United Workers' Union v Ensign Services (Aust) Pty Ltd T/A Linen Services Australia
[2023] FWC 1097
•21 JUNE 2023
| [2023] FWC 1097 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.739—Dispute resolution
United Workers’ Union
v
Ensign Services (Aust) Pty Ltd T/A Linen Services Australia
(C2022/8183)
| DEPUTY PRESIDENT BELL | MELBOURNE, 21 JUNE 2023 |
Alleged dispute about any matters arising under and enterprise agreement – non shiftworker casual laundry employees – whether work performed on Saturday creates entitlement to overtime payments – overtime payable.
Ensign Services (Aust) Pty Ltd (Respondent), trading as Linen Services Australia, operates a commercial laundry in Logis Boulevard, Dandenong, Victoria. The Respondent is covered by the Ensign Dandenong Production Collective Agreement 2020 (Agreement), which came into operation on 11 November 2021.
The United Workers’ Union (UWU), who is also covered by the Agreement, has raised a dispute under the Agreement in relation to work performed by casual laundry employees on Saturdays. As will become apparent, the dispute ultimately concerns the construction of the Dry Cleaning and Laundry Industry Award 2020, as that award existed as at 11 November 2021 (Award), which was substantially incorporated into the Agreement.
The dispute centres on whether hours of work performed by casual laundry employees on a Saturday, who work less than 38 hours per week, should be paid at Saturday penalty rates or if they should be paid at overtime rates for that Saturday work.
The parties proposed the following agreed question for determination:
“Are casual employees in the Dandenong Laundry of Ensign Services (Aust) Pty Ltd who are not shift workers and perform work on Saturdays as part of their 38 hours per week entitled to overtime payments for those hours in accordance with clause 23.1 of the Award or are they to be paid the penalties prescribed under clause 24.1(a) of the Award.”
In summary (and at the risk of some oversimplification), the UWU contended that work on Saturdays by casual laundry employees is to be paid at overtime rates, which applies to work outside of “ordinary hours”. By contrast, the Respondent contended that a casual laundry employee is only entitled to overtime under cl 23.1 where the employee’s hours exceed 38 hours for the week and, otherwise, work on a Saturday is not outside of “ordinary hours” for a casual employee and is instead payable under cl 24.1(a) as “Saturday work”. On the Respondent’s case, the exclusive circumstances in which a casual employee could be paid overtime was governed by cl 11.5 of the Award, which provides that a casual employee working excess of 38 hours in a week will be paid overtime.
For the reasons set out below, the position advanced by the UWU is correct.
The parties agreed, and I accept, that the relevant dispute resolution steps in clause 12 of the Agreement had been complied with and that the Fair Work Commission has jurisdiction to determine the dispute.
The UWU was represented by Mr R. Wyllie of the UWU. The Respondent was represented by Mr J. Douglas of Maddison & Associates. The parties filed an agreed statement of facts, as well as written submissions. As no witnesses were required to give evidence the parties requested that the matter be determined ‘on the papers’, which I have done. I record my acknowledgment of the parties’ cooperation in allowing the matter to be conducted efficiently in this respect.
The Agreement and the Award
Clause 3.1 of the Agreement incorporates the Award. While the Agreement excludes some clauses of the Award from incorporation, none were relevant to the present dispute.
Of greater relevance is the fact that the Agreement does not contain terms dealing with overtime or penalty rates, meaning that the relevant award provisions for those matters apply. There was no dispute between the parties that there was any inconsistency between the Agreement and the Award terms incorporated into the Agreement.
Part 2 of the Award is titled “Types of Employment and Classifications”. Clause 8.1 provides that employees will be employees under full-time, part-time or casual employment.
By cl 9.1 of the Award, a full-time employee is engaged to work 38 ordinary hours per week. By cl 10, part-time employees are engaged to work less than 38 ordinary hours per week, which are reasonably predictable. By cl 10.2, at the time of engagement of a part-time employee, the hours each day, the days to be worked and starting and finishing times are to be specified. By cl 10.5, all time worked by a part-time employee in excess of the hours agreed under cl 10.2 will be overtime.
Clause 11 deals with casual employees. It provides:
“11. Casual employees
11.1 The employment of a casual employee may be terminated with one hour’s notice by either the employer or the employee.
11.2 A casual employee must be paid at the minimum hourly rate prescribed for the appropriate classification plus a loading of 25% for all hours worked.
11.3 The casual loading is paid instead of annual leave, paid personal/carer’s leave, notice of termination, redundancy benefits and the other attributes of full-time or part-time employment provided for in this award.
11.4 A casual employee must be paid for a minimum of 3 hours for each start on any day.
11.5 Where a casual employee works in excess of 38 ordinary hours per week, overtime will be paid.”
Part 3 of the Award is titled “Hours of work”. Clauses 13 – 15 define the “ordinary hours” of work for employees depending on the workplace in question. Specifically:
· Clause 13 addresses ordinary hours of work for “dry cleaning workplaces”;
· Clause 14 addresses ordinary hours of work for “laundry workplaces”; and
· Clause 15 addresses ordinary hours of work for shiftworkers in laundry workplaces.
While the dispute in the present case only concerned non-shiftworker casual employees working in a laundry workplace, it is useful to set out the key elements of clauses 13 and 14. They are:
“13. Ordinary hours of work—dry cleaning workplaces
13.1 The ordinary hours of work will be 38 hours per week.
13.2 Ordinary hours may be worked between:
(a) 7.00 am –7.00 pm Monday to Friday;
(b) 7.00 am –9.00 pm on a prescribed late shopping night(s) in the particular locality; and
(c) 7.00 am –5.00 pm on Saturday.
13.3 …
14. Ordinary hours of work—laundry workplaces
14.1 The ordinary hours of work will average 38 hours per week.
14.2 Ordinary hours may be worked Monday to Friday between the spread of hours of 6.00 am to 6.00 pm and may be worked in one of the following arrangements:
(a) 7.6 hours per day;
(b) 4 days of 8 hours work and one day of 6 hours work; or
(c) a roster system averaging 38 hours worked per week over a 4 week cycle.”
As is noted, there are differences between the ordinary hours for dry cleaning workplaces and laundry workplaces, with the former expressly permitting ordinary hours to be worked on Saturdays. The Respondent does not engage dry cleaning workers at the Dandenong worksite.
Clause 23 provides for overtime. The UWU directly relies upon cl 23.1. Excluding cl 23.3 (which addresses time off in lieu), cl 23 is as follows:
“23. Overtime
23.1 All work performed by an employee outside of and/or in excess of their ordinary hours will be paid for at 150% of the minimum hourly rate for the first 3 hours and 200% of the minimum hourly rate thereafter.
23.2 In calculating overtime each day’s work will stand alone.
23.3 …
23.4 Rest period after overtime
(a) When overtime work is necessary it will, so far as it is reasonably practicable, be arranged so that employees have at least 10 consecutive hours off duty between the work of successive days or shifts.
(b) An employee who works so much overtime after finishing their ordinary hours on a day or shift that they will not have at least 10 consecutive hours off duty before commencing ordinary hours on their next day or shift will, subject to clause 23.4, be released after completion of the overtime until the employee has had 10 consecutive hours off duty without loss of pay for ordinary working time occurring during such absence.
(c) If, on the instructions of the employer, an employee resumes or continues work without having had the 10 consecutive hours off duty, the employee will be paid at 200% of the minimum hourly rate until they are released from duty for such period. The employee is then entitled to be absent until they have had 10 consecutive hours off duty without loss of pay for ordinary working time occurring during the absence.
23.5 Recall to work overtime
An employee recalled from home to work after having left the premises of the employer will be paid for all time worked, with a minimum payment of 4 hours.”
Clause 24 of the Award addresses weekend and public holiday work. As noted above, the Respondent contends that payment for any Saturday work by a casual laundry employee (save in the circumstances for having worked in excess of 38 hours that week) is governed by cl 24.1 of the Award. Excluding the parts for public holiday work and time off in lieu, cl 24 is as follows:
“24. Weekend and public holiday work
24.1 Saturday work
(a) All ordinary time worked before midday on a Saturday will be paid at 125% of the minimum hourly rate. All ordinary time worked after midday on a Saturday will be paid at 150% of the minimum hourly rate.
(b) For shiftworkers the rate in clause 24.1(a) is in substitution for and not cumulative upon the shift rates in clause 25—Shiftwork. However, an employee who is receiving a higher penalty rate under clause 25—Shiftwork will continue to receive that higher rate.
24.2 Sunday work
(a) All time worked by an employee on a Sunday will be paid at 200% of the minimum hourly rate.
(b) For shiftworkers the rate in clause 24.2(a) is in substitution for and not cumulative upon the shift rates in clause 25—Shiftwork.”
I also note that the definition of “casual employee” in the Award is referrable to the definition of that term in s 15A of the Fair Work Act 2009 (Act) and the definition of “employee” means a “national system employee” within the meaning of the Act.
Consideration
I consider that there was little or no meaningful dispute as to the principles applicable for the interpretation of an award but, rather, the disagreement lay in the application of those principles to the Award at hand.
A recent summary of the applicable principles was stated by the Full Court in BioGiene Pty Limited v Mullan [2022] FCAFC 73 at [26], namely:
· When construing the terms of a modern award, the court looks to divine and give effect to the meaning that their authors intended them to convey: Kucks v CSR Ltd (1996) 66 IR 182, 184 (Madgwick J).
· The terms in which an award is framed are to be understood under the light of their context and purpose: Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241, 246 [2] (Gleeson CJ and McHugh J).
· They must not be construed in a vacuum, divorced from industrial realities: City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426, 440 [57] (French J).
To similar effect, the UWU referred to Swissport Pty Ltd v Australian Municipal, Administrative, Clerical and Services Union (No 3) [2019] FCA 37 at [52] as a statement of the general principles of modern award interpretation.
Turning from the general to the specific, the UWU also relied upon the following statement by the Full Bench of the Fair Work Commission in 4 yearly review of modern awards – Overtime for casuals [2019] FWCFB 6953 (the Overtime for casuals decision):
“[34] It is clear that employees under the Dry Cleaning Award are entitled to overtime when they work in excess of 38 hours per week. This is expressly stated in the current clause 10.5(a). Clause 21 also sets daily limits of ordinary hours for all employees (with clause 21.1 applying to dry cleaning workplaces and clauses 21.2 and 21.3 applying to laundry workplaces), including, we consider, casual employees. Clause 22.1 provides that all work performed by employees outside or in excess of their ordinary hours will be paid at the specified overtime penalty rates. Therefore we do not accept ABI’s contention that there is no current entitlement for daily overtime for casual employees. Clause 10.5(c) provides that the casual loading is payable for all hours worked, implying that this includes overtime hours.”
The award considered by the Full Bench was the Dry Cleaning and Laundry Industry Award 2010 (2010 Award). Upon that award’s replacement by the Dry Cleaning and Laundry Industry Award 2020, some renumbering occurred to the clauses referred to by the Full Bench in the Overtime for casuals decision. For avoidance of confusion, I set out the relevant parts of clauses 10.5, 21 and 22 of the 2010 Award, which were:
“10.5 Casual employment
(a) Subject to clause 10.4 a casual employee is an employee who is engaged and paid as such. Where a casual employee works in excess of 38 ordinary hours per week overtime will be paid.
(b) The employment of a casual employee is terminable with one hour’s notice by either the employer or the employee.
(c) A casual employee must be paid an hourly rate of 1/38th of the weekly rate prescribed for the appropriate classification plus a loading of 25% for all hours worked.
(d) The casual loading is paid instead of annual leave, paid personal/carer’s leave, notice of termination, redundancy benefits and the other attributes of full-time or part-time employment provided for in this award.
(e) A casual employee must be paid for a minimum of three hours per day for each start on any day.”
21. Ordinary hours of work and rostering
21.1 Ordinary hours of work—dry cleaning workplaces
…
21.2 Ordinary hours of work—laundry workplaces
(a) The ordinary hours of work will average 38 hours per week. Ordinary hours may be worked Monday to Friday between the spread of hours of 6.00 am to 6.00 pm and may be worked in one of the following arrangements:
(i) 7.6 hours per day;
(ii) four days of eight hours work and one day of six hours work; or
(iii) a roster system averaging 38 hours worked per week over a four week cycle.
22. Overtime and penalty rates
22.1 Overtime
All work performed by an employee outside of and/or in excess of their ordinary hours will be paid for at the rate of time and a half for the first three hours and double time thereafter. In computing overtime each day’s work will stand alone.
…
22.5 Weekend and public holiday work
(a) Saturday work
(i) All ordinary time worked before midday on a Saturday will be paid at the rate of time and a quarter. All ordinary time worked after midday on a Saturday will be paid at the rate of time and a half.
(ii) For shiftworkers the rate in clause 22.5(a)(i) is in substitution for and not cumulative upon the shift premiums prescribed in clause 23—Shiftwork.
(b) Sunday work
(i) All time worked by an employee on a Sunday will be paid at the rate of double time.
(ii) For shiftworkers the rate in clause 22.5(b)(i) is in substitution for and not cumulative upon the shift premiums prescribed in clause 23—Shiftwork.
… ”
Noting the renumbering of award clauses, the 38 hour limit presently found in cl 11.5 of the Award is materially identical to the 38 hour limit in cl 10.5(a) of the 2010 Award.
Similarly, the provisions setting out “ordinary hours” of work for laundry employees presently found in cll 14.1 and 14.2 of the Award are materially identical to the provisions in cl 21.2(a) of the 2010 Award.
Again, the provisions setting out an overtime entitlement for work performed by an “employee outside of and/or in excess of their ordinary hours” now found in cl 23.1 of the Award are materially identical to the provisions in cl 22.1 of the 2010 Award.
Finally, the provisions for Saturday work now found in cl 24.1 of the Award are materially identical to those found in cl 25.5(a) of the 2010 Award.
The UWU submits that the Full Bench’s statement at [34] in the Overtime for casuals decision shows that the Full Bench considered that cl 21.2 of the 2010 Award (i.e. ordinary hours for laundry workplaces) applied to casuals. That submission is plainly correct.
A fortiori, the UWU invites me to conclude that, having regard to the replacement of the 2010 Award by the Award in materially unchanged form that cl 14.2 (ordinary hours) of the Award also applies to casual employees and, by extension, so does cl 23.1 (overtime). I accept the UWU’s submission.
If I was to reject the UWU’s submission, I would need to conclude that the Full Bench’s observations in the Overtime for casualsdecision was wrong. Respectfully, I do not consider the Full Bench was wrong and, to the contrary, it was clearly correct.
While the Full Bench did not provide elaborate reasons, it presumably did not consider it necessary to do so in light of its evident view that the provision was clear.
If cl 14.2 of the Award did not apply to casual employees, there would be no express provision addressing ordinary hours for casuals. The core of the Respondent’s submission about the Award is that cl 11.5 exclusively governs the circumstances that a casual laundry employee can be paid overtime. While that submission was directed at hours being worked on a Saturday, the submission would (if accepted) imply that no overtime would be payable for other categories of overtime recognised by the Award, including working beyond the daily span (cl 14.2), daily limits on hours (cl 14.2), where there is insufficient rest (cl 23.4) or recall (cl 23.5).
By way of further textual support for the above conclusions, the definition of “employee” under the Award applies to all categories of employee. As the term “employee” is used in cl 23.1, that indicates that cl 23.1 applies to all categories of employee. I consider that the plain text of the Award is impermissibly strained to confine operation of cl 23.1 to exclude casual employees and cl 11.5 does not provide sufficient support for such a construction.
In these circumstances, I do not consider that the earlier authorities referred to by the Respondent (which dealt with different awards in different circumstances) do not assist. Those authorities predated both the 2010 Award and the Agreement.
Moreover, whatever debate might have once been had about the 2010 Award, I consider that the replacement of the 2010 Award by the Dry Cleaning and Laundry Industry Award 2020 in circumstances following a clearly stated assumption by the Full Bench as to the latter award’s operation, puts the application of cl 23.1 of the Award beyond doubt.
Disposition
The question posed for arbitration was:
“Are casual employees in the Dandenong Laundry of Ensign Services (Aust) Pty Ltd who are not shift workers and perform work on Saturdays as part of their 38 hours per week entitled to overtime payments for those hours in accordance with clause 23.1 of the Award or are they to be paid the penalties prescribed under clause 24.1(a) of the Award.”
The answer to that question is “casual employees in the Dandenong Laundry of Ensign Services (Aust) Pty Ltd who are not shift workers and perform work on Saturdays as part of their 38 hours per week are entitled to overtime payments for those hours in accordance with clause 23.1 of the Award”.
The dispute is determined accordingly.
DEPUTY PRESIDENT
Hearing details:
Matter determined on the papers.
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