United Workers' Union v The Cake Syndicate Pty Ltd T/A Susan Day Cakes

[2021] FWC 93

[2021] FWC 93

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

United Workers’ Union
v
The Cake Syndicate Pty Ltd T/A Susan Day Cakes
(C2020/1471)

DEPUTY PRESIDENT MASSON MELBOURNE, 8 JANUARY 2021

Alleged dispute about any matters arising under the enterprise agreement and the NES s186(6).

Introduction

[1] On 11 March 2020 the United Workers’ Union (UWU) applied to the Fair Work Commission (the Commission) to deal with a dispute pursuant to s. 739 of the Fair Work Act 2009 (the Act) under the dispute resolution procedure at clause 9 of the Cake Syndicate Pty Ltd (Trading as Susan Day Cakes) Enterprise Agreement 2018 – 2020 1(the Agreement). The Respondent in the matter is The Cake Syndicate Pty Ltd T/A Susan Day Cakes (the Respondent).

[2] The dispute is in relation to the meal break and/or rest break entitlements of employees who are required to work overtime on a Saturday. The relevant entitlement arises from the interaction and operation of the relevant industrial instruments, those being the Agreement and the Food, Beverage and Tobacco Manufacturing Award 2010 2 (the 2010 Award).

Jurisdiction

[3] Section 739 of the Act empowers the Commission to deal with certain disputes under enterprise agreement dispute settlement terms. The Agreement contains such a term, which is clause 9 ‘Dispute settlement procedure’ (the DSP).

[4] It was not contested that the question to be determined by the Commission was capable of constituting a dispute over the interpretation or application of the Agreement. Nor was it in dispute that the steps taken by the parties to resolve the dispute constituted compliance with the dispute resolution provision of the Agreement. Having regard to the information in the Form F10 application and the views of the parties, I am satisfied that the Commission has jurisdiction to deal with the dispute, including by arbitration as provided by clause 9.3 of the Agreement.

[5] Conciliation conducted by Deputy President Colman failed to resolve the dispute, following which the matter was allocated to me for determination. The matter is now to be determined on the papers by consent of the parties.

Issues for determination

[6] The following question was agreed between the parties for determination by the Commission:

“Under the Agreement, what breaks, paid and unpaid, are employees entitled to when working their usual hours as overtime on a Saturday?

Agreed Facts

[7] In accordance with the directions the parties provided the following agreed statement of facts;

1. The Respondent operates a factory at 213 – 215 Princes Highway, Hallam Victoria, engaged in the manufacture of cakes for the retailers of fast moving goods.

2. The Respondent is bound by The Cake Syndicate Pty Ltd (trading as Susan Day Cakes) Enterprise Agreement 2018-2020 (the Agreement).

3. By virtue of clause 4 of the Agreement, the Agreement is read in conjunction with the Food Beverage and Tobacco Manufacturing Award 2010 (the Award).

4. At the factory, ordinary hours of work are worked over the days Monday to Friday.

5. Employees normally commence ordinary hours for day work at 6.00am and finish ordinary hours at 2.06pm, Monday to Friday.

6. Employees normally commence ordinary hours for afternoon shift at 2.00pm and finish ordinary hours at 10.06pm, Monday to Friday.

7. Employees normally commence ordinary hours for night shift at 10.00pm Sunday and finish ordinary hours at 6.06am, the last ordinary shift finishing at 6.06 am on Friday morning.

8. During ordinary hours, pursuant to clause 26.2 of the Agreement, employees take a 10 minute morning rest break, and a 10 minute afternoon rest break, both of which are paid at ordinary time.

9. Also, during ordinary hours, pursuant to clause 26.1 of the Agreement, and by reference, clause 32 of the Award, employees take a “midday” 30 minute meal break, which is unpaid.

10. When employees work on a Saturday, it is overtime, paid at time and a half for the first 3 hours and double time thereafter.

11. At least for the entire duration of the Agreement, the breaks applied during ordinary hours have been applied during Saturday overtime hours.

12. Overtime when it is worked on a Saturday will commence at 6.00 am and will follow the starting and finishing times of shifts during the week, with the exception that the Saturday overtime shift will often finish at 2:00 pm instead of 2:06 pm (i.e. a 7.5 hour shift as opposed to a 7.6 hour shift)

13. Employees take a 10 minute morning break during the first 3 hours of work, paid at the time and a half rate.

14. Employees take a 30 minute “midday” break, which is unpaid.

15. Employees take a 10 minute afternoon break during the last 3 hours of work, paid at the double time rate.

Consideration

[8] Before turning to consider the Agreement and 2010 Award terms construction it is useful to outline the competing positions of the parties, which may be shortly stated as follows.

[9] The UWU contend that as the work performed on a Saturday from 6.00 am to 2.00 pm is overtime, the relevant ‘rest break’ provisions at clause 33.9(a) of the incorporated 2010 Award applies, giving rise to an entitlement to a 20 minute paid rest break after each 4 hours of overtime worked. In addition, the UWU contend that employees working overtime on a Saturday are also entitled to paid breaks in accordance with clause 26.2 of the Agreement, that being a paid 10 minute break in the morning and a paid 10 minute break in the afternoon. The UWU contend that clause 26.2 supplements the 2010 Award meal and rest break provisions and does not limit the entitlement to the two 10 minute paid breaks to only when work is performed during ordinary hours of work.

[10] The Respondent agrees that employees working overtime from 6.00 am to 2.00pm on a Saturday are entitled to a paid 20 minutes ‘rest break’ after each 4 hours of work in accordance with clause 33.9(a) of the 2010 Award. As per the agreed statement of facts, it states that its practice has been to structure the paid 20 minute break in two 10 minute paid breaks. It rejects the UWU’s contention that there is a further entitlement to two 10 minute paid breaks per clause 26.2 of the Agreement and contends that the clause 26.2 entitlement supplements the meal break entitlement which is provided for in the 2010 Award and is confined to ordinary hours of work.

[11] Turning now to the matter in contest, I accept that the principles of interpretation to be applied are those detailed in Australian Manufacturing Workers Union (AMWU) v Berri Pty Ltd 3 (Berri). I note that neither party sought to lead any evidence or rely on any extrinsic material that might assist in the interpretation process.

[12] It is clear from clause 4 of the Agreement, which is set out below, that the Agreement is intended to incorporate the terms of the 2010 Award and that where there is any inconsistency between the two instruments the terms of the Agreement shall prevail to the extent of any inconsistency;

“4. RELATIONSHIP TO PARENT AWARD

4.1. The Food, Beverage and Manufacturing Award 2010 (‘Award’) applies by reference and its terms and conditions shall be read and interpreted wholly in conjunction with this Agreement.

4.2. Where there is any inconsistency between this Agreement and the Award, this Agreement shall prevail to the extent of the inconsistency.”

[13] If there were any doubt as to the effect of the intention to incorporate the 2010 Award, such doubt was removed through the provision of and acceptance by the Commission of the following undertaking when the Agreement was approved 4;

“2. Clause 4 is to be read so that the Modern Award is to be incorporated into the EBA, and the Award conditions therefore apply where the Agreement is silent.”

[14] The starting point in determining the matter is to consider the meal break and rest break provisions in the Agreement and incorporated 2010 Award. It is important to state at the outset that the Agreement does not contain any meal break entitlements and specifically refers at clause 26.1 of the Agreement to the operation of the 2010 Award provisions in respect of meal breaks. Nor does the Agreement contain any provision relating to overtime or breaks during overtime and again relies entirely on the incorporated 2010 Award provisions.

[15] Turning firstly to the meal break provisions, these can be found at clause 26 of the Agreement and clause 32 of the 2010 Award. Clause 26 of the Agreement makes explicitly clear that the meal break provisions of the 2010 Award apply. It also states that clause 26 of the Agreement supplements or deals with incidental matters to the 2010 Award when it states as follows;

“26. MEAL BREAKS

26.1. Meal breaks are provided for in the Award. This clause supplements or deals with matters incidental to the Award.

26.2. Employees shall be allowed a break of ten (10) minutes in the morning and ten (10) minutes in the afternoon at a time to be arranged between the Employer and the Employee, and such time is to be counted as time worked. Such breaks will not be allowed within thirty (30) minutes of commencing or thirty (30) minutes of finishing work for the day or one hour before or after the meal break unless agreed by the Employer.”

[16] The relevant 2010 Award clause that deals with meal breaks is found at Clause 32 Meal breaks which sits within Part 5 - Hours of Work and Related Matters in the 2010 Award. Part 5 of the 2010 Award comprises the following clauses;

•  Clause 30 Ordinary hours of work and rostering;

•  Clause 31 Special provisions for shiftworkers;

•  Clause 32 Meal breaks; and

•  Clause 33 Overtime

[17] Clause 32 of the 2010 Award sets out the meal break entitlements in the following terms;

32 Meal breaks

32.1 An employee must not be required to work for more than five hours without a break for a meal except in the following circumstances:

(i) in cases where canteen or other facilities are limited to the extent that meal breaks must be staggered and as a result it is not practicable for all employees to take a meal break within five hours, an employee must not be required to work for more than six hours without a break for a meal; or

(ii) by agreement between an employer and an individual employee or the majority of employees in an enterprise or part of an enterprise concerned, an employee or employees may be required to work in excess of five hours but not more than six hours at the ordinary time rate without a meal break.

32.2 The time of taking a scheduled meal break or rest break by one or more employees may be altered by an employer if it is necessary to do so in order to meet a requirement for continuity of operations.

32.3 An employer may stagger the time of taking meal and rest breaks to meet operational requirements.

32.4 Subject to clause 32.1, an employee must work during meal breaks at the ordinary time rate whenever instructed to do so for the purpose of making good any breakdown of plant or for routine maintenance of plant which can only be done while the plant is idle.

32.5 Except as otherwise provided in clause 32-Meal breaks and except where any alternative arrangement is entered into by agreement between the employer and the employee concerned, the rate of 150% must be paid for all work done during meal hours and thereafter until a meal break is taken.

[18] While Clause 32 does not explicitly state that meal breaks only apply in respect of ordinary hours, a number of factors tell in favour of that construction. Firstly, the overtime provisions which are at set out clause 33 of the 2010 Award contain a discreet provision dealing with rest breaks on overtime. There is no suggestion that working overtime attracts both a meal break and rest break entitlement under the 2010 Award. Secondly, clauses 30.2(c), 30.3(b) and 30.4(c) of the 2010 Award which deal with ordinary hours of work, refer to meal breaks and not rest breaks. Thirdly, it is only clause 33.9 which specifically provides for a paid 20 minute rest break when working overtime. Fourthly, clauses 32.4 and 32.5 provide for penalty payments where employees are required to work through their meal breaks. Such a provision has no utility in respect of overtime as the employee would already be in receipt of penalty payments whilst working overtime.

[19] In my view, and contrary to the UWU’s argument, the term meal break where it is used in the 2010 Award has a particular meaning, that being a paid (in the case of a continuous shift worker) or unpaid break during ordinary hours of work for the purpose of allowing an employee a break for a meal. Further support for this construction can be found in that the terms ‘meal break’ and ‘rest break’ are not used interchangeably in the 2010 Award. This can be seen by the following references which reinforce the existence of a distinction between “meal breaks” and “rest breaks”;

•  Clause 32.2 refers to the time of taking a “meal break or rest break”;

•  Clause 32.3 refers to the staggering of times of “meal and rest breaks”;

•  Clause 32.4 refers to an employee being required to work through their “meal break” at the “ordinary time rate”; and

•  Clause 33.10 provides for a “meal allowance” for each “rest break” in particular circumstances of overtime being worked.

[20] Returning now to clause 26.2 of the Agreement which is set out at [15] above. The wording of clause 26.1 in the Agreement makes clear that clause 26 is intended to supplement Clause 32 Meal breaks in the 2010 Award and deal with incidental matters. There is nothing in the wording of clause 26.2 that indicates an intention that the term meal break where it appears in clause 26 has a different meaning in the Agreement to that of the 2010 Award. In fact, the specific incorporation of the 2010 Award terms tells against such a proposition. As I have found above, the Clause 32 Meal break provision in the 2010 Award is concerned with the paid or unpaid break an employee is entitled to during their ordinary hours of work. As such, it follows in my view that the two 10 minute breaks provided for in clause 26.2 of the Agreement are intended to supplement the meal break to which an employee is entitled to under clause 32 of the 2010 Award.

[21] The above construction is reinforced when one has regard to the restrictions on when the paid 10-minute breaks may be taken. Specifically, the 10-minute breaks under clause 26.2 of the Agreement need to be taken no less than one hour before or after the meal break. This wording ties the entitlement of the supplementary paid 10-minute morning and afternoon breaks to the specific meal break entitlement provided by clause 32 of the 2010 Award, which as I have found above, applies during ordinary hours of work only.

[22] Turning now to break provisions that apply in respect of overtime. There are, as I have stated above, no Agreement provisions that deal with overtime or breaks on overtime therefore entitlements in respect of overtime are provided by clause 33 of the 2010 Award. Relevantly, clause 33.9 of the 2010 Award sets out the rest break entitlements that apply when overtime is undertaken, in the following terms;

“33 Overtime

…………………..

33.9 Rest break

(a) An employee working overtime must be allowed a rest break of 20 minutes without deduction of pay after each 4 hours of overtime worked if the employee is to continue work after the rest break.

(b) Where a day worker is required to work overtime on a Saturday, Sunday or public holiday or on a rostered day off, the first rest break must be paid at the employee’s ordinary hourly rate.

(c) Where overtime is to be worked immediately after the completion of ordinary hours on a day or shift and the period of overtime is to be more than 1.5 hours, an employee, before starting the overtime, is entitled to a rest break of 20 minutes to be paid at the employee’s ordinary hourly rate.

(d) An employer and employee may agree to any variation of clause 33.9 to meet the circumstances of the work in hand provided that the employer is not required to make any payment in excess of or less than what would otherwise be required under clause 33.9.

[23] Clause 33.10 sets out the entitlement to a meal allowance in various circumstances of overtime being performed, including where insufficient notice of the overtime has been provided. The clause states as follows;

33.10 Meal Allowance

(a) An employee must be paid a meal allowance of $15.01 on each occasion the employee is entitled to a rest break in accordance with clause 33.9, except in the following circumstances:

(i) if the employee is a day worker and was notified no later than the previous day that they would be required to work such overtime; or

(ii) if the employee is a shiftworker and was notified no later than the previous day or previous rostered shift that they would be required to work such overtime; or

(iii) if the employee lives in the same locality as the enterprise and could reasonably return home for meals; or

(iv) if the employee is provided with an adequate meal by the employer.

(b) If an employee has provided a meal or meals on the basis that they have been given notice to work overtime and the employee is not required to work overtime or is required to work less than the amount advised, they must be paid the prescribed meal allowance for the meal or meals which they have provided but which are surplus.

[24] There is no doubt on a plain reading of the provisions of the 2010 Award that, when employees are required to work overtime, they are entitled to paid rest breaks in accordance with clause 33.9 of the 2010 Award. In the circumstances of the present matter, that of overtime being worked on a Saturday between 6.00 am and 2.00 pm, employees are entitled to a 20 minute paid rest break after each 4 hours of work per clause 33.9(a), so long as they are required to continue working after the rest break.

[25] The rest break is to be paid at the employee’s ordinary rate of pay per clause 33.9(b) of the 2010 Award if the employee is a dayworker required to work “Saturday, Sunday or public holiday or on a rostered day off”. If the employee required to work overtime on a “Saturday, Sunday or public holiday or on a rostered day off” is other than a dayworker, that is either a continuous or non-continuous shiftworker, the employee would be entitled to the paid rest break “without deduction of pay” per clause 33.9(a) of the 2010 Award. That means the employee would be entitled to receive the appropriate overtime penalty payment that otherwise applied during the period of the rest break.

[26] The UWU contend that to narrow the operation of clause 26.2 to only ordinary hours of work would produce an absurd result in that an employee working an 8 hour overtime shift on a Saturday would receive less breaks than if they worked an 8 hour shift on a Monday-Friday, that being ordinary hours of work. I would observe that a tension also arises if, on the UWU’s construction, clause 26.2 were found to apply to overtime hours. For example, if less than 8 hours overtime were worked on a particular day the employee concerned would still appear, on the UWU’s construction, to be entitled to the paid 10 minute morning and afternoon breaks.

[27] Apart from the restrictions on the timing of the 10 minute breaks relative to start/finish times and the meal break that are imposed by clause 26.2 , it is not obvious on the UWU’s construction as to when the entitlement to the two breaks would or would not arise when overtime was worked. If for example an employee were required to work 4 hours of overtime commencing at 8.00am and finishing at 12.00 midday on a Saturday, would the employee be entitled to one 10-minute break only? If 4 hours of overtime were worked between 10.00 am and 2.00 pm, would the employee be entitled to a morning and afternoon break so long as the breaks were no less than 30 minutes after commencement time and no less than 30 minutes before finishing work? If the overtime were worked from 9.00 am to 2.00 pm on a Saturday, would the employee still be entitled to the two 10 minute morning and afternoon breaks in addition to the paid 20 minute rest break they would clearly be entitled to after 4 hours of overtime pursuant to clause 33.9 of the 2010 Award?

[28] I accept that the focus of the dispute has been in respect of 8-hour overtime shifts performed on a Saturday. However, the consequence of acceptance of the UWU’s construction in relation to clause 26.2 applying to both ordinary hours of work and overtime is that it would also in my view produce absurd results more generally in respect of the operation of clause 26.2 to overtime. Worse still, the entitlement to breaks under clause 26.2 would in my view be entirely unclear if the clause applied to overtime as well as ordinary hours of work.

[29] It may indeed be the case under the construction I prefer, that the working of certain periods of overtime may attract fewer break entitlements than if the same number of hours were worked during ordinary hours of work, but that is the effect in my view of the correct construction of the relevant clauses in the Agreement and the 2010 Award. Moreover, under the preferred construction, the rest break entitlement in respect of when overtime is worked is clear, that being a 20 minute paid break after each 4 hours worked subject to work continuing after the break, in accordance with clause 33.9 of the 2010 Award. It is of course open to the parties to negotiate and correct any anomalies they perceive in relation to the interaction of meal and rest breaks entitlements under the Agreement and 2010 Award upon negotiation of a new agreement to replace the current Agreement which I note reached its nominal expiry date on 30 June 2020.

[30] It follows from the forgoing that there is a clear distinction between rest breaks during overtime and meal breaks during ordinary hours of work. As I have also found, the paid break entitlement under clause 26.2 of the Agreement supplements the meal break entitlement of clause 32 of the 2010 Award and operates in respect of ordinary hours of work only. The entitlement to breaks when working overtime is provided by clause 33.9 of the 2010 Award.

[31] One final issue I raise is in respect of the 2010 Award incorporation issue. At the time the dispute was filed, the relevant award was the 2010 Award. On 11 December 2020 the Food, Beverage and Tobacco Manufacturing Award 2020 (the 2020 Award) was published as part of the 4 yearly review of modern awards. 5 Neither party addressed me on the status of award incorporation under clause 4 of the Agreement having regard to finalisation and commencement of the 2020 Award. I note however that clause 4 specifically refers to the 2010 Award and both parties have made their respective cases on the basis of the incorporation of the 2010 Award.

[32] While neither party contended that the 2020 Award is the relevant incorporated modern award, the provisions are substantially the same in the 2020 Award in respect of the matter in dispute. Some changes have been made to the structure of the 2020 Award. This can be seen by the fact that Clause 13 Meal breaks in the 2020 Award, now sits within Part 3 of the new award. Part 3 deals with ‘Hours of Work’ and relevantly includes only two clauses, those being;

•  Clause 12 Ordinary hours of work; and

•  Clause 13 Meal breaks

[33] A change of significance was also made to the meal breaks clause in the 2020 Award in respect of the penalties payable for when an employee is required to work through their meal break. The new clause 13.5 relevantly states as follows;

“13.5 Except as otherwise provided in clause 13—Meal breaks and except where any alternative arrangement is entered into by agreement between the employer and the employee concerned, employees must be paid as follows for all work done during meal hours and thereafter until a meal break is taken:

(a) except in the circumstances referred to in clauses 13.5(b), 13.5(c), 13.5(d) and 13.5(e): 150% of the ordinary hourly rate;

(b) where the unpaid meal break is during ordinary time on a Saturday or Sunday: 200% of the ordinary hourly rate;

(c) where the unpaid meal break is during ordinary time on a shift on which the employee is entitled to a 12.5% loading: 162.5% of the ordinary hourly rate;

(d) where the unpaid meal break is during ordinary time on a shift on which the employee is entitled to a 15% loading: 165% of the ordinary hourly rate;

(e) where the unpaid meal break is during ordinary time on a shift on which the employee is entitled to a 30% loading: 180% of the ordinary hourly rate.” (my emphasis added)

[34] To the extent that the changes referred to above are at all relevant, they simply serve to reinforce the finding I have already made in relation to the 2010 Award that meal breaks apply only in respect of ordinary hours of work.

Conclusion

[35] It follows from the above that the answer to the question for determination is as follows;

“Employees working overtime on a Saturday are only entitled to rest breaks in accordance with clause 33.9 of the Award.”

[36] The matter is determined accordingly.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

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 1   AE501399

 2   MA000073

 3   [2017] FWCFB 3005 at [17]

 4   [2019] FWCA 340

 5   [2020] FWCFB 6633