United Workers' Union v Woolworths Group Limited

[2023] FWC 957

[2023] FWC 957

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.739 - Application to deal with a dispute

United Workers' Union
v

Woolworths Group Limited

(C2022/6975)

DEPUTY PRESIDENT COLMAN MELBOURNE, 21 APRIL 2023

Dispute arising under enterprise agreement – dispute determined

1. The United Workers’ Union (UWU) has made an application under s 739 of the Fair Work Act 2009 (Cth) (Act) and the dispute resolution procedure in the Melbourne Liquor Distribution Centre Enterprise Agreement 2021 – 2024 (2021 Agreement) for the Commission to determine a dispute between the union and Woolworths Group Limited (Woolworths). The dispute concerns the public holiday entitlements of certain employees in circumstances where a holiday falls on a day on which they are not rostered to work. Clause 2.4.11.3 of the 2021 Agreement provides that, when a public holiday falls on a non-rostered working day, employees receive an ‘additional day’s pay or a day off in lieu’. The dispute concerns how this provision applies to employees who work shifts of eight hours on four days and six hours on one day (the affected employees). Prior to December 2021, the practice of Woolworths was to base the additional day’s pay or day off on an eight hour day. This meant that the affected employees would receive either 8 hours of pay or 8 hours of accrued time off in lieu (TOIL). In December 2021, Woolworths ceased this practice, after concluding that it was erroneous and resulted in the affected employees being overpaid. Since that time, affected employees have been paid, or have received TOIL accruals, of the average shift length in the roster pattern, which is 7.6 hours.

1. In its F10 application, the UWU stated that there were two questions to be determined in order to resolve the dispute: first, what is the meaning of the word ‘day’ in clause 2.4.11.3; and secondly, was Woolworths entitled unilaterally to alter the long-standing practice of paying affected employees, or affording TOIL, at the value of the longest shift in the roster. In its written submissions, the UWU refined these questions and asked the Commission to answer the following: What is a ‘day’s pay’, and what is a ‘day off in lieu’, for the purposes of clause 2.4.11.3 of the 2021 Agreement? Woolworths’ submissions addressed these questions. I consider that by answering them, I will resolve the dispute that has been referred to the Commission for arbitration.

1. It transpires that the parties now agree on the answer to the first question. If affected employees receive a day’s pay in lieu of the public holiday, they are to be paid 7.6 hours. The second question remains disputed. The UWU maintains that if employees elect to take a day off in lieu, they must receive a sufficient accrual of hours to enable them to take an entire day off on a day of their choosing, and that if this is a day on which they are rostered to work 8 hours, they must be paid 8 hours on that day. Woolworths contends that under clause 2.4.11.3, affected employees are entitled either to a day’s pay or a day off based on the average shift hours for the roster, which is 7.6 hours.

1. It is common ground, and I am satisfied, that clause 3.1 of the 2021 Agreement authorises the Commission to arbitrate the dispute. The parties complied with my directions to file written submissions and materials. They requested that I determine the matter on the papers, and I agreed to do so.

Terms of the 2021 Agreement

1. Clause 2.4.11 of the 2021 Agreement deals with public holidays. Clause 2.4.11.1 states that work on public holidays will be voluntary and prescribes a process for determining volunteers. Clause 2.4.11.2 provides that the minimum engagement for work on a public holiday is four hours, and that employees who work on a public holiday can ‘elect’ to be paid at the rate of 250% of their base hourly rate of pay, or to be paid at the rate of 150% of the base hourly rate of pay, with the equivalent of a full contracted shift banked as time lieu.

1. Clause 2.4.11.3 of the 2021 Agreement then deals with payment for public holidays when an employee does not perform work on a public holiday, either because the employee is rostered to work but does not volunteer, or because they are not rostered to work on the public holiday. The clause reads as follows:

“2.4.11.3 Payment for public holidays – if a Team member does not work

All full time and part time Team members who are usually rostered to work on the day that the public holiday falls, but choose not to volunteer, will be paid at their Base Hourly Rate plus applicable shift loadings.

If a public holiday falls on a full time Team Member’s RDO or non-rostered working day, then the Team Member shall receive an additional day’s pay or a day off in lieu. This day will be paid at the Team Member’s Base Hourly Rate plus applicable shift loadings.

From 6 June 2022, part time Team Members contracted for at least 4 ordinary days per week will receive a pro rata entitlement of non-rostered working day public holidays based on their contracted hours, in line with the following equation:

Contracted Hours/Contracted Days = Base Daily Hours
Hours of Pay = % prorated of 38 hours x Base Daily Hours
Example: A part time team member who is contracted to work 28.5
hours over 4 days per week has base daily hours of:
Base Daily Hours = 28.5/4 = 7.125
Hours of Pay = 28.5/38 = 75% prorated of 38 hours
(75% x 7.125)/100 = 5.34 hours

The part time team member would be paid 5.34 hours for the non-rostered working days that they are entitled to.

1. The first two paragraphs of clause 2.4.11.3 are of longstanding at Woolworths’ Melbourne Liquor Distribution Centre. The three enterprise agreements that preceded the 2021 Agreement contained clauses identical to the first two paragraphs of clause 2.4.11.3. These instruments were the Woolstar Pty Limited Melbourne Liquor Distribution Centre Enterprise Agreement 2011 – 2014; the Woolstar Pty Limited Melbourne Liquor Distribution Centre Enterprise Agreement 2014 – 2017; and the Melbourne Liquor Distribution Centre Enterprise Agreement 2017 – 2021. Provisions extending the public holiday benefit for non-rostered working days to part-time employees appeared for the first time in paragraph 3 of clause 2.4.11.3 of the 2021 Agreement.

1. Various other clauses in the 2021 Agreement were referred to by the parties in their submissions. Clause 1.2 defines ‘day’ as ‘the 24 hours from midnight to midnight’ and the abbreviation ‘NRWD’ as ‘non-rostered working day’. The expression ‘banked hours’ is defined as ‘working hours which, by mutual agreement, are banked by the team member’ and which ‘may be accrued, e.g. via TOIL …’ Clause 2.1.1 prescribes 38 ordinary hours of work per week and provides for the averaging of these hours over the roster cycle. It also obliges the company to maintain certain roster patterns and provides for the introduction of new rosters.

Submissions of the parties

1. The UWU submitted that clause 2.4.11.3 allows employees to elect whether to receive a day’s pay or a day off in lieu of the public holiday that falls on their non-rostered working day. It agreed with Woolworths that, for the affected employees, a ‘day’s pay’ means an ‘average or nominal day’s pay’, which was 7.6 hours per shift over the 5 days of the roster. The union acknowledged that this was consistent with the agreement’s treatment of workers on other rosters, which comprise hours of equal length. However, the UWU contended that if employees elect to receive a day off in lieu, they are entitled to receive pay for the number of hours that they are rostered to work on the particular day that they choose to take off in lieu of the public holiday. When this is a day on which 8 hours are worked, employees must be paid for 8 hours. The UWU said that this must be the case, otherwise employees would not have sufficient accrued hours in order to take an entire day off on that day.

1. The UWU contended that the ordinary meaning of the expression ‘day off in lieu’ in clause 2.4.11.3 is that an affected employee may take that day off on a rostered day, and the number of rostered hours on that particular day is the number of hours of pay that the employee will receive. The union said that the clause did not require the conversion of the day off into accrued hours; rather, the payment required by clause 2.4.11.3 in respect of a ‘day off in lieu’ had a different meaning depending on employees’ roster pattern. For employees working shifts of constant length (five shifts of 7.6 hours or four shifts of 9.5 hours), a ‘day off’ meant a day of 7.6 or 9.5 hours respectively. For an employee working 8 hours on four days and 6 hours on one day, a day off could comprise either 6 or 8 hours, depending on the day that the employee wished to take off in lieu. The 2021 Agreement defined ‘day’ as a 24-hour period from midnight to midnight. Therefore a ‘day’ was to be construed in a way that would allow an affected employee to take an additional full day of 24 hours off, without loss of pay, if their non-rostered working day fell on a public holiday.

1. The UWU said that clause 2.4.11.3 did not specify how a day off in lieu could be banked or accrued, nor did it mandate any special arrangement for the averaging of variable hours. It submitted that although the 2021 Agreement made provision for ‘banked hours’ (clause 1.2) and rostered days off (clause 2.3.4), the entitlement to a day off in lieu of a public holiday under clause 2.4.11.3 was different and should be treated differently because it contemplated a whole day off. Further, ‘banked hours’ referred to hours that are accrued through actual work, whether as overtime or work on a public holiday, and those hours were countable, unlike the hours of a non-rostered working day for affected employees.

1. The union submitted that part of the purpose of clause 2.4.11.3 was to allow employees to take a full day off, and that a purposive approach to the interpretation of the clause requires that the number of hours of which a ‘day off in lieu’ was comprised could only be determined once the day off was taken. The clause was not concerned with the number of hours accrued to an employee, but with providing an additional day off to compensate employees for not being rostered on the public holiday. The union contended that its construction strived to avoid the injustice that would arise if affected employees could not take a whole day off without loss of pay in lieu of the public holiday they had ‘missed’ by not being rostered on that day. It said that on the company’s interpretation, employees taking a ‘day off in lieu’ on an eight-hour rostered day would be short-changed by 0.4 of an hour’s pay, requiring them to take leave or TOIL in order to take the whole day off without loss of pay. New employees would lose pay because they would not have sufficient accruals of leave or TOIL to cover the difference.

1. The UWU contended that the company should separately record accruals of days off in lieu to be taken under clause 2.4.11.3 and suggested that this could be done on employees’ payslips, in the same manner as the discrete recording of long service leave accruals.

1. Woolworths contended that, for affected employees, a ‘day’s pay’ clearly meant a day comprised of the average number of shift hours, and that a ‘day off in lieu’ must mean the same thing, because the day off was in lieu of a day’s pay, not the public holiday. It said that prior to December 2021, affected employees had either been paid or granted TOIL based simply on 8 hours, which was a mistake, resulting in overpayments. For employees working shifts of uniform hours, the application of clause 2.4.11.3 was simple because each shift was the same. For the affected employees, there was no default position to ascribe to a day on which an employee was not rostered to work; a day could comprise either 6 or 8 hours. However, clause 2.1 of the 2021 Agreement allowed for ordinary hours to be averaged over a four-week full-time roster cycle, and the only industrially sensible approach was to calculate a ‘day's pay’ and a ‘day off in lieu’ for affected employees based on their average hours.

1. Woolworths further contended that its construction was consistent with the equation set out for part-time employees in paragraph 3 of clause 2.4.11.3, which used an averaging formula determined by reference to employees’ ‘base daily hours’, which are the rostered hours divided by the number of contracted days of work. The example in the clause shows a part-time employee working 28.5 ordinary hours over four days in a week. This equates to part-time hours at 75% of full-time, with an average of 7.125 hours per day, producing a daily payment based on the average of 5.34 daily hours (75% of 7.125).

1. Woolworths submitted that, although the entitlement to a day in lieu pursuant to clause 2.4.11.3 was separate from the RDO system, there was nothing to suggest that an averaging of hours could not be employed, nor was there any reason to think that a day off in lieu could not be banked or taken as TOIL as had been the practice for years, and the UWU did not appear to suggest otherwise.

1. The company submitted that the UWU’s proposed meaning of a ‘day off in lieu’ ran counter to its acknowledgement that a ‘day’s pay’ meant an average or nominal day’s pay of 7.6 hours and did not produce an industrially sensible outcome. It said that it would be wrong to conclude that a day’s pay and a day off meant days of different lengths and maintained that there was no basis to differentiate between the meaning of a ‘day’ in these two expressions that are found in the same clause. If a day’s pay meant a day of 7.6 hours, a day off in lieu meant the same thing. The company submitted that the UWU’s construction would result in unfairness and inconsistency. An employee would be worse off if they elected as their day off in lieu a day on which they were rostered to work 6 hours, whereas another employee would be paid extra if they took the day off on an 8-hour day. As to the case of a new employee with no accruals of TOIL or leave who took a day off on an ‘eight-hour day’, it would be open to the employee instead to receive payment of a day’s pay at 7.6 hours. The company said that its construction produced a sensible and fair outcome that was consistent with a contextual reading of the clause.

1. In its submissions in reply, the UWU contended that the company’s construction was not reasonably available because a ‘day off in lieu’ that is only 7.6 hours would not provide employees with a ‘day’ off duty on 4 out of 5 shifts: they would fall short of a full day’s pay on each day that they are rostered for an 8-hour shift. The only day which an employee could take off in lieu without losing pay was their short day of 6 hours which occurs only once a week. The UWU further contended that the part-time provision in clause 2.4.11.3 was not relevant to the constructional debate because it was simply a mechanism that was needed in order to extend the NRWD public holiday benefit to part-time employees.

Consideration

1. The principles that apply to the interpretation of enterprise agreements are well-known and need not be restated here. The Commission’s task is fundamentally to ascertain the meaning of a document created by others and to do so by giving effect to the ordinary meaning of the relevant text, read in the context of the document as a whole, with due regard to any identifiable common purpose or intention.

1. I agree with the common view of the UWU and Woolworths that a ‘day’s pay’ for the purposes of clause 2.4.11.3 is an average or notional day’s pay. A ‘day’s pay’ cannot refer to the pay for the day on which the public holiday fell, because that day was a non-rostered working day, for which there was no pay. There is no actual day that can be the reference point. Instead, there is a fictional day. For employees working rosters of uniform hours, it is obvious that this fictional day is comprised of the hours that they work on any day. For the affected employees who work variable hours, the fictional day is one comprised of the average hours worked in the roster. The clause does not expressly say so. Yet this must have been the intended operation of the clause in its application to such employees, having regard to the broader context of the 2021 Agreement, which specifically contemplates the averaging of ordinary hours.

1. Clause 2.4.11.3 is found in Part 2 of the 2021 Agreement, which is headed ‘Employment formalities’ and deals with hours of work, overtime, rostered days off, TOIL, rostering arrangements, pay and other conditions of employment. Clause 2.1.1 states that full-time employees will work 38 ordinary hours per week which may be averaged over 152 hours in a four-week cycle of no more than 20 engagements or shifts. The minimum daily engagement is 6 hours, and the maximum is 10. Rostered days of work may be varied on 28 days’ notice in writing, or lesser notice by agreement. The clause states that the company will retain the 4 x 9.5 hour shift pattern, as well as the affected roster (4 x 8 hours, 1 x 6 hours), until at least 1 June 2024, at which time the company may review them. In short, the 2021 Agreement recognises shifts of variable hours and the averaging of hours over a roster cycle. In the context of such a structure, the reference to a ‘day’s pay’ for a public holiday on which a variable-hours worker is not scheduled to work is plainly a notional day comprised of the average hours worked by the employee on the relevant roster. In my opinion, the same is true of a ‘day off in lieu’, for the following reasons.

1. First, the contextual considerations indicating that a ‘day’s pay’ means a notional or average day also support the conclusion that a ‘day off in lieu’ means a notional or average day. Secondly, it is improbable that the framers of the document would have intended the same word in the same sentence of the one clause to have two different meanings. Thirdly, I do not accept the union’s contention that the pay for a day off in lieu must be the pay for the day chosen by the employee as the day off, because the clause does not state than an employee may select a particular day off. In fact, although both parties proceeded on the assumption that employees have a choice of a day’s pay or a day off in lieu, the clause does not say this either, unlike clause 2.4.11.2, which states that employees can ‘elect’ one benefit or the another. Clause 2.4.11.3 states that an employee ‘shall receive’ an additional day’s pay or a day off in lieu. Woolworths will comply with the clause by ensuring that an employee receives one or the other.

1. Fourthly, I agree with the company that the reference to ‘day off in lieu’ means a day off in lieu of an additional day’s pay. In a different context, the union’s argument would have merit. Very often, a day off in lieu does indeed mean a day off in lieu of an actual public holiday. This is usually the case in the context of a clause conferring an alternative benefit on employees who have worked on a public holiday, or when the public holiday to which employees were entitled is replaced by another day. There, the employees have missed out on a public holiday to which they were entitled. But clause 2.4.11.3 is concerned with public holidays to which employees are not entitled, because they fall on non-rostered working days. Here, employees have not missed out on the public holiday, because they were not rostered to work on the public holiday. To my mind, it would not make sense to say that one receives a day off in lieu of a public holiday to which one was not entitled in the first place. Rather, although affected employees had no entitlement to the public holiday, a benefit is conferred on them by the clause, and that benefit is an additional day’s pay or a day off in lieu of that payment. But in any event, even if the UWU were correct in its contention that the day off is in lieu of the public holiday, it would in my view be a notional day off in lieu in terms of pay; although it would be taken on a particular day, it would be in lieu of a notional day, and paid at that rate. Further, I do not consider that the definition of ‘day’ in clause 1.2 is of any assistance. The day referred to in clause 2.4.11.3 is clearly a shift, not a period of 24 hours from midnight to midnight.

1. It appears from the F10 application and the parties’ submissions that it has long been a practice at the site for employees to accrue the day off in lieu as TOIL. The UWU noted in its application, with apparent approval, that under each of the predecessor agreements, the company had paid or granted accruals to affected employees of 8 hours. It was the company’s departure from this practice that triggered the dispute. Clause 2.4.11.3 does not specifically provide for accrual of days off in lieu as TOIL. By contrast, clause 2.4.11.2, which deals with payments for employees who work on a public holiday, allows employees to take ‘time in lieu’ which can be ‘banked’. Nevertheless, one can see how the general provisions relating to TOIL may apply to the day off in lieu of a public holiday under clause 2.4.11.3. While there is no evidence about this practice or how days off in lieu are taken as TOIL, I would expect that, when a day off in lieu is taken as TOIL, the average number of hours worked by affected employees would be credited to their TOIL accruals and taken in due course. The dispute that has been referred to the Commission does not concern whether a day off in lieu can be taken as TOIL (it seems that the parties agree that it can). It concerns the meaning of the word ‘day’ in the expression ‘a day off in lieu’ that appears in clause 2.4.11.3, as it applies to the affected employees. In my view, a day off in lieu is a notional day of 7.6 hours.

1. The UWU acknowledged that, consistent with its position that a day’s pay for affected employees was a day of 7.6 hours, if accrued days off in lieu are paid out on termination of employment, the payment is based on a nominal or average day’s pay, as if the employee had received a day’s pay in the first instance. On the union’s construction, days off in lieu accrue on a provisional or variable basis, and then crystalise in terms of payment at a later time, depending on when they are taken, or whether they are paid out on termination. In my opinion this is not a conceptually stable framework.

1. The company’s interpretation does not give rise to any unfairness. A new employee who wanted to take a ‘day off in lieu’, but who had no TOIL or accrued leave, would still be able to take the day off, even on an eight-hour day. The employee would not ‘lose’ 0.4 hours of pay on that day, because the employee did not have an entitlement to the public holiday in the first place. Clause 2.4.11.3 confers an entirely additional benefit where none would otherwise exist; the question is only about the size of that benefit. The benefit that the clause confers on an affected employee is a payment in the amount of the average shift hours, or a day off in lieu of that payment. If the employee is concerned about receiving 7.6 rather than 8 hours pay on a day off in lieu, he or she can choose a 6 hour day as a day off in lieu. The employee is still better off in the amount of 7.6 hours’ pay than would have been the case if clause 2.4.11.3 had not conferred a benefit in respect of non-applicable public holidays.

1. The company’s interpretation is consistent with the new part-time provisions that were included in the 2021 Agreement, and which are based on, or at least include, an assessment of the average hours worked by those employees for the purposes of extending the public holiday benefit to them. But regardless of this, it is clear from the framework of the 2021 Agreement that rosters may be of variable hours and that ordinary hours may be averaged over the roster cycle. In this context, clause 2.4.11.3 contemplates a notional, average day’s pay or day off for the affected employees, one comprising 7.6 hours.

Conclusion

1. The answer to the question that has been referred to the Commission for arbitration is that, for the purposes of clause 2.4.11.3 of the 2021 Agreement, as it applies to the affected employees, a ‘day’s pay’ and a ‘day off in lieu’ means a notional or average day or shift that is comprised of 7.6 hours. The dispute is determined accordingly.

DEPUTY PRESIDENT

Determined on the papers

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