United Voice v Wilson Security Pty Ltd

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FEDERAL COURT OF AUSTRALIA

United Voice v Wilson Security Pty Ltd [2018] FCA 1215

File number: ACD 58 of 2017
Judge: TRACEY J
Date of judgment: 16 August 2018
Catchwords: INDUSTRIAL LAW – award interpretation – consideration of the correct construction of the Security Services Award 2010 – whether an employee, who is rostered to work for more than the maximum span of ordinary hours, only starts to work overtime for the purposes of the payment of overtime loadings once he or she has worked the full range of ordinary hours and not before
Legislation:

Fair Work Act 2009 (Cth) ss 186(2)(d), 193(1), 545(1), 739

Fair Work (Registered Organisations) Act 2009 (Cth)

Cases cited:

Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241; [2005] HCA 10

Australian Communication Exchange Ltd v Deputy Commissioner of Taxation (2003) 77 ALJR 1806; [2003] HCA 55

Award Modernisation Decision – Decision – Full Bench [2008] AIRCFB 1000

City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426; [2006] FCA 813

Construction, Forestry, Mining and Energy Union v John Holland Pty Ltd (2010) 186 FCR 88; [2010] FCAFC 90

Harland v MSS Security Pty Ltd [2013] FWC 8064

Kucks v CSR Limited (1996) 66 IR 182; [1996] IRCA 141

Liquor, Hospitality and Miscellaneous Union v Chubb Security Australia Limited [2009] AIRC 4

Re Steel Works Employees (Australian Iron and Steel Limited) Conciliation Committee (1941) 40 IR 445

United Firefighters’ Union of Australia v Metropolitan Fire and Emergency Services Board (2006) 152 FCR 18; [2006] FCAFC 84

United Voice (Qld Branch) v MSS Security Pty Ltd (2017) 266 IR 231; [2017] FWCFB 651

University of New South Wales (Professional Staff) Enterprise Agreement 2010 [2010] FWAA 9588

Date of hearing: 8 March 2018
Registry: Australian Capital Territory
Division: Fair Work Division
National Practice Area: Employment & Industrial Relations
Category: Catchwords
Number of paragraphs: 55
Counsel for the First and Second Applicants: Mr O Fagir
Solicitor for the First and Second Applicants: United Voice
Counsel for the Respondent: Mr A Moses SC with Ms V Bulut
Solicitor for the Respondent: National Workplace Lawyers

ORDERS

ACD 58 of 2017
BETWEEN:

UNITED VOICE

First Applicant
NORMAN DAVIS
Second Applicant
AND:

WILSON SECURITY PTY LTD

Respondent

JUDGE:

TRACEY J

DATE OF ORDER:

16 AUGUST 2018

THE COURT ORDERS THAT:

1.The application be dismissed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


REASONS FOR JUDGMENT

TRACEY J:

  1. This application raises questions relating to the proper construction of an award, made under the Fair Work Act 2009 (Cth) (“the FW Act”). That award is the Security Services Award 2010 (“the Award”).

  2. The proceeding is brought by an organisation registered under the Fair Work (Registered Organisations) Act 2009 (Cth), United Voice (the first applicant), and one of its members, Mr Norman Davies (the second applicant).

  3. The respondent in this proceeding, Wilson Security, is a respondent to that Award. 

  4. The applicants…

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Details
Case
[2018] FCA 1215
Decision Date

CaseChat Overview and Summary

The dispute in United Voice v Wilson Security Pty Ltd involved the interpretation of the Security Services Award 2010, specifically regarding the timing of overtime loadings for employees who work beyond the maximum span of ordinary hours. The case was heard by the Australian court, where the key issue was whether an employee only starts to work overtime for the purposes of the payment of overtime loadings once they have completed the full range of ordinary hours, or if overtime loadings can be applied earlier. The court considered the relevant provisions of the Award, including those related to ordinary hours and shift rosters, and the employer's discretion in rostering arrangements. The court also examined the principles of award construction, noting that awards should make sense according to the basic conventions of the English language and should be interpreted generously, but not in a manner that disregards industrial realities. The court concluded that the Award did not contain any express restrictions on the employer's discretion in rostering arrangements and that the ordinary language of the Award permitted the employer to allocate overtime hours before the employee had completed the full range of ordinary hours. The court dismissed the application, finding that the employer was not required to wait until the employee had completed the full range of ordinary hours before paying overtime loadings.

Orders

Orders of the court

1. The application be dismissed.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

In order to resolve these differences it will be necessary to refer to the relevant provisions of the Award in some details. Before doing so, however, some more needs to be said about the circumstances in which the application has come to be made.THE BACKGROUND FACTS Those circumstances are not controversial. Wilson Security employs security guards. Mr Norman Davis is an employee of Wilson Security and a member of United Voice. The terms and conditions of employment, at relevant times, were regulated by the Award. Because of the nature of the work, undertaken by security guards, the Award, relevantly permitted Wilson Security to promulgate a roster which contained 152 ordinary hours of work within a roster cycle of four weeks: see cl 21.1(a)(iii). The guards employed by Wilson Security, or some of them, are rostered so as to provide security coverage for clients 24 hours a day, seven days a week. That level of coverage is achieved by rostering guards on seven shifts per fortnight, each of 12 hours’ duration. The roster repeats every four weeks and “flips” every fortnight — that is, the day shifts in the first fortnight are night shifts in the second fortnight and vice versa. Prior to 31 October 2016 Wilson Security had constructed the roster for Mr Davis such that overtime rates were not payable until he had worked his full complement of ordinary hours. The roster was then changed to operate in a manner which has given rise to the present proceeding. In order to understand the nature of the variation it will be convenient to set out Mr Davis’s revised roster and then to explain the effect of the variation. Mr Davis’s roster, in tabular form, was promulgated as follows: Under Mr Davis’s old rostering arrangement the Sunday shifts, worked by him, fell within the first 152 hours in each roster cycle. “Overtime” hours were worked (as to six hours in each) in shifts 13 and 14. These two six hour periods were paid as overtime. After 31 October 2016, Wilson Security varied the roster such that the overtime hours, formerly allocated to shifts 13 and 14 were transferred to shifts 5 and 12 which fell on Sundays. Wilson Security thereupon ceased to pay the overtime penalty in respect to part of those shifts because they already attracted the Sunday loading.RELEVANT CLAUSES OF THE AWARD The Award provisions of present relevance appear in Part 5 which is entitled “Hours of Work and Related Matters”. Clause 21 deals with ordinary hours and shift rosters. Relevantly it provides:21.Ordinary hours of work and rostering 21.1 Ordinary hours and roster cycles(a)The ordinary hours of work are 38 hours per week, or where the employer choses to operate a roster, an average of 38 hours per week to be worked on one or more of the following bases at the discretion of the employer:(i)76 hours within a roster cycle not exceeding two weeks;(ii)114 hours within a roster cycle not exceeding three weeks;(iii)152 hours within a roster cycle not exceeding four weeks; or(iv)304 hours within a roster cycle not exceeding eight weeks.(b) …21.2 Shift duration(a) Ordinary time shifts must be limited in duration to:(i)for casual employees – a minimum of four and a maximum of 10 ordinary hours;(ii)for full-time employees – a minimum of 7.6 and a maximum of 10 ordinary hours; and(iii)for part-time employees – a minimum of one fifth of the employee’s agreed weekly hours or four hours (whichever is the greater) and a maximum of 10 ordinary hours.(b)Notwithstanding clause 21.2(a), by agreement between the employer and the majority of employees concerned in a particular establishment, ordinary working hours exceeding 10 but not exceeding 12 hours per shift may be introduced subject to:(i)proper health monitoring procedures being introduced;(ii)suitable roster arrangements being made;(iii)proper supervision being provided;(iv)adequate breaks being provided ;and(v)an adequate trial or review process being implemented where 12 hour shifts are being introduced for the first time.(c)…(d)Clause 21.2(b) is not intended to prevent an employer implementing 12 hour rosters through the use of regular rostered overtime (subject to the requirements in s.62 of the Act in relation to the right of an employee to require reasonable overtime) or individual flexibility arrangements made pursuant to clause 7 – Award flexibility.21.3 Break between successive shiftsEach ordinary time shift must be separated from any subsequent ordinary time shift by a minimum break of not less than eight hours.21.4 Long breaks(a)An employee must be given separate long breaks of continuous time off work in each roster cycle as follows:

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

This passage was quoted with approval by two members of the High Court in Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 at 271, 282-283; [2005] HCA 10 at [96] (Kirby J), [129]-[130] (Callinan J). Shortly afterwards these principles were restated by French J in City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426 at 440; [2006] FCA 813 at [57]:It is of course necessary, in the construction of an award, to remember, as a contextual consideration, that it is an award under consideration. Its words must not be interpreted in a vacuum divorced from industrial realities — City of Wanneroo v Holmes (1989) 30 IR 362 at 378-379 and cases there cited. There is a long tradition of generous construction over a strictly literal approach where industrial awards are concerned — see eg George A Bond & Co Ltd (in liq) v McKenzie [1929] AR (NSW) 498 at 503-504 (Street J). It may be that this means no more than that courts and tribunals will not make too much of infelicitous expression in the drafting of an award nor be astute to discern absurdity or illogicality or apparent inconsistencies. But while fractured and illogical prose may be met by a generous and liberal approach to construction, I repeat what I said in City of Wanneroo v Holmes (at 380):Awards, whether made by consent or otherwise, should make sense according to the basic conventions of the English language. They bind the parties on pain of pecuniary penalties.See also: Construction, Forestry, Mining and Energy Union v John Holland Pty Ltd (2010) 186 FCR 88 at 111-113; [2010] FCAFC 90 at [90]-[92] (Logan J); United Firefighters’ Union of Australia v Metropolitan Fire and Emergency Services Board (2006) 152 FCR 18 at 26; [2006] FCAFC 84 at [51]-[53] (Nicholson, Jacobson and Lander JJ).RELATED DECISIONS OF INDUSTRIAL TRIBUNALS In supporting its construction argument United Voice placed some reliance on the decision of the Full Bench of the Fair Work Commission (“the FWC”) in United Voice (Qld Branch) v MSS Security Pty Ltd (2017) 266 IR 231; [2017] FWCFB 651. The issue in MSS Security was whether a Commissioner had erred in finding that an enterprise agreement passed the better off overall test (“the BOOT test”): see ss 186(2)(d) and 193(1) of the FW Act. This required a comparison between the relevant Award provision and the related provisions in the agreement with a view to forming “an impressionist assessment” of whether or not employees would be better off were the agreement to be approved and become operative: see University of New South Wales (Professional Staff) Enterprise Agreement 2010 [2010] FWAA 9588 at [96]. The Commissioner had approved an enterprise agreement which provided for the allocation of overtime to Sundays regardless of where in the roster those hours fell. United Voice challenged the approval on the basis that the “allocation” provision would permit the employer to avoid payment of the overtime penalties which would otherwise be payable under the Award. As a result, the union contended, the enterprise agreement did not leave employees better off overall compared to the Award and could not be approved.

Ratio Decidendi

Legal Principle Established

None of these decisions is, of course, binding on the Court. They do, however, provide assistance in understanding the long and ongoing discord between unions and employers about the proper construction and application of the Award.CONSIDERATION The issue raised by the present application is more concerned with what are said to be implied limitations on the application of certain provisions of the Award than with the verbiage of the Award itself. There may well be cases in which it is appropriate to read in words of limitation in an award. Such may be the case where, for example, there has been an established and mutually agreed understanding of the manner in which certain provisions will operate. This is not such a case. The decisions of the FWC and its predecessor, to which reference has been made, establish that the construction issues involved in this case have been agitated for over the past decade without definitive resolution. Conflicting views have been expressed by members of industrial tribunals who have been called on to adjudicate in these ongoing disputes. It is very difficult to read the decision in MSS Security as supporting the existence of an unstated premise that employers were precluded, by the Award, from allocating overtime hours to shift periods prior to the worker’s completion of the full complement of ordinary hours. This is so, particularly, when it is borne in mind that the Full Bench:·Did not, in its reasons, deal with the construction issues presently under consideration, despite them having been specifically raised by the respondent MSS Security.·Made no reference to authorities relating to the principles of award construction.·Failed to distinguish or overrule Harland.·Did not refer to Chubb Security and the observations of the Full Bench in the Award Modernisation Decision. The Award provides for ordinary hours (that is, 38 hours per week) to be averaged over two, three, four or eight week roster cycles “at the discretion of the employer”: cl 21.1(a). It also provides for additional payments for the working of overtime hours: cl 23.3. Rostering arrangements are within the discretion of the employer. Consistently with the existence of this discretion the Award does not contain any express restrictions on the exercise of that power. In particular it is open to an employer:·to choose the day on which a roster is to begin;·to decide whether overtime hours can be included in the roster at a point before which all ordinary hours have been worked;·to decide on the number of days on which ordinary hours can be worked; and·to fix the number of days of the week on which ordinary hours are to be worked (subject to the limitations prescribed by cls 21.3 and 21.4). Absent such express restrictions, the ordinary and natural language of the Award, in my view, permits an employer to act in the manner in which the respondent has done in the present case. The language employed by the draftsman of the Award does not compel the reading in of the kind of restrictions contended for by United Voice. Nor is this rendered necessary in order to ensure the effective operation of the Award provisions. Decisions of industrial tribunals of long standing have favoured contrary constructions. The catalyst for the present application would appear to have been the more recent decision in MSS Security. For the reasons explained above at [48] I do not consider that that decision assists United Voice’s construction arguments in the present proceeding. What these conflicting decisions highlight is the absence of any clearly understood and mutually accepted understanding of the operation of the rostering provisions and the allocation of overtime to Sundays. Given these circumstances it is all the harder to support the implication of terms in the Award which do not appear.