DECISION - Cdassociates .au

[2017] FWC 2535negotiations for the 2016 Agreement. Mr Zielinski added that at the time, Mr O’Brien hadwelcomed the payment for overtime for work performed on the seventh consecutive day, butrequested it be extended to the sixth day. Before the vote for approval of the 2016 Agreement,the Company wrote to employees and provided a summary of key changes. The summaryindicated that if an employee was required to work on seven consecutive days, overtimewould be paid for hours worked on the seventh day.SUBMISSIONS[14]Both parties dealt with the principles to be applied by the Commission wheninterpreting the provisions of an enterprise agreement and the authorities pertaining thereto;Most notably The Australasian Meat Industry Employees Union v Golden Cockerel PtyLimited [2014] FWCFB 7447 (‘Golden Cockerel’.) I will come back to those principles andauthorities later, suffice to observe at this point that the parties are ad idem as to the relevantprinciples to be applied in this case. Unsurprisingly, they strenuously disagree as to theoutcome of the application of those principles to the subject matter of this dispute.For the Union[15]In written submissions it was said that in the 2016 Agreement, cl 17 confers anentitlement on a full time employee to be paid overtime when the employee works for alonger period than his or her rostered shift or an average of more than 38 hours per week overa roster cycle; and for a part time employee who works more than eight hours per day or 38hours in a pay week. Overtime should be payable, irrespective of any leave entitlementsaccessed during the pay week or roster period. In determining whether the employee hasworked more than 38 hours, authorised leave entitlements should be taken into account.[16]The Union submitted that a number of factors support this interpretation of cl 17:(a) The ordinary common sense understanding of the words used supports a propositionthat any permitted or authorised leave is part of an employee’s work time;(b)Section 62 of the Act prescribes maximum hours of work and s 62(4) defines hours ofwork as including ‘any hours of leave, or absence, whether paid or unpaid, that the6

[2017] FWC 2535employee takes in the week and that are authorised.’. It may be assumed the partiesintended ‘work time’ to have the same meaning as in s 62 of the Act;(c) The circumstances at the time the 2016 Agreement was made; namely, the longstanding practice in Sydney, Melbourne and Brisbane, to include periods of leavewhen calculating overtime. Past practice supports the conclusion for which the Unioncontends. This is further supported by the fact that:i.Jetstar did not seek to alter the long standing practice during the negotiationsfor the 2016 Agreement; andii.The equivalent provision in the EGH Agreement was simply rolled over.(d) Jetstar’s interpretation gives rise to the provision being considered an ‘objectionableterm’ and therefore, ‘unlawful’ under s 194 of the Act. Moreover, it might be said thatcl 17 involves the exercise of a ‘workplace right’ being for employees to takepersonal or other leave under the Agreement and the NES. Adverse action wouldarise if an employee was dismissed for exercising that ‘workplace right’; and(e) Jetstar’s interpretation would be contrary to the rationale for the payment of overtime,being to compensate an employee for working outside their usual pattern of hours andto act as a disincentive for employers to require employees to work excessive hours;see: Re Glass Workers Award (1953) 76 CAR 17.[17]In oral submissions, Mr Gibian stressed that Jetstar had only altered its interpretationand application of c 17 shortly after the 2016 Agreement had been approved and after manyyears of a long standing practice to the contrary. Mr Gibian emphasised that one of theimportant approaches to agreement interpretation is that an overly literal and/or technicalapproach is to be eschewed. The interpretive task is to have regard to industrial reality,context and history, particularly where the same wording has been used in successiveagreements.[18]Counsel put that there is no definition of what constitutes ‘work time’, in a generalsense, in the 2016 Agreement and in that context, it is capable of having different meanings.7

[2017] FWC 2535The task of interpreting words is to give them a sensible operation, consistent with themeaning of the words and their context when views as a whole. He relied on a recent decisionof the Full Bench in Construction, Forestry, Mining and Energy Union v BroadspectrumAustralia Pty Ltd [2017] FWCFB 269 (Broadspectrum) which held that compulsory training,required to be undertaken by employees, constituted ‘work’ for the purposes of cl 19 of theBroadspectrum Agreement. Mr Gibian put that the same approach should be applied in thiscase, where the word ‘work’ is capable of different meanings in different contexts.[19]In analysing the words of cl 17, Mr Gibian used an example of a part time employeewho is ordinarily rostered on Monday to Thursday shifts, but is sick from Monday toWednesday and is called in on the Friday to work an additional shift. On Jetstar’sinterpretation, the employee would not receive overtime for that shift. If the employee had notbeen sick and the 38 hour threshold was reached, he/she would have been entitled to receiveovertime pay. Similarly, if a full time employee takes two weeks leave in the first half of theroster period, then in the successive two weeks, the employee may be forced to work verylong hours, without any overtime entitlement arising. Counsel also gave the example of a parttime employee who is guaranteed 20 hours a week under cl 12.4, and the employee wouldhave to work 20 hours a week, in addition to any authorised leave in that week, to avoidJetstar being in breach of the 2016 Agreement.[20]It was argued that these examples demonstrate an absurd outcome if Jetstar’sinterpretation of c 17 was to prevail. Mr Gibian noted that cl 14.4, in respect to a downturn inlabour requirements, provides a note which states, ‘work and leave hours will be includedwhen calculating the average hours’. This squarely answered the Company’s argument thatthere is no other specific provision which deal with the interpretation for which the Unioncontends. In addition, Jetstar’s submissions adopt the very approach which is generallydiscouraged - that is to adopt an overly literal or technical interpretation. Nevertheless, MrGibian acknowledged that while cl 17 could have been better drafted, the Commission mustdo its best to ensure a logical and sensible outcome.[21]Mr Gibian also relied on the rostered days off (‘RDO’) provision in the Agreement.One RDO is accrued every month, which includes periods when the employee is onauthorised leave. On Jetstar’s approach, one RDO a month might actually require six weeks toaccrue, if the employee takes two weeks leave in the relevant period.8

[2017] FWC 2535[22]Mr Gibian reiterated the Union’s submissions concerning s 62 of the Act dealing withmaximum weekly hours. He said that while the statutory context is not determinative, it isrelevant. Counsel conceded that s 62 did not expressly deal with overtime.[23]Mr Gibian dealt with the past history by reference to the evidence of Mr O’Brien andthe longstanding practice which was altered by Jetstar in October/November 2016. Indeed, theterms of the cl 17 were rolled over from predecessor agreements. This longstanding practicewas a clear indication of the intentions of the parties as to the interpretation of cl 17. MrGibian added that there is nothing in the new cl 17.3, which suggests a change to thetraditional approach. He emphasised this new subclause had been at the Union’s initiative not Jetstar’s.For Jetstar[24]In written submissions it was put that the central question to be determined by theCommission is whether paid leave or other paid absences constitute ‘work’ in the sense that itcounts towards the weekly hours threshold for calculating whether an entitlement to overtimearises.[25]It was submitted that:a) the clear and unambiguous meaning of ‘work’, discernible from the 2016 Agreement,does not require reference to extrinsic materials; andb) even if any ambiguity exists, the recent conduct of the parties demonstrates a clearunderstanding of ‘work’, within cl 17, which is against the Union’s construction.[26]It was further put that ‘work’ means the actual performance of duties and is a differentconcept to ‘ordinary time’, ‘ordinary hours of work’ or ‘rostered hours’. It can also bedistinguished from paid authorised absences. Section 62 of the Act is not relevant because thedefinition of ‘work’ is referable to its usage throughout the 2016 Agreement. These referencesinclude:(a)Clause 10.10 provides for the maintenance of the ‘status quo’ in the way workis performed whilst a dispute is on foot;9

[2017] FWC 2535[27](b)Clause 16.2 provides for the payment of higher duties where an employeeworks higher duties for part or all of a shift;(c)Clause 18.3.1 provides that an overtime meal allowance is payable to anemployee who works more than 1 hour of overtime, and then after eachsubsequent 4 hours of overtime worked;(d)Clause 20.2 provides for the payment of double time where an employeeworks a shift whose start and/or finish time is changed by more than 30minutes with less than 48 hours’ notice;(e)Clause 23 provides for meal breaks according to time actually worked;(f)Clause 28 provides for public holiday penalties to be paid for time actuallyworked on a public holiday; and(g)Clause 31 provides for the provision of notice on termination, and allows theperiod to be worked, or for a payment to be made in lieu of it being worked.Jetstar added that cl 17.1 expressly takes into account ‘RDO entitlements’, butincludes no mention of paid leave or authorised absences. The manner in which RDOs areaccrued, recognising actual performance of work, is necessary before an RDO is paid. This isidentical to the requirement to perform actual work before overtime is paid. Clause 14.4 alsoexpressly distinguishes between ‘work’ and ‘leave hours’.[28]In addition, cl 17.4 provides for casuals to be paid overtime where they work morethan 7.6 hours a day. As casuals do not accrue, nor are they entitled to paid leave, ‘work’ in cl17.4 cannot logically be intended to include periods of paid leave or authorised absences.[29]Even if ambiguity is found to exist, the new cl 17.3 prescribes for overtime paymentswhere an employee works on seven consecutive days. This was understood by both parties tomean that payment of overtime on the seventh consecutive day required work to be actuallyperformed on the seventh consecutive day. This is consistent with the correct interpretation ofcl 17.[30]The Company rejected the Union’s reliance on s 62(4) of the Act, as the 2016Agreement does not incorporate the definition of ‘work’ from that section of the Act. Theabsence of any specific inclusion of leave in cl 17 demonstrates the word has its plain,common sense meaning. In addition, the Act does not require penalties for performingovertime; penalties are set by the relevant industrial instrument.10

[2017] FWC 2535[31]Finally, it was said that the Union’s submission concerning adverse action wasmisplaced as it assumes a workplace right exists when that very question turns upon theproper construction of cl 17. It is a ‘cart before the horse’ argument.[32]In oral submissions, Mr Ogilvie acknowledged the 2016 Agreement contains nodefinition of ‘work’ or ‘work time’ and is used in a wide array of contexts throughout the2016 Agreement, including within cl 17 itself. He stressed that the entitlement to overtimeonly arises in circumstances where an employee is physically at work for more than 8 hoursper day or 38 hours in a pay week.[33]As to the principles of interpretation, Mr Ogilvie put that the Commission is not free togive effect to some anteriorly derived notion of what would be fair and just, regardless of theplain and ordinary meaning of the words in the Agreement.[34]Mr Ogilvie advised that the Company employs 350 to 360 employees; the vastmajority of whom are part time and who will be impacted more than full time employees. MrOgilvie said that there is no inconsistent approach to cl 14.4 and 12.4, because the clauses dodifferent things in respect to minimum work hours. Clause 12.4 deals with a guarantee of 20hours per week and cl 14.4 deals with a rolling three month average. Predicted leave isrostered during that longer period. Mr Ogilvie said it should always be borne in mind thatovertime entitlements only arise by virtue of the employees having undertaken more hours ofwork than their roster and beyond 38 hours a week.[35]Mr Ogilvie said that s 62(4) of the Act has no application because that provision is forthe specific purpose of calculating maximum hours; not for any other purpose.[36]As to the Union’s submissions going to the long standing practice at Sydney, Brisbaneand Melbourne, Mr Ogilvie noted that Adelaide has a long standing practice which reflectsJetstar’s interpretation and there was no evidence of what applies at Cairns. It followed, therewas no consistency in approach. Other of Jetstar’s ports use third party providers for theirground handling services.11

[2017] FWC 2535[37]Mr Ogilvie put that whether a workplace right actually exists ultimately depends on aproper construction of the clause. If there is no entitlement to overtime, it cannot be said thatdenying the right to overtime is an adverse action.[38]Mr Ogilvie distinguished the decision in Broadspectrum by observing that the caseconcerned different circumstances; namely, compulsory training. That case is not authority forthe proposition that ‘work’ includes personal leave or any other form of leave.[39]In reply, Mr Gibian gave a further example of an employee who works for five or six10 hour shifts, or even 12 hour shifts, without reaching the threshold and then has two weeksleave within that roster period. This is a practical outcome which would be inconvenient andunjust. Mr Gibian also said that the concept of 20 hours of ‘guaranteed’ part time work cannotbe reconciled, if an employee takes three days of leave and then has to be ‘guaranteed’ 20hours of actual physical work.[40]Mr Gibian referred again to the purpose of overtime to compensate employees forworking outside of their usual pattern of hours and serves as a disincentive to employersrequiring employees to work excessive hours. He stressed that Jetstar’s approach, particularlyfor part time employees who work outside the usual pattern of hours, would result in them notreceiving any compensation by way of overtime payments.CONSIDERATION[41]Stripped to its fundamental essence, the question for the Commission to determine iswhether the words ‘works’ or ‘worked’ in cl 17 should be read to include periods of all formsof approved leave (not only personal/carer’s leave) for the purposes of calculating overtime. Itis apparent from the submissions of the parties, that this is the crux of their dispute.Accordingly, I intend to approach the matter from that standpoint, which begins with theprinciples to be applied by the Commission when interpreting the words in an industrialagreement; in this case an enterprise agreement.[42]In Cape Australia Holdings Pty Ltd T/A Total Corrosion Control Pty Ltd vConstruction, Forestry, Mining and Energy Union [2012] FWAFB 3994 the Full Bench ofFair Work Australia (as the Commission was then styled) said at paras 7-9:12

[2017] FWC 2535‘[7] As to the general approach to the construction of enterprise agreements theobservations of French J, as he then was, in City of Wanneroo v Australian Municipal,Administrative, Clerical and Services Union (Wanneroo)are apposite:“[53] The construction of an award, like that of a statute, begins with aconsideration of the ordinary meaning of its words. As with the task ofstatutory construction regard must be paid to the context and purpose of theprovision or expression being construed. Context may appear from the text ofthe instrument taken as a whole, its arrangement and the place in it of theprovision under construction. It is not confined to the words of the relevant Actor instrument surrounding the expression to be construed. It may extend to‘.the entire document of which it is a part or to other documents with whichthere is an association’. It may also include ‘.ideas that gave rise to anexpression in a document from which it has been taken’ - Short v FW HercusPty Ltd (1993) 40 FCR 511 at 518 (Burchett J); Australian Municipal, Clericaland Services union v Treasurer of the Commonwealth of Australia (1998) 80IR 345 (Marshall J).”[8] While his Honour’s observations were made in the context of interpreting an awardthe same principles apply to the interpretation of enterprise agreements. For example,similar observations were made by their Honours Gummow, Hayne and Heydon JJin Amcor v CFMEU:“Clause 55.1.1 must be read in context. It is necessary, therefore, to haveregard not only to the text of cl 55.1.1, but also to a number of other matters:first, the other provisions made by cl 55; secondly, the text and operation of theAgreement both as a whole and by reference to other particular provisionsmade by it; and, thirdly, the legislative background against which theAgreement was made and in which it was to operate.”[9] The fact that the instrument being construed is an enterprise agreement is itself animportant contextual consideration. As French J observed in Wanneroo, at paragraph[57]:“It is of course necessary, in the construction of an award, to remember, as acontextual consideration, that it is an award under consideration. Its wordsmust not be interpreted in a vacuum divorced from industrial realities - City ofWanneroo v Holmes (1989) 30 IR 362 at 378-379 and cases there cited. Thereis a long tradition of generous construction over a strictly literal approachwhere industrial awards are concerned - see eg Geo A Bond and Co. Ltd (in liq)v McKenzie [1929] AR (NSW) 498 at 503-504 (Street J). It may be that thismeans no more than that courts and tribunals will not make too much ofinfelicitous expression in the drafting of an award nor be astute to discernabsurdity or illogicality or apparent inconsistencies. But while fractured andillogical prose may be met by a generous and liberal approach to construction, Irepeat what I said in City of Wanneroo v Holmes (at 380):13

[2017] FWC 2535“Awards, whether made by consent or otherwise, should make senseaccording to the basic conventions of the English language. They bindthe parties on pain of pecuniary penalties.”’[43]In Australian Workers’ Union, West Australia Branch v Co-operative Bulk HandlingLimited [2010] FWAFB 4801, the Full Bench of FWA reemphasised the first principle ofagreement interpretation – that a finding should first be made as to whether the word/s areambiguous, uncertain or capable of more than one meaning. It is only after making such afinding that the Commission may look to ‘surrounding circumstances’ to establish themeaning of the words. At paras 12-13, the Full Bench observed:‘[12] Neither Swire nor Watson is authority for the proposition that in resolving thequestion of whether terms of an agreement are ambiguous and susceptible of morethan one meaning, regard may not be held to extrinsic material. In so holding thecommissioner erred. Because the manner in which agreements should be construed isin issue in this appeal, it is worthwhile extracting, in full but omitting footnotes, thedistillation of the law by Vice President Lawler in Watson:“[8] There are well established principles under the general law for theconstruction of contracts. Those principles are generally applicable in theconstruction of certified agreements. For example, in Telstra Corporation Ltdv CEPU a Full Bench of the Commission was concerned with applications tovary a number of certified agreements and, in the course of its decision,summarised the principles governing the resolution of ambiguity in a certifiedagreem

Union’) on 13 December 2016.The dispute is with Jetstar Services Pty Ltd (‘Jetstar’or‘the respondent’).It concerns a question of whether Jetstar ground crew employees are entitled to have periodsof personal andothe