Transport Workers' Union of Australia v Saputo Dairy Australia

[2020] FWC 1271

[2020] FWC 1271

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

Transport Workers’ Union of Australia
v
Saputo Dairy Australia
(C2019/1674)

DEPUTY PRESIDENT COLMAN MELBOURNE, 10 MARCH 2020

Dispute arising under an enterprise agreement – interaction of shift and public holiday penalties – interpretation of enterprise agreement – dispute determined

[1] This decision concerns an application made by the Transport Workers’ Union of Australia (TWU) under s 739 of the Fair Work Act 2009 (Act) for the Commission to deal with a dispute in accordance with the dispute settlement procedure in clause 14 of the Murray Goulburn Co-Operative Co. Limited Milk Collection Employees and Transport Workers’ Union Enterprise Agreement 2016 (2016 Agreement). The Agreement applies to employees of Saputo Dairy Australia Pty Ltd (Saputo) who work at the company’s sites in Victoria listed in Appendix 3 of the Agreement. The employees concerned are employed as truck drivers who collect fresh milk from farms and deliver it to the company’s processing facility.

[2] The dispute concerns the interaction of the shift work and public holiday provisions in clauses 28.2 and 37 of the Agreement. The union contends that employees who perform shift work on a public holiday must be paid the shift penalties in clause 28.2 in addition to the applicable public holiday loading in clause 37. The company’s position is that the public holiday loadings are exclusive and that shift penalties are not payable.

[3] It was common ground, and I agree, that the dispute has been progressed through the steps in the dispute resolution procedure in clause 14 of the Agreement, and that the Commission is empowered to arbitrate the dispute.

[4] The parties’ written submissions frame the question for determination in somewhat different terms, however it was agreed at the hearing that the question I should determine was whether ‘the company has an obligation under the 2016 Agreement to pay employees who perform early morning, afternoon or night shift on a public holiday the shift penalty provided in clauses 28.2.1 and 28.2.2 and the public holiday penalty in clause 37.’

Factual background

[5] The dispute has something of a long history. The provisions that are at issue in the present matter were contained in the immediate predecessor to the 2016 Agreement, the Murray Goulburn Co-Operative Company Limited Transport Employees Enterprise Agreement 2013 (2013 Agreement),and in the agreement that preceded the 2013 Agreement. Until 2012, the company’s practice had been to pay employees working shifts on a public holiday both the relevant public holiday loading and the applicable shift penalty. When the company ceased this practice, the TWU brought a dispute before the Commission under the dispute settlement provision in the 2013 Agreement. The parties’ contentions in that matter were essentially the same as their positions in the present matter.

[6] Following conciliation before Commissioner Gregory in the course of 2015, the parties agreed to settle the dispute. I understand that the parties maintained their respective positions as to the correct interpretation of the 2013 Agreement but resolved to compromise on the payments that would be made to relevant employees.

[7] In a brief unsworn statement submitted to the Commission, Mr Daryl Coghill, TWU organiser, said that around the time of the settlement of the earlier dispute, the company indicated to the union that, in its log of claims for the 2016 Agreement, it would put forward a clause to be inserted in the agreement that would expressly state that shift penalties were not payable on public holidays. Mr Coghill said in his statement that the company did not ultimately make any such claim in relation to the new enterprise agreement.

[8] In my view, this historical background does not assist in the determination of the present dispute. If the resolution of the first dispute had entailed an agreement as to the correct interpretation of the interaction of the relevant clauses in the 2013 Agreement, this may have been relevant to the common understanding of the company and the union about the interpretation of analogous provisions in the 2016 Agreement. However, there was no such agreement.

[9] I do not consider relevant Mr Coghill’s evidence of what the company said about its bargaining intentions around the time the first dispute was settled. The union appeared to suggest that the company’s failure to pursue a new provision confirming its interpretation amounted to a concession that the union’s interpretation should stand. However, the company may simply have decided that no such provision was necessary. The union did not seek to confirm its own interpretation through a new provision in the new agreement. The positions adopted by the parties in the lead up to and during enterprise bargaining negotiations are not relevant to the interpretation of an enterprise agreement, except to the extent that they might bear out a common understanding. The text of the enterprise agreement is the starting point and usually the finishing point for resolving an interpretative dispute such as the present.

The provisions in dispute

[10] Clause 28.2 of the Agreement concerns shift work. It reads as follows:

“28.2 Shift Workers

Early morning shift means any shift that commences before 5.30 a.m.

Afternoon shift means any shift that finishes after 6.00 p.m.

Night shift means any shift that finishes after 12.00 Midnight.

28.2.1 The Company must pay employees working early morning or afternoon shifts fifteen per cent more than ordinary rates whilst the employees are working on either of those shifts.

28.2.2 The Company must pay employees working night shift 20 per cent more than ordinary rates whilst the employees are working on that shift.

28.2.3 In addition to the night shift penalty prescribed at sub clause 28.2.2 employees who work night shifts on Saturday or Sunday nights, or the Christmas Day, or Boxing Day public holidays as prescribed in sub clause 36.1.1, will be paid an additional flat payment of $15.00 for each such night shift worked. This payment is not all purpose.”

[11] Clause 37 deals with public holidays and is set out below. Particular attention should be paid to clause 37.1.9 and the provisions that follow it, which deal with payments for working on various public holidays.

“37. PUBLIC HOLIDAYS

37.1 An employee on weekly hiring is entitled to public holidays on the following days:

37.1.1 New Year’s Day, Australia Day, ANZAC Day, Good Friday, Easter Saturday, Easter Monday, Christmas Day and Boxing Day; and

37.1.2 The following days, as prescribed in the relevant States, Territories and localities:

Queen’s Birthday, Easter Sunday, Grand Final Eve, Melbourne Cup and Labour Day.

37.1.3 When Christmas Day is a Saturday or a Sunday, a holiday instead of that day will be observed on 27 December.

37.1.4 When Boxing Day is a Saturday or a Sunday, a holiday instead of that day will be observed on 28 December.

37.1.5 When New Year’s Day or Australia Day is a Saturday or Sunday, a holiday instead of that day will be observed on the next Monday.

37.1.6 Where in a State, Territory or locality, public holidays are declared or prescribed on days other than those set out in Clause 37.1, those days will constitute additional holidays for the purpose of this agreement.

37.1.7 By agreement between the Company and the majority of employees in the relevant enterprise or section of the enterprise, an alternative day may be taken as the public holiday instead of any of the prescribed days.

37.1.8 The Company and an individual employee may agree to the employee taking another day as the public holiday instead of the day which is being observed as the public holiday in the enterprise or relevant section of the enterprise.

37.1.9 For all time worked by a weekly employee on such holidays payment will be made at the following rates:

37 .1.10 On Good Friday and Christmas Day - double time;

37.1.11 On any other holiday - ordinary time and a half.

37.1.12 When Christmas Day (25 December) falls on a Saturday or Sunday, employees who work on that day shall be paid the following rates:

(a) Saturday- double time

(b) Sunday- double time and a half.

37.1.13 Payment for work on a holiday is in addition to any amount payable in respect of the weekly wage. If an employee is required to work on a holiday during hours which, if the day were not a holiday, would be outside the range of ordinary working time as mentioned in Clause 28- Hours of work, the employee will be paid for those hours at the rate of double time.

37.1.14 When any of the public holidays prescribed by this agreement occurs on a rostered day off, the employee will be given within four weeks following the date on which such a public holiday occurred:

(a) one extra day’s pay; or

(b) time off in lieu thereof; or

(c) one day will be added to the employee’s annual leave.

37.1.15 A casual employee working on a holiday will be paid at the rate of double time. The minimum payment will be equivalent to four hours’ work.

37.1.16 In addition to the payment prescribed in Clause 37.1.15, casuals must also be paid the additional rate prescribed by Clause 16.5 for working on a holiday.

37.1.17 Where a weekly employee is entitled to any holiday prescribed by this agreement, the Company must notify the employee on the working day immediately before the holiday whether his or her services are required on that holiday. If such notice is not given, the employee will be entitled to take such holiday without deduction of pay.”

Submissions of the parties

[12] The TWU contends that the shift penalties prescribed in clause 28.2 apply to employees undertaking shift work irrespective of whether such work occurs on a public holiday or a day that is not a public holiday. It says that clauses 28.2.1 and 28.2.2 state that the company ‘must pay’ employees working early morning, afternoon and night shift 15% and 20% more respectively than ordinary rates while they are working on those shifts. Clause 28.2 contains no exception or exclusion in relation to shifts falling on a public holiday.

[13] The union relies on clause 28.2.3 in support of its contention that shift penalties apply in conjunction with public holiday loadings. It says that this clause creates a separate obligation on the company to pay night shift penalties, together with a $15 payment, for employees working night shift on weekends, Christmas Day and Boxing Day. It says that the wording of the clause assumes that the shift penalties will apply on public holidays and demonstrates that shift penalties are intended to interact and apply together with the public holiday loading provisions.

[14] The union submits that, while clauses 37.1.9 to 37.1.12 entitle employees to be paid the applicable holiday loadings ‘for all time worked’, this does not detract from their right to receive the shift penalties under clause 28.2. It contends that nothing in these or any other provisions of the Agreement disengages the shift penalties during a public holiday, or otherwise suggests that shift penalties and public holiday loadings do not apply in conjunction with one another. It says that on the contrary, clause 37.1.13 provides that payment for work on a holiday ‘is in addition to any amount payable in respect of the weekly wage’, which in the union’s submission picks up the shift penalties payable under clause 28.2.

[15] The TWU further submits that clause 29 is significant in understanding the interaction between clause 28.2 and 37.1. Clause 29 states that the minimum rate to be paid for ordinary hours of work on Saturday and Sunday is time and a half and double time respectively. The clause then states: ‘The extra rate is in substitution for and not cumulative upon the shift premium prescribed in clause 28.2.4 and 28.2.5’. 1 The union contends that there is no analogous provision expressly stating that shift penalties do not apply in conjunction with public holiday loadings, and that this creates an inference that no analogous limitation was intended.

[16] The company contends that, read in context, clauses 28.2 and 37.1 require employees undertaking shift work on public holidays to be paid at the public holiday rate, and that shift penalties are not payable. It says that shift penalties do not apply to work performed on public holidays because clause 37.1.9 provides that ‘payment will be made’ at relevant loaded rates for particular holidays for ‘all time worked’. It says that these are the relevant loadings for work performed on a public holiday, and that they make no provision for adjustment to take into account shift penalties.

[17] The company submits that its interpretation is in keeping with the penalty structure of the Agreement, whereby shift penalties do not apply when other loadings are payable. In this regard, shift penalties do not apply in conjunction with weekend penalties, as is expressly stated in clause 29; and they do not apply in conjunction with overtime payments, because clause 32.2.1 sets out overtime penalties that apply in respect of ‘all work’ performed outside ordinary hours.

[18] The company further contends that the structure of clause 37 supports its interpretation. The clause specifically deals with overtime payment on public holidays (clause 37.1.13) and with payments for casuals (clause 37.1.16) but makes no provision for shift penalties. The company says that clause 37.1.13 tells against the union’s interpretation, rather than assisting it, because the clause provides that the public holiday loading ‘is in addition to any amount payable in respect of the weekly wage’, and clause 4 states that the ‘weekly wage’ is ‘to the exclusion of overtime earnings, shift premiums, attendance bonus, incentive earnings under any system of payment by results, fares and travelling time allowances, penalty rates and other ancillary payment payable by the company’ (emphasis added).

[19] Finally, the company contends that the relevant clauses have been incorporated from historical awards and that there is a general presumption that industrial instruments will not allow for ‘double penalties.’ It submits that the union’s interpretation runs counter to this principle.

Consideration

[20] In my view, it is clear from the terms of clause 28.2 and clause 37, read in the context of the Agreement as a whole, that shift penalties are not payable on shifts worked on a public holiday, other than cases when the exception in clause 28.2.3 may be engaged.

[21] First, the starting point is to consider the provisions which create the entitlement to shift penalties. Clauses 28.2.1 and 28.2.2 state that the company must pay employees working the prescribed shifts the relevant percentage ‘more than ordinary rates’ while the employees are working those shifts. These provisions do not prescribe an absolute entitlement to payment of a particular quantum whenever they work shifts. They do not state that, in recognition of performing shift work, employees are to be paid a shift allowance of an additional 15% or 20%. Instead they provide for a relative entitlement: employees must be paid 15% or 20% ‘more than ordinary rates.’

[22] When employees perform shift work on a public holiday, they receive the public holiday loading that applies under clause 37 to the particular holiday in question, which is at least 150% of the ordinary rate. The company complies with the obligation to pay 15% or 20% more than ordinary rates for shift work by observing the requirement under clause 37 of the Agreement to pay the relevant public holiday penalties. For example, an employee who works afternoon shift on Boxing Day is paid a loading of 150% under clause 37; this exceeds ‘15% more than the ordinary rate’.

[23] The wording of the shift penalty provision may be contrasted with other provisions in the Agreement dealing with loadings, which are absolute, not relative. Clause 32.2.1, which concerns payment for overtime, states that ‘for all work done outside ordinary hours, the rates of pay will be’ those appearing in the subparagraphs that follow. And the public holiday payment provision in clause 37.1.9 states that ‘for all time worked’ on public holidays payment ‘will be made at the following rates’.

[24] Secondly, clause 37.1.9 and its interaction with clause 28.2 is to be considered and construed in the context of the public holiday clause as a whole. Clause 37.1 contains a very detailed statement of the payments that are to be made to employees who work on public holidays. It prescribes different loadings that apply to different public holidays. It also deals directly with various payments other than public holiday loadings. In particular, it deals with other situations where loadings are payable. It prescribes payments that will apply to overtime worked on a public holiday (second sentence of clause 37.1.13). And it sets out rates for casual employees who work on a public holiday (clause 37.1.15). The clause does not however make any provision for shift work that is performed on a public holiday. Moreover, the first sentence of clause 37.1.13 addresses other ‘amounts payable’ in respect of the weekly wage, to which I return below. The clause also deals with the treatment of rostered days off falling on a public holiday, which can entail an extra day’s pay.

[25] In my view clause 37 is a comprehensive statement of the payments associated with public holidays, save for the exception contained in clause 28.2.3, to which I shall return. The omission of any reference to shift penalties in the context of such a detailed public holiday provision is a clear indication that such penalties were not intended to be payable. In any event, as I have said above, the entitlement to payment for shift work is a relative entitlement, which is met by the company paying the public holiday loading.

[26] Thirdly, clause 37.1.9 is a more specific provision than clause 28.2. It prescribes a particular rate of pay for the dozen or so public holidays each year, whereas clause 28.2 deals generally with the rate of pay for the performance of shift work throughout the year. Even if clause 28.2 did establish a separate and absolute rate for the performance of shift work, rather than a relative rate, it would, in accordance with accepted principles of interpretation, be displaced by the more specific provision that categorically prescribes ‘the rate’ for work performed on a public holiday. In this regard, I note the statement of the Full Bench in Berri to the effect that an overly technical approach to the principles of interpretation should be avoided. 2 However, in this setting, I do not invoke a maxim or formal presumption of statutory interpretation; I simply observe, as a matter of common sense and ordinary English usage, that a rule that is expressed to apply in a specific situation is likely to be intended to prevail over a rule of more general application, if they are in conflict. It is clear that clause 28.2 prescribes a rate for shift work, and that clause 37 prescribes a rate for public holidays. While a person can receive multiple concurrent allowances, there can only be one rate of pay at a given time. Here, the specific rate for public holidays applies to the exclusion of the general rate for shift work.

[27] Fourthly, in my view the treatment of overtime on public holidays confirms that the scheme of the public holiday provision in clause 37 is to create a ceiling on penalties for public holiday work, not a compilation of otherwise applicable penalties. Clause 37.1.9 states that for all time worked on the public holidays set out in the following clauses, employees will be paid a particular loading, which ranges from time and a half (the general rate), through double time (Good Friday and Christmas) to double time and a half (when Christmas falls on a Sunday). The second sentence of clause 37.1.13 provides that overtime worked on a public holiday is paid at double time. Thus, on ordinary public holidays, an employee working overtime receives an amount that is more than the normal public holiday loading of time and a half, but less than an amount that would reflect the holiday loading plus the ordinary non-public holiday overtime rate, which under clause 32 starts at time and a half. That is, an employee does not receive triple time, which would be the accumulation of the ordinary public holiday rate and the ordinary overtime rate. And on Good Friday and Christmas Day (including when Christmas Day is on a Saturday), the overtime rate is the same as the ordinary public holiday rate; there, an employee receives no more for working overtime on those days. This payment framework is one which applies a maximum loading, rather than an accumulation of individual penalties. This is consistent with a conclusion that shift penalties do not apply to work performed on a public holiday.

[28] Further contextual support for the conclusion that shift penalties are not payable for work performed on a public holiday is found when one considers the treatment of shift penalties in other situations where loadings otherwise apply. It is clear that shift penalties are not payable in respect of time worked outside ordinary hours: the overtime provision in clause 32.2.1 states that for ‘all work’ performed outside ordinary hours, ‘the rates of pay will be’ those specified in the clause, ranging from time and a half to triple time. Further, clause 29 states explicitly that weekend penalties are ‘in substitution for and not cumulative upon the shift premium’. Shift penalties are not payable in these other ‘loaded’ contexts. Again, in such situations, the applicable weekend or overtime loading will far outstrip what would have been the shift premium; employees will be paid in excess of 15% or 20% of the ordinary rate of pay.

[29] What of the union’s contention about the ‘negative inference’ arising from clause 29? That provision explicitly states that weekend penalty rates are in substitution for and not cumulative upon shift penalties. There is no corresponding express statement that shift penalties are not payable on public holidays. Further, one might ask, if clause 28.2 provided only a ‘relative’ entitlement to shift penalties, why is the exclusion in clause 29 necessary, given that the weekend rates exceed the shift penalties and the company could comply with both by paying only the former.

[30] I note that clause 29 commences by stating that the minimum rates to be paid for Saturday and Sunday work are time and a half and double time respectively. The framers of the Agreement may have apprehended some concern that, without the clarification in the second sentence of clause 29 that weekend loadings displace shift premiums, some question might arise as to whether both weekend and shift penalties were in fact payable, because weekend loadings are only minimum rates. Further, clause 29 is a very brief provision which contains two sentences, one prescribing weekend rates, the other containing the exclusion for shift penalties. As I have explained, clause 37 is a very different provision, containing an array of payment provisions that are to apply on a public holiday.

[31] Both parties sought to rely on the first sentence of clause 37.1.13, which states that public holiday payments are ‘in addition to any amount payable in respect of the weekly wage’. The union contended that shift penalties are other ‘amounts payable’ in respect of the weekly wage, and that they are therefore paid in addition to the ‘public holiday payments’ in clause 37. But clause 37.1.13 only preserves payments that are otherwise payable – it does not render payable a payment that does not apply. For the reasons given above, the shift penalty provisions do not confer an entitlement to an additional 15% or 20% on whatever the relevant payment is at the time; they require employees to be paid 15 or 20% above the ordinary rate of pay. Further, clause 37 prescribes the holiday rate, which displaces the ordinary shift rate. Shift penalties are not an ‘amount payable’ for the purpose of clause 37.1.13. Further, the first sentence of clause 37.1.13 would be a very indirect and improbable way for the parties to have provided for shift penalties to be payable for work performed on public holidays, particularly when clause 37.1 deals directly with other situations where loadings apply.

[32] On the other hand, I do not accept the company’s contention that clause 37.1.13, and the definition of ‘weekly wage’ which excludes shift penalties, resolves the matter in its favour. The company’s contention reads clause 37.1.13 as though it stated that public holiday payments were in addition to any amount payable as part of the ordinary weekly wage. But the clause does not say this. It states that payment for work on a holiday is in addition to any amount payable ‘in respect of’ the weekly wage, which is different from the weekly wage itself. Moreover, clause 37.1.13 clearly denotes that the holiday payment is in addition to certain other payments. At issue is not the rate of pay, but other discrete payments. What payments might they be? Clearly, an employee working on a public holiday might be entitled to a meal allowance in accordance with clause 23.3. This would be an ‘amount payable’ in respect of the weekly wage. The first sentence of clause 37.1.13 makes clear that the employee is still to be paid this meal allowance. It is not subsumed or displaced by the public holiday loading provided for in clause 37.1.

[33] This brings us to clause 28.2.3. For the union, this clause suggests that the parties had assumed that shift penalties would be applicable to work performed on all public holidays: it specifically states that the night shift penalty will apply to work done on Christmas Day and Boxing Day, and that in addition employees will receive $15 for each shift worked. The company contended that clause 28.2.3 is directly contrary to clause 29, which states explicitly that weekend penalties apply and are in substitution for shift penalties, and that it is also contrary to the general way in which the shift penalty and public holiday provisions interact. At the hearing, I asked the company what meaning it attributed to the opening words of the clause (‘in addition to the night shift penalty in clause 27.2.5’). As I understand it, the company’s interpretation would not attribute any meaning to these words. However, I do not consider that this reference can simply be put to one side. It seems unlikely to me that the introductory words in the provision have been included by mistake, although I note that the provision contains some errors in its cross-references to other clauses.

[34] In my view, the ordinary meaning of the words of clause 28.2.3, read in the context of the provisions discussed above, is that they provide for an exception in relation to the payment of shift penalties, for night shift only, and in relation to the particular days referred to in the subclause. Whereas ordinarily shift penalties do not apply in conjunction with weekend or public holiday penalties, a special arrangement applies to night shift worked on Saturday or Sunday, and on Christmas Day or Boxing Day. On such shifts, the night shift penalty is applicable, and in addition employees receive $15.00 for each shift worked. Exactly how the night shift penalty would apply on a particular public holiday might be the subject of some debate. On one view, on Christmas Day, when the public holiday loading is paid, the ‘relative’ loading for night shift penalty of 20% is still satisfied by the payment of the holiday loading; but where another day is substituted for or adopted as the Christmas day public holiday (see clauses 37.1.3 and 37.1.7), no public holiday loading would apply on Christmas day and therefore the night shift penalty of 20% above the ordinary rate would have to be paid.

[35] It is not necessary for me to address how the exception in clause 28.2.3 applies. The parties were very clear that the significance of clause 28.2.3 is confined to its relevance for determining the question of how the shift penalties in clause 28.2 interact with the public holiday loadings in clause 37.1. It is sufficient to conclude that clause 28.2.3 provides for an exception to the general interaction between the shift penalty provision and the public holiday clause. I appreciate that a clearly drafted exception might have been expected to commence with the circumstances that form the exception. By commencing with the words ‘in addition to the night shift penalty prescribed at clause 28.2.2’, the reader has the impression, as at the end of that phrase, that the night shift penalty is already engaged and applies generally. But in substance the clause is concerned with night shift worked on particular days, when, exceptionally, the night shift penalty may apply (when ordinarily on weekends and public holidays it could not apply); and employees will also receive $15 per shift.

[36] Finally, in my view there is no general principle that penalties should not be paid on penalties, at least in so far as the interpretation of enterprise agreements is concerned. The negotiating parties can make whatever bargain they wish. Interpreting the terms of the enterprise agreement that reflects that bargain involves analysing the relevant text. I note that the modern award that would otherwise apply to the employees in question, if they were not covered by the Agreement, is the Road Transport and Distribution Award 2010 (Award). Clause 24.8 provides that the rates prescribed for weekend and public holiday work by that clause are paid instead of the shift allowances prescribed under clause 24.2 of the Award. However, this does not presumptively have any interpretative significance, and I do not consider that it affects the correct interpretation in this case. The answer to the parties’ question is ascertainable on the plain words of the Agreement, read in context.

Conclusion

[37] The answer to the question posed by the parties for determination by the Commission is as follows:

Question: ‘Does the company have an obligation under the 2016 Agreement to pay employees who perform early morning, afternoon or night shift on a public holiday the shift penalty provided in clauses 28.2.1 and 28.2.2 and the public holiday penalty in clause 37?’

Answer: No, other than cases where the exception in clause 28.2.3 may be engaged.

DEPUTY PRESIDENT

Appearances:

J Cooney for the Transport Workers’ Union of Australia
M Danaher and S Kopel for Saputo Dairy Australia Pty Ltd

Hearing details:

2020
Melbourne
27 February

Printed by authority of the Commonwealth Government Printer

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 1   This cross-referencing is clearing erroneous and is obviously intended to refer to clauses 28.2.2 and 28.2.3.

 2   [2017] FWCFB 3005 at [114], paragraph 6