The Australian Workers' Union v Parmalat Australia Ltd
[2014] FWC 7640
•28 OCTOBER 2014
| [2014] FWC 7640 |
| FAIR WORK COMMISSION |
RECOMMENDATION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
The Australian Workers' Union
v
Parmalat Australia Ltd
(C2014/4052)
Food, beverages and tobacco manufacturing industry | |
SENIOR DEPUTY PRESIDENT RICHARDS | BRISBANE, 28 OCTOBER 2014 |
Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)] - accrual of annual leave.
Summary - whether employees entitled to 5th week of annual leave - definitions of shift worker and shift work- construction of agreement - mutual objective intention - notional terms and conditions - whether preservation is grandfathering - day shift workers and overtime
[1] This matter concerns a dispute between those members of The Australian Workers Union (“the AWU”) who are employees of Parmalat Australia Ltd (“the employer”) and who are covered by the Parmalat Australia Ltd and - Brisbane Operations Enterprise Agreement 2012 (“the Agreement”) and the employer about the quantum of annual leave to which employees are entitled.
[2] The employees represented by the AWU in this matter perform duties relating to production and distribution. There are other employees as well who perform maintenance work, or perform duties in relation to Depots. These other employees are not in dispute with the employer (though they are cited in the various documents to which reference is made below).
[3] The parties (the employees through the AWU and the employer) have conferred on me by their mutual agreement an authority to make a recommendation in relation to this dispute, which has been on foot for some time.
The Issues
[4] There are a number of issues, broadly construed, in contention, and they include the following:
1. Does an employee employed as a shift worker need to perform shift work (as defined in the Agreement) in order to be paid an additional week’s annual leave each year?
2. To what class of employees do the Notional terms and Conditions as agreed apply?
3. Can employees accrue up to one additional week’s annual leave by pro rata overtime arrangements (up to and beyond 425 hours)?
[5] The issues are made somewhat more complicated as the Agreement reflects a preferential shift roster system that has emerged over time, which has created additional classes of shift workers (such as day shift workers, who are distinguishable from shift workers, as defined).
[6] It is the class of day shift workers who are mostly affected by the AWU claim. These employees would retain their access to the 200% weekend overtime penalty and paid crib breaks but also receive an additional week of annual leave as well (by virtue of the definition of “shift worker at clause 1.7.10 of the Agreement, which is set out below) or else by way of the operation of Schedule 1 of the Agreement - all of which are set out below).
[7] In order to investigate these issues (and to determine if there is an objective mutual set of facts supporting one interpretation or another) it is necessary first of all to consider the terms of the Agreement, then to consider those terms in the wider context of the Agreement.
Relevant provisions of the Agreement
[8] Clause 1.7 of the Agreement provides the relevant definitions, and includes definitions of a “shift worker” and “shift work”:
1.7 Definitions
For the purpose of this Agreement, the following definitions will apply unless there is a contrary intention indicated.
1.7.1 "Parmalat' means Parmalat Australia Ltd.
1.7.2 "Parties" means Parmalat, Unions and the employees covered by this Agreement.
1.7.3 "Unions" mean the employee organisations set out in Clause 1.2.
1.7.4 "Day worker' means an employee engaged to work during the spread of ordinary day hours from 6:00 am to 6:00 pm Monday to Friday and who cannot be required by the employer to work ordinary hours on an afternoon or night shift.
1.7.5 "Day shift worker' - means an employee who regularly works a day shift roster, but who can be required by the employer to work either an afternoon or night shift roster with seven days notice or a lesser period if agreed between the employee and the employer. A day shift worker is a shift worker for all purposes of this agreement.
Note: Existing day shift workers will not be displaced by day workers for the life of this agreement.
1.7.6 "Afternoon shift' means any shift finishing after 6.00 pm and at or before midnight.
1.7.7 "Night shift' means any shift finishing after midnight and at or before 8.00 am or any shift commencing at or after midnight and before 5:30 am (employees covered by the Milk Treatment, Milk Products Manufacture, and Milk Etc. Distribution Award - South-Eastern District) OR before 3:00 am (Milk Industry Transport Award - Southern Division)
1.7.8 "Continuous shift work" means ordinary hours of work that is continuous 24 hours per day, 7 days per week.
1.7.9 "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.
1.7.10 "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.
1.7.11 "Production employees" means operations and distribution employees engaged at a classification within the production classification structure.
[...]. [My emphasis]
[9] The annual leave provisions in the Agreement provides as follows:
7.2 Annual Leave
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.
Notwithstanding the above, employees can accrue additional annual leave as set out in Schedule One - Notional Terms & Conditions as at 30 June 2012.
[...].
[10] Schedule One - Notional Terms & Conditions as at 30 June 2012 (“the Schedule”) was a document that was agreed by the parties as part of the Agreement negotiations and was intended to be a schedule to the Agreement. It appears the document was not submitted with the Agreement when it was subject to the approval process. The parties jointly agreed that the document represents an objective, agreed fact held in common between them and further articulates the entitlements due under the Agreement.
[11] The Schedule provides as follows:
The purpose of this correspondence is to record the terms and conditions of employment that the parties to the Parmalat Australia Ltd and - Brisbane Operations Enterprise Agreement 2012 agree are currently enjoyed by Parmalat employees.
Background
Parmalat has asked representatives of the respective unions on site (AWU, AMWU, ETU, TWU, PSU) to document existing terms and conditions currently in place at the Parmalat South Brisbane site that are not documented in the 2009 - 2012 Parmalat (South Brisbane) EBA. Parmalat has requested this information be provided on the basis that the terms and conditions currently experienced by existing employees shall not be diminished as a result of the provision of this information.
Preservation
The terms and conditions of employment listed below will be preserved for the life of this agreement, unless otherwise agreed between the parties.
Annual Leave Accrual
To be preserved for current employees (excluding maintenance & depots employees).
- There are currently two methods of accruing an additional one week to annual leave (up to a maximum of five weeks leave):
● Where the employee is employed on shift work over a period of seven days per week; or
● Where the employee works greater than or equal to 425 overtime hours per year
To be preserved for current maintenance employees:
There are currently the following methods of accruing additional weeks of annual leave:
● Employees may accrue an additional one week leave where the employee is employed on shift work over a period of seven days per week;
● Employee may accrue an additional one week leave by working 425 overtime hours per year or pro rata for hundred and 25 hours to depart 1week added. (sic)
● There is also opportunity for make its employees to crew additional leave due to the conditions that apply to 12 hour maintenance employees covered in the document "Brisbane public holiday payments" prepared by the company 17.07.2012. Specifically#3 in this document... "If a public holiday falls on a non-– rostered day, credit of 12 hours single time is added to the annual leave balance"
To be preserved for current Depots employees:
Annual leave entitlements are eight weeks\pa comprising (seven weeks accrued and one week paid in January):
● 2 weeks for not having IPOs
● One week due to the overtime hours worked during the year
● 4 weeks standard annual leave
● One week which was agreed to 6 - 9 years ago
[12] I hasten to add at this point that the AWU contend that it was inadvertently omitted from Schedule 1 as otherwise agreed that current employees to whom Schedule 1 applies also were intended to be in receipt of pro rata annual leave in respect of overtime hours worked up to and in excess of 425 hours. The AWU suggests that the pro rata entitlement should form part of Schedule 1 as it reflects custom and practice over time.
[13] The employer disagreed with this claim in so far as it requested the information from the AWU as to all custom and practice arrangements for inclusion in Schedule 1 and the AWU did not at the time the information was provided make any reference to pro rata arrangements. The employer therefore contends that pro rata arrangements were not a matter that formed part of the Agreement as made, and was not an issue relevant to the bargain as reached.
Views on construction
[14] The AWU contends that clause 7.2.1 as set out above indicates that “every employee (other than a casual employee) shall be entitled to 5 weeks annual leave “if employed as a shift worker”.
[15] Clause 1.7.10 of the Definitions stipulates that a "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.
[16] In effect, therefore, this means that Monday to Friday (preferred) day shift workers, who perform paid overtime at the double penalty rate on weekends and receive paid crib breaks when so doing, but do not work shift work on weekends or public holidays on a regular basis, will also receive an additional fifth week of annual leave per annum despite not performing any shift work as defined (i.e. regular shifts on weekends and public holidays). Under previous agreements, Monday to Friday day shift workers did not receive this (additional) entitlement.
[17] The AWU contended that the inclusion of the definition of shift worker in the Agreement was a negotiated outcome that reflected the desire on the part of the employer to introduce a higher level of flexibility in relation to shift work. That is, the Agreement provides that employees can have their shift changed without agreement if they are given the required amount of notice. This is why clause 1.7.10 refers to the inclusion of the term “may” in the definition of shift worker (see above).
[18] The AWU contended further that this outcome was specific to the Agreement and had not been a term or condition of employment in the previous “2009 agreement” (as it was referred to). The definition of shift worker in the Agreement also departs from the definition of shift worker in the Food, Beverage and Tobacco Manufacturing Award 2010 (“ the Modern Award”), which provides as follows:
34.3 Definition of shift worker
(a) that the purpose of the additional weeks of annual leave provided for in s.87(1)(b) of the Act, the shiftwork is a seven day shift worker who was regularly rostered to work on Sundays and public holidays.
(b) where an employee with 12 and continuous service is engaged the part of the 12 month period at a seven day shift worker, that employee must have their annual leave increased by half a day of each month the employee is continuously engaged as a seven day shift work.
[19] The AWU conclude that all employees (other than casuals) are entitled to an extra week’s annual leave because they are employed as shift workers and either perform shift work as defined or are exposed to the exercise of the employer's discretion to direct them to undertake shift work at a future time. I add at this point that the employer does not currently employ any day workers.
[20] The AWU does not agree that the Agreement includes any grandfathering provisions and that consequently, there was no mutual objective intention to include such terms. I will incorporate the AWU’s detailed arguments and views in these regards in the following exposition.
[21] The employer contends that by way of schedule 1, grandfathering was given effect in the Agreement. Schedule 1, the employer explained, was compiled by the parties in order to document hitherto undocumented terms and conditions of employment in respect of which current employees were in receipt and to ensure that they (the terms and conditions) were visible and able to be grandfathered.
[22] The relevant provision from Schedule 1 is as follows:
To be preserved for current employees (excluding Maintenance & Depots employees).
- There are currently two methods of accruing an additional one week to annual leave (up to a maximum of five weeks leave):
● Where the employee is employed on shift work over a period of seven days per week; or
● Where the employee works greater than or equal to 425 overtime hours per year
[23] The employer contends that Schedule 1 is a consequence of preserving or grandfathering the above stipulated method of accruing additional annual leave for current employees (who therefore remain unaffected by the terms of the Agreement).
[24] Further to this, the employer disagrees with the AWU that the effect of clause 7.2.1 (a) of the Agreement and clause 1.7.10 of the Agreement (the definition of shift worker) can be read in isolation to clause 1.7.9 of the Agreement (the definition shiftwork). That is, a shift worker it can only be an employee who performs shift work, which is defined as follows:
1.7.9 "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.
[25] Clause 7.2.1 (a) of the Agreement was amended by the AWU (to read as it currently reads) by way of an amended version of the Agreement e-mailed to the employer by the AWU on 10 August 2012.
[26] The employer (through Mr Paul Lorimer, the employer’s Northern Region Manufacturing Manager) sought confirmation, it says, from the AWU (through AWU Organiser Mr David Groessler) as to their common understanding of these amended provisions by way of an e-mail exchange dated 15 August 2012.
[27] The e-mail exchange in this regard is set out immediately below:
Email from David Groessler to Paul Lorimer, 15 August 2012
Paul,
Yes, as per previous discussions regarding the interpretation of both the existing practices at Parmalat, the MA/FWA definition of a 'shift worker' and the principle that this EA is not intended to remove award conditions, but to also preserve above award entitlements for existing employees, the proposed agreement confers an additional weeks leave for those new employees (existing ones retain an either/or benefit) who are regularly rostered to work weekends and public holidays (including rostered overtime on these days).
This proposed definition is consistent with both the above principles and Parmalat's stated intention of moving from a Mon-Fri roster system to a 7-day week operation, and is intended to remove ambiguity regarding leave accruals based on the amount of overtime worked by an individual in a calendar year.
Regards,
David
On 15/08/2012, at 11:35 AM, "Lorimer, Paul" <[email protected]> wrote:
David
Would like to clarify the intent of one of the clauses in the latest agreement Clause 7.2.1 regarding annual leave..... "shall for each year of service be entitled to annual leave as follows:- a) 190 hours (5 weeks) if employed as a shift worker"
We understand the intent of this clause to be that a shift worker is a person who engages in shift work and therefore (as per the definition 1.7.9) includes "regularly working weekends and public holidays"
Do you concur?
Paul Lorimer 1 Northern Region Manufacturing Manager
[28] Mr Groessler’s reference to the “either \or” entitlement for current employees is a reference to Schedule 1, which states that “existing” employees are entitled to five weeks annual leave when employed on shift work, or where they perform no less than 425 hours of overtime, whilst new employees enjoy an additional week’s leave when they “are regularly rostered to work weekends and public holidays (including rostered overtime on these days).”
[29] The employer contends that Mr Groessler’s reply endorses its interpretation that the additional week’s annual leave applied only to employees who regularly work shift work and weekends and public holidays, with the only exception being that existing employees who retained the “either\or entitlement” referred to above.
[30] Mr Groessler’s reply is also consistent with Schedule 1 in so far as that Schedule made no reference to pro rata accrual of an additional week’s annual leave, and instead required employees to work (an absolute number of) 425 overtime hours per year in order to obtain the additional week’s annual leave (other than where they performed regular shift work on weekends public holidays). This differentiated the entitlement of the new employees from those who were current or existing employees.
[31] In essence therefore, the employer contends that the difference between current and new employees is (only) that the current employees retain access to an additional week’s annual leave when working overtime up to and in excess of 425 hours - which is an arrangement that affects Monday to Friday day shift workers only (given the employer does not employ any day workers).
[32] Other than in this regard, the entitlements to annual leave are the same for new and current employees (putting aside the Maintenance and Depot employees who are not included in this dispute). That is, apart from access to an additional one week’s annual leave for reason of the quantum of overtime completed annually, both new and existing employees may access an additional week’s annual leave if they are regularly performing shift work, as defined, or when they work 425 hours of overtime or more (with pro rata arrangements to apply otherwise).
[33] The AWU contends that this interpretation is incorrect in so far as Schedule 1 functions to preserve existing entitlements and is supplementary to entitlements available under the Agreement. That is, Schedule 1 preserves for the benefit of all employees entitlements to annual leave where:
● the employee is employed on shift work over a period of 7 days per week; or
● the employee works greater than or equal to 425 hours of overtime per year (with pro rata arrangements to apply); and
● an employee is employed as a shift worker (under clause 1.7.10 and clause 7.2.1 of the Agreement).
Consideration
Clauses read in isolation
[34] I think that clause 7.2.1 of the Agreement and clause 1.7.10 of the Agreement, when read in isolation, can reasonably suggest that an employee who is employed as a shift worker and is exposed to being directed to perform shift work (as defined) on a regular basis “may” be entitled to a fifth week of annual eave per annum, despite not working shift work (and having access to double time overtime on weekends and paid crib breaks).
[35] That is, the clauses, when read on their face, suggest that an employee may have an entitlement to an additional week’s annual where they are employed as shift workers and may be required to perform shift work. The AWU contends, therefore, that, the employees do not need to regularly perform shift work as defined clause 7.1.9 of the Agreement in order to obtain an additional week’s annual leave.
Clauses read in context - with Schedule 1
[36] But it is necessary to construe the entitlement to annual leave not in isolation but in context, having regard to the entirety of the Agreement. (See Short v Hercus Pty Ltd (1993) 40FCR 511 at 518 and the summary provided by French J in City Of Wanneroo v Australian Municipal, Administrative , Clerical and Services Union [2006] FCA 813 [53])
[37] It is when this approach to construction is applied that the AWU position presents difficulties.
[38] It appears firstly that if the Schedule and the Agreement are applied in the manner pressed by the AWU there would be no necessity for Schedule 1 to apply at all as every (relevant) employee would be in receipt of five weeks of annual leave under clause 7.2.1 of the Agreement. This is because the employees were employed as shift workers pursuant to the definition of shift work in clause 1.1.10 of the Agreement. The preservation of prior entitlements by way of Schedule 1 of the Agreement and the attendant machinery provisions would be redundant.
[39] Thus, there would be no point to Schedule 1 if the AWU’s interpretation of the Agreement were to be true - this is because all employees would receive the additional week’s pay irrespective of whether or not they performed shift work (as Schedule 1 requires) or were performing at or above the specified amount of overtime (as Schedule 1 requires).
[40] This strikes me as being an unlikely construction of the Agreement as it affords Schedule 1 of the Agreement no actual work to carry out in the context of the Agreement (and therefore does not express all elements of the bargain).
[41] A more likely construction that affords Schedule 1 an opportunity to affect the operation of the Agreement is that Schedule 1 is indeed a preserved set of arrangements that applies to existing employees (as they were at the time the Agreement was negotiated and made). And as such, the Schedule differentiates the entitlement of the existing employees in that it serves to preserve or grandfather terms and conditions of employment to a discrete class of employees.
[42] True it is that the schedule was edited to remove many references to grandfathering in what was otherwise a dense text, but whether by so doing the purposes of the Schedule ceased to preserve or grandfather terms and conditions is another thing.
[43] The Schedule, which was agreed by the parties, states relevantly as follows:
Preservation
The terms and conditions of employment listed below will be preserved for the life of this agreement, unless otherwise agreed between the parties.
Annual Leave Accrual
To be preserved for current employees (excluding maintenance & depots employees).
- There are currently two methods of accruing an additional one week to annual leave (up to a maximum of five weeks leave):
● Where the employee is employed on shift work over a period of seven days per week; or
● Where the employee works greater than or equal to 425 overtime hours per year [my emphasis]
[44] It seems to follow to me as a basic construction derived from the plain meaning of the words of the Schedule is that it performs a positive role in the Agreement, which is to preserve the prescribed entitlements for the current employees (as they were then). This is especially so by reference to the following words of the Schedule: To be preserved for current employees [...].
[45] As I discussed above, this construction of the Agreement is also preferred for reasons that it gives work for the Schedule to perform in the context of the operation of the Agreement. If this approach were not adopted the Schedule would not serve to preserve anything (despite that being its express intention) for reasons that entitlement to a fifth week of annual leave was exclusively derived by reference to the annual leave clause (clause 7.1.10 of the Agreement).
More deliberate structure of agreement
[46] It also appears to me that a much more deliberate structure for the Agreement (by which I mean a construction that reflects the bargain and which affords both the clauses and the Schedule work to do) is as follows.
[47] That is, current employees will retain two avenues by which they can accrue an additional week’s annual leave - that is by working shift work on a regular basis, or where they have access (as “day shift workers” as they were to become) to overtime on weekends, which can give rise an accumulation of the requisite number of (425) overtime hours.
[48] I should indicate that day shift workers - and it appears to have been accepted by both parties, are those employees who perform a day shift between Monday - Friday (only) and who have access to weekend overtime paid at 200% penalty and who also receive paid crib breaks.
[49] Schedule 1 of the Agreement also illuminates the operation of the Agreement in relation to clause 7.2.1 of the Agreement.
[50] If Schedule 1 of the Agreement preserved conditions of employment on the stated terms, then clause 7.2.1 of the Agreement could not extend reasonably an additional week’s annual leave to any employee employed as a shift worker (regardless of whether or not they ever performed shit work).
[51] This is because the result would be that the Schedule would limit the entitlement to an additional week’s annual leave for current employees on the basis that they performed regular seven days per week shift work or else performed the necessary quantum of overtime hours. But new employees, by contrast, would receive an additional week’s overtime regardless of whether or not they performed overtime.
[52] The only way to avoid this construction is to require the Schedule to apply to all relevant employees as the AWU urges. But in doing so, of course, it is necessary to suspend the preservation function of the Schedule (which is expressed in its plain terms). And in applying this approach - as explained above - the entitlements referred to under the Schedule lose any operative meaning in the context of the Agreement.
[53] It is more so the case therefore, that (perhaps in an effort to reduce the long-term continuation of local arrangements as Mr Groessler suggests in the 15 August 2012 email above) employee access to overtime and accumulated additional annual leave was circumscribed, in that it was preserved for current employees, whilst new employees would revert to the industrially conventional arrangement by which seven day per week shift work would attract an additional week’s annual leave per annum only.
[54] The AWU construction, as pressed, seeks to gloss over this construction of the Agreement on the grounds that every employee has access to an additional week’s annual leave (by way of clause 7.2.1 of the Agreement). Schedule 1 of the Agreement therefore performs the role only as a vessel for some historical information and has no role to play otherwise.
[55] Further, if it is accepted (as I accept it does) that Schedule 1 of the Agreement preserves specified terms and conditions of employment in relation to annual leave, then those terms and conditions of employment are incompatible with a construction of the Agreement that allows for clause 7.2.1 of the Agreement to extend an additional week’s annual to employees who do not regularly perform shift work (as defined in the Agreement).
[56] Again, this is because Schedule 1 is based on additional annual leave being available when an employee performs regular shift work, whilst clause 7.2.1 of the Agreement purports to extend annual leave to all relevant employees regardless of whether they regularly perform 7-day a week shift work or not. This would result in an industrially absurd construction of the Agreement.
Apparent extraneous evidence - email exchanges
[57] There are other reasons why I have preferred to the above construction of the Agreement.
[58] The e-mail exchange between Mr Groessler and Mr Lorimer buttresses the construction set out immediately above. On the face of the email exchange, Mr Groessler advances his view of the intention of the Agreement in response to Mr Lorimer’s query that the Agreement extends an additional week’s annual leave to new employees who performed regular shift work on weekends and public holidays that preserves an either/or option for existing employees.
[59] Mr Groessler, on the face of the emails, agreed that:
“the proposed agreement confers an additional weeks leave for those new employees [...] who are regularly rostered to work weekends and public holidays (including rostered overtime on these days).” [my emphasis]
[60] And Mr Groessler added that “existing [employees] retain an either/or benefit”, which is reflective of the preservation of two avenues by which additional annual leave is accrued through Schedule 1 of the Agreement.
[61] The 15 August email exchange, it appears, also came after the first ballot for an agreement had been lost, and directly concerns the mutual objective understanding the parties were seeking to express about the role in the Agreement of the amended clause 7.2.1 of the Agreement (in the context of the Schedule).
[62] There is a further e-mail exchange (dated 3 August 2012) between Mr Groessler and Mr Jason Fraumano, Sales Manager for the employer, in which Mr Groessler refers to his agreement discussions with the employer being for the purpose “that the intention of the parties was to codify current above award payments and to preserve them for existing employees”. This e-mail exchange provides some evidence of limited scope that the AWU considered that schedule 1 was to perform a function as preservation machinery in relation to the wider application of the Agreement.
[63] At this point it is best to indicate that other than in respect of the immediately above observations, I relied on the text of the Agreement of the basis of construing the entitlement to annual leave.
[64] There is, however, a deal of extraneous evidence of various kinds to which varying weight could be attributed to which I was taken both directly and indirectly.
[65] The e-mail exchange between Mr Groessler and Mr Lorimer is a document of some significance as it set out the views of two of the relevant protagonists. But equally, the content of that email exchange has not been subject to examination through the evidence of the authors of the exchange.
[66] The standing of the email evidence would fall away if the parties expressed some further qualifications etc. That is, the emails would not express any objective mutual intention and I would have been required to rely only upon the reasoned construction of the Agreement as set out earlier.
[67] I do add that the AWU argued through Mr Groessler’s further claims (at least in the form of a statutory declaration that went unexamined given the nature of the proceedings) that its members had concerns in respect of shift changes allegedly introduced in the Agreement because:
● Traditionally Monday to Friday employees would be forced to work 7 day rosters with no access to weekend overtime;
● The loss of overtime on weekends would mean that fewer employees would have access to the custom and practice that employees who work overtime may access an additional week’s annual leave;
● This would be particularly so if employees who had previously worked Monday to Friday were required to work a Monday to Sunday roster.
[68] Mr Groessler contended that the change in wording of the Agreement had the effect of ensuring that employees who had previously accessed an additional one week’s annual leave by performing equal to or more than the requisite amount of overtime (425 hours in a calendar year) would be defined as “day shift workers” under the Agreement and therefore would be entitled to an additional one week’s leave.
[69] Mr Groessler concluded that it followed that employees could access an additional one week’s annual leave when:
● Performing the minimum number (425 hours) of overtime hours;
● Being defined as a shift worker (including day shift worker) under the Agreement; or
● Working in a depot where preserved conditions applied.
[70] Mr Groessler’s declaration was not contemporary with the making of the Agreement and was unexamined for the purposes of the procedure requested of me.
[71] In any event, I am unsure what the value of Mr Groessler’s evidence might come to be given that it reveals only a subjective view of the construction of the Agreement and as such does not eliminate the mutual objective intent or in some other way support a set of mutually objective facts upon which the construction of the Agreement could be based.
[72] Even if Mr Groessler’s evidence had been admitted into evidence it would in no way be determinative of the construction of the Agreement, and it would need to be reconciled with the construction I have raised above.
Employer and AWU conduct - no claim pressed and no new entitlement offered
[73] There is other conduct on the part of both the employer and the AWU which forms the relevant circumstantial matrix in this matter.
[74] There is no evidence in any of the materials - at least as put before me - that the AWU ever made a claim for an additional week’s annual leave for an employee who does not readily perform shift work on weekends and public holidays. There is no claim in its log in this respect.
[75] Equally, there is no material generated on the part of the employer that communicates that it intended as part of its proposed agreement package that it intended to offer an additional week’s annual leave on such terms.
[76] The only public communication about the Agreement package by the employer that was put before me is as follows:
PARMALAT BRISBANE ENTERPRISE AGREEMENT 2012-2015
PACKAGED PROPOSAL FROM PARMALAT- SEPTEMBER lOTH 2012
1. The term of the agreement shall be 3 years:July 15 2012- June 30th 2015
2. Wage increases of 10.8% over 3 years paid as below (Compounded):
• 2% at first pay period after July 30th once the majority of employees have voted in favour of the agreement
• 1.6% at first full pay period on or after 1January 2013
• 2% at first full pay period on or after 1July 2013
• 1.6% at first full pay period on or after 1January 2014
• 2% at first full pay period on or after 1July 2014
• 1.6% at first full pay period on or after 1January 2015
3. Confirmation of terms and conditions (that have not previously been documented in the EBA) to be confirmed in a separate schedule of the agreement.
4. Written confirmation from Parmalat that "existing day shift workers will not be displaced by day workers, for the life of this agreement".
5. New Classification Structure which consolidates the new and the old classification structures and provides an incentive for employees to train.
6. Confirmation that existing employees have first preference for the allocation of overtime on the basis that OHS considerations are adhered to.
7. Updated Travel and Inconvenience Clause for employees permanently transferred to a new location of work.
8. Updated Superannuation clause to allow choice of fund for employees.
9. Consolidated EBA ,incorporating the existing EBA and all the relevant clauses from the old Awards into one combined document.
10. Agreement that through the life of the agreement, Parmalat will employ
1 Mechanical Apprentice and 1 Electrical Apprentice.
11. Leading Hand Allowances to increase by SO%.
12. Cool room allowance modified to allow payment for 6th day and increased to $2.50/day or $3.75 (for 12 hour shifts).
13. Laundry Allowance increased to $22.50/week.
14. Confirmation that casual and agency employees will be paid the same as permanent Parmalat employees.
15. Part Time Employment clause which allows flexibility in averaging rostered hours by mutual agreement.
16. Public Holiday Clause which clarifies obligations from both Parmalat and it's employees. [sic] Focus on early communication, fairness in rostering and allowing reasonable requests,(on reasonable grounds),to have the day off. [sic]
17. Repayment of Money Clause which provides employees with protection, when they have been overpaid, as to the agreed timing and method of repayment.
18. Rostering Guidelines which clarify the process of how shifts are structured and paid. Payment guidelines for 12 hour shifts documented.
19. Develop a policy in relation to Transition to Retirement within the first 12 months of this agreement.
20. Employees taking annual leave shall now have the option of utilising:
● Projected earnings
● Average earnings
● 17.5% loading
[77] There is no express evidence before me that the AWU ever possessed a relevant claim. It also strikes me as unusual as well that if such a significant new entitlement (to an additional week’s annual leave regardless of whether annual is leave is performed regularly) was to be offered (and which would come at a cost of some $400,000 per annum to the employer) the new entitlement was not advanced by the employer as a reason for encouraging its employees to make the Agreement.
[78] I say this knowing that the Agreement was not voted up on its first vote, and that a second agreement making process had to be undertaken.
[79] In neither the lead up to the first vote or in respect of the second vote does it appear that there was any proposition advanced that an additional entitlement to annual leave was to be introduced. The email exchange of 15 August 2012 would reasonably have asserted such a claim (coming as it did after the failed first ballot), but no reference is made there to a new claim.
[80] The AWU contends that the employer expressly communicated that the additional, new entitlement to an additional week’s annual leave was to be an element of the bargain. It is difficult to see from where there is evidence that might be adduced given the e-mail exchange between Mr Groessler and Mr Lorimer (set out above). But at this juncture, that is evidence that was not before me.
Was new entitlement an exchange for new flexibility?
[81] The AWU argued that the main change in the Agreement from its predecessor reflected a change in the employer’s operations. That change was that the employer instead of conducting a Monday to Friday operation with overtime on weekends sought to conduct a Monday to Sunday operation, and this warranted a changed approach to the entitlement to additional paid leave (albeit not expressly pressed at any point). This perspective is reflected in Mr Groessler’s declaration referred to above.
[82] There are some difficulties with this contention.
[83] The prior 2009 agreement refers to the pre-existent State awards (or notionally approved State awards). That is, the Agreement refers to State awards (such as the Milk Treatment, Milk Products Manufacture and Milk Distribution Award – South-Eastern District 2003 Award Qld) which appeared to include terms that stipulate that employees may have the method of working the 38 hour week altered by the giving of seven days notice by the employer.
[84] That is, the inclusion in the Agreement of a discretion vested in the employer to alter the pattern of work, is not a new term or condition of employment, but is one that existed in the prior 2009 agreement (though it is articulated in a different manner).
[85] Fundamentally, the employer contended that the Agreement did not allow it to exercise any new discretionary authority over its employees than it had been able to exercise in any previous time: the circumstances of the Agreement do not therefore demonstrate the provision of a significant new benefit in exchange for a concession in relation to an enhanced or new flexibility in relation to shift operations.
[86] The employer asserted that no new flexibility was introduced into the Agreement at all - the employer simply maintained a pre-existing prerogative. In the course of the proceedings, the AWU also only argued that it was the inclusion of the new (amended) clause 1.7.10 that was the major change in the Agreement, not the inclusion of a new claim by the employer in respect of which the new (or amended) clause was an offset or exchange.
[87] Thus, in respect of the state of the evidence as it was before me, nothing appears to have changed in the way in which shift work was organised and directed between the 2009 agreement and the 2012 agreement. The only difference is that it appears to have emerged over time that the employer sought to constrain access to (by grandfathering) the availability of an additional week’s overtime through the accumulation of overtime hours (which are all paid for at double time it appears). This was the work of schedule 1 to the Agreement.
[88] Of course, the AWU argued, in the end, that there does not need to be an express, new claim to be made by the employer in order for the entitlement to be available. It argued, as it has done from the start, that the words of clause 1.7.10 and clause 7.2.1 of the Agreement warrant the universal availability of an additional week’s annual leave regardless of whether or not the employees performed shift work (as defined under s.1.7.9 of the Agreement).
Conclusion
[89] On the basis of the materials as put before me I do not construe the Agreement as providing for an additional week’s annual leave for employees who do not perform regular shift work on weekends and public holidays. There is no entitlement to any employee to such additional annual leave other than where they perform shift work in accordance with clause 1.7.9 of the Agreement:
1.7.9 "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.
[90] The Agreement does preserve for existing employees (as they were), access to additional annual leave based upon the accumulation of a prescribed quantum of overtime. But this is an absolute entitlement and is not a pro rata entitlement. The Agreement makes no reference to pro rata arrangements and cannot be taken to have been part of the bargain the parties struck.
[91] Schedule 1 of the Agreement does not apply to employees more broadly. Rather, it applies to existing employees only (and for all practical purposes to those existing employees who were preferred Monday to Friday day shift workers only).
Further determinative hearing
[92] It is possible that a more comprehensive hearing of the evidence in this matter could lead to a different finding. However, the prospect of any new evidence of weight emerging appears elusive. I strongly suspect that at the end of the examination process in relation to such evidence, parties will be left with competing subjective views about the intention of the Agreement.
[93] That is, given the arguments to date and the various exchanges between the AWU and the employer, the evidentiary matrix is unlikely to further illuminate mutual objective intentions, or an objective factual framework that is markedly different to that considered above.
[94] If the employer referred to shift workers having access to additional annual leave (as the AWU assert), it is most likely to be in the context in which Mr Groessler confirmed the terms on which additional annual leave was accessible.
[95] In short, witness evidence is unlikely to adduce any, new objective facts. In short, the witness evidence may not travel further, in the end, than I have here identified.
[96] It is, of course a matter for the parties to determine their respective responses to this recommendation.
Additional concessions
[97] The employer made a statement at the closing of the proceedings that it was disposed to extend an offer to employees in relation to pro rata arrangements for accruing an additional week’s annual leave in respect of accumulated over time. The authority vested in me by the parties is exhausted by my findings in respect of the appropriate construction of the Agreement and I was not invited to make wider recommendations. Because of this, I can only leave this proposal with the employees and their representatives for response to the employer.
SENIOR DEPUTY PRESIDENT RICHARDS
Appearances:
Ms C Woodhouse of the AWU for the Applicant
Mr A Aspromourgos, Solicitor for the Respondent
Hearing details:
2014.
20 October.
Brisbane.
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