issue, and note that in accordance with principle 15 in Berri, the absence of a complaint by the employees or the AWU relevant to this issue is insufficient to establish that there had been a common understanding on the issue.
[68] I did, however, inform the parties that I was not particularly pleased that given this issue appeared not to have been raised by the Respondent with employees during bargaining for the 2013 and 2016 Agreements, it was therefore not addressed in the material prepared by the Respondent for the Commission’s consideration in deciding to approve the Agreement. The Respondent’s understanding as to eligibility of the additional weeks’ annual leave was not raised a as a potential consideration when the better off overall test (BOOT) analysis was being undertaken by the Commission.
[69] I agree with the Respondent’s contention at [27] as to what, pursuant to clause 1.7.7 it means to perform shift work, as opposed to the Respondent’s submissions that it equates to them being a shift worker. I agree that clause is clear and unambiguous. The Respondent has, at [27], detailed all the scenarios required in order to perform shift work. It does not correlate, however, that the definition of shift worker follow, as is clear in the earlier examples of a Saturday and Sunday penalty rate applying even where it is impossible for those employees performing ‘shift work’ to meet all of the criteria at clause 1.7.7, yet the penalty is paid.
[70] I conclude that clause 7.2.1 has been drafted to link to the definition of shift worker in clause 1.7.8, and it is not necessary, nor is it appropriate to have regard to the distinct definition in clause 1.7.7 to what constitutes shift work. I have given appropriate consideration to the context of the relevant clauses within the Agreement.
[71] I determine that to be entitled to five weeks’ annual leave per annum, an employee simply be an employee who may be required to undertake day, afternoon and/or nightshift and includes an employee who regularly works a day shift, as per the definition within clause 1.7.8 of the Agreement.
[72] Accordingly, it does not matter that an employee work only Saturdays, or only Sundays, and not both. I find that it is not necessary to determine whether, on average, 26 days per annum on a Saturday or a Sunday satisfies the employee ‘regularly working weekends’.
Conclusion
[73] For the reasons expressed above, I have determined the answers to the dispute as follows in bold below each of the questions:
Having particular regard to clauses 1.7.7, 1.7.8 and 7.2.1 of the Parmalat Australia Pty Ltd (Nambour Operations) Enterprise Agreement 2016 (the Agreement):
Are employees who work ordinary hours between 6am and 6pm Monday to Friday and (on average) every second Saturday, ‘Shift Workers’ pursuant to clause 7.2.1(a) of the Agreement?
Yes
Are employees who work ordinary hours on fixed afternoon shifts rostered Monday to Friday and (on average) every second Sunday, ‘Shift Workers’ pursuant to clause 7.2.1(a) of the Agreement?
Yes
Are employees who work ordinary hours fixed night shifts rostered Monday to Friday and (on average) every second Saturday, ‘Shift Workers’ pursuant to clause 7.2.1(a) of the Agreement?
Yes
COMMISSIONER
Appearances:
Santellises A, on behalf of the Applicant.
Aspromourgos A, on behalf of the Respondent.
Hearing details:
31 October 2019, Brisbane.
Printed by authority of the Commonwealth Government Printer
<PR717986>
1 [2015] FWCFB 5619.
2 PN85; PN89.
3 Exhibit R1 at paragraphs 38 to 40.
4 Ibid at paragraph 46.
5 Ibid at paragraphs 47 to 53.
6 Outline of Submissions on behalf of the Respondent, filed 18 October 2019, paragraphs 21 to 24.
7 Ibid at paragraph 67.
8 Ibid at paragraph 55.
9 [2015] FWC 2461.
10 [2019] FWC 2502.
11 [2017] FWCFB 3005 at [114].
12 PN229.
13 [2013] FWCA 6162.
14 [2017] FWCFB 3005 at [114].
15 [2017] FWCFB 4487.
16 [2014] NSWCA 184 at [71] – [85].
17 Manufacturers’ Mutual Insurance Ltd v Withers (1988) 5 ANZ Ins Cas 60-853 at 75-343.
18 Kirin-Amgen Inc v Hoechst Marion Roussel Ltd [2004] UKPC 6; [2005] 1 All ER 667 at [64].
19 Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [78].
20 Charter Reinsurance Co Ltd v Fagan [1997] AC 313 at 391 per Lord Hoffman, approved in Campbell v R [2008] NSWCCA 214; 73 NSWLR 272 at [48] (Spiegelman CJ, Weinberg AJA and Simpson J agreeing)
21 Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; 76 NSWLR 603 at [17] cited in Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 310 ALR at [71] – [85].
22 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165 at [40].
23 Kucks v CSR Limited (1996) 66 IR 182 at 184.
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