FAIR WORK COMMISSION DECISION - Cdassociates .au

thereto; Most notably The Australasian Meat Industry Employees Union v GoldenCockerel Pty Limited [2014] FWCFB 7447 (‘Golden Cockerel’.) I will come backto those principles and authorities later, suffice to observe at this point that theparties are ad idem as to the relevant principles to be applied in this case.Unsurprisingly, they strenuously disagree as to the outcome of the application ofthose 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 confersan entitlement on a full time employee to be paid overtime when the employeeworks for a longer period than his or her rostered shift or an average of more than38 hours per week over a roster cycle; and for a part time employee who worksmore than eight hours per day or 38 hours in a pay week. Overtime should bepayable, irrespective of any leave entitlements accessed during the pay week orroster period. In determining whether the employee has worked more than 38hours, authorised leave entitlements should be taken into account.[16] The Union submitted that a number of factors support this interpretation of cl17:(a) The ordinary common sense understanding of the words used supports aproposition that any permitted or authorised leave is part of an employee’swork time;(b) Section 62 of the Act prescribes maximum hours of work and s 62(4)defines hours of work as including ‘any hours of leave, or absence, whetherpaid or unpaid, that the employee takes in the week and that areauthorised.’. It may be assumed the parties intended ‘work time’ to havethe same meaning as in s 62 of the Act;(c) The circumstances at the time the 2016 Agreement was made; namely,the long standing practice in Sydney, Melbourne and Brisbane, to includeperiods of leave when calculating overtime. Past practice supports theconclusion for which the Union contends. This is further supported by thefact that:i. Jetstar did not seek to alter the long standing practice duringthe negotiations for the 2016 Agreement; andii. The equivalent provision in the EGH Agreement was simplyrolled over.(d) Jetstar’s interpretation gives rise to the provision being considered an‘objectionable term’ and therefore, ‘unlawful’ under s 194 of the Act.

Moreover, it might be said that cl 17 involves the exercise of a ‘workplaceright’ being for employees to take personal or other leave under theAgreement and the NES. Adverse action would arise if an employee wasdismissed for exercising that ‘workplace right’; and(e) Jetstar’s interpretation would be contrary to the rationale for the paymentof overtime, being to compensate an employee for working outside theirusual pattern of hours and to act as a disincentive for employers to requireemployees 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 itsinterpretation and application of c 17 shortly after the 2016 Agreement had beenapproved and after many years of a long standing practice to the contrary.Mr Gibian emphasised that one of the important approaches to agreementinterpretation is that an overly literal and/or technical approach 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 successive agreements.[18] Counsel put that there is no definition of what constitutes ‘work time’, in ageneral sense, in the 2016 Agreement and in that context, it is capable of havingdifferent meanings. The task of interpreting words is to give them a sensibleoperation, consistent with the meaning of the words and their context when viewsas a whole. He relied on a recent decision of the Full Bench in Construction,Forestry, Mining and Energy Union v Broadspectrum Australia Pty Ltd [2017]FWCFB 269 (Broadspectrum) which held that compulsory training, required to beundertaken by employees, constituted ‘work’ for the purposes of cl 19 of theBroadspectrum Agreement. Mr Gibian put that the same approach should beapplied in this case, where the word ‘work’ is capable of different meanings indifferent contexts.[19] In analysing the words of cl 17, Mr Gibian used an example of a part timeemployee who is ordinarily rostered on Monday to Thursday shifts, but is sickfrom Monday to Wednesday and is called in on the Friday to work an additionalshift. On Jetstar’s interpretation, the employee would not receive overtime for thatshift. If the employee had not been sick and the 38 hour threshold was reached,he/she would have been entitled to receive overtime pay. Similarly, if a full timeemployee takes two weeks leave in the first half of the roster period, then in thesuccessive two weeks, the employee may be forced to work very long 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 employeewould have to work 20 hours a week, in addition to any authorised leave in thatweek, to avoid Jetstar 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 adownturn in labour requirements, provides a note which states, ‘work and leavehours will be included when calculating the average hours’. This squarelyanswered the Company’s argument that there is no other specific provision whichdeal with the interpretation for which the Union contends. In addition, Jetstar’ssubmissions adopt the very approach which is generally discouraged - that is toadopt an overly literal or technical interpretation. Nevertheless,Mr Gibian acknowledged that while cl 17 could have been better drafted, theCommission must do its best to ensure a logical and sensible outcome.[21] Mr Gibian also relied on the rostered days off (‘RDO’) provision in theAgreement. One RDO is accrued every month, which includes periods when theemployee is on authorised leave. On Jetstar’s approach, one RDO a month mightactually require six weeks to accrue, if the employee takes two weeks leave in therelevant period.[22] Mr Gibian reiterated the Union’s submissions concerning s 62 of the Actdealing with maximum weekly hours. He said that while the statutory context isnot determinative, it is relevant. Counsel conceded that s 62 did not expressly dealwith overtime.[23] Mr Gibian dealt with the past history by reference to the evidence of MrO’Brien and the longstanding practice which was altered by Jetstar inOctober/November 2016. Indeed, the terms of the cl 17 were rolled over frompredecessor agreements. This longstanding practice was a clear indication of theintentions of the parties as to the interpretation of cl 17. Mr Gibian added that thereis nothing in the new cl 17.3, which suggests a change to the traditional 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 bythe Commission is whether paid leave or other paid absences constitute ‘work’ inthe sense that it counts towards the weekly hours threshold for calculating whetheran entitlement to overtime arises.[25] It was submitted that:a) the clear and unambiguous meaning of ‘work’, discernible from the 2016Agreement, does not require reference to extrinsic materials; andb) even if any ambiguity exists, the recent conduct of the partiesdemonstrates a clear understanding of ‘work’, within cl 17, which is againstthe Union’s construction.

[26] It was further put that ‘work’ means the actual performance of duties and is adifferent concept to ‘ordinary time’, ‘ordinary hours of work’ or ‘rostered hours’.It can also be distinguished from paid authorised absences. Section 62 of the Act isnot relevant because the definition of ‘work’ is referable to its usage throughout the2016 Agreement. These references include:(a) Clause 10.10 provides for the maintenance of the ‘status quo’ in the waywork is performed whilst a dispute is on foot;(b) Clause 16.2 provides for the payment of higher duties where anemployee works 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 timeactually worked on a public holiday; and(g) Clause 31 provides for the provision of notice on termination, and allowsthe period to be worked, or for a payment to be made in lieu of it beingworked.[27] Jetstar added that cl 17.1 expressly takes into account ‘RDO entitlements’, butincludes no mention of paid leave or authorised absences. The manner in whichRDOs are accrued, recognising actual performance of work, is necessary before anRDO is paid. This is identical to the requirement to perform actual work beforeovertime is paid. Clause 14.4 also expressly distinguishes between ‘work’ and‘leave hours’.[28] In addition, cl 17.4 provides for casuals to be paid overtime where they workmore than 7.6 hours a day. As casuals do not accrue, nor are they entitled to paidleave, ‘work’ in cl 17.4 cannot logically be intended to include periods of paidleave or authorised absences.[29] Even if ambiguity is found to exist, the new cl 17.3 prescribes for overtimepayments where an employee works on seven consecutive days. This wasunderstood by both parties to mean that payment of overtime on the seventh

consecutive day required work to be actually performed on the seventh consecutiveday. This is consistent with the correct interpretation of cl 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 theAct. The absence of any specific inclusion of leave in cl 17 demonstrates the wordhas its plain, common sense meaning. In addition, the Act does not requirepenalties for performing overtime; penalties are set by the relevant industrialinstrument.[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 turnsupon the proper construction of cl 17. It is a ‘cart before the horse’ argument.[32] In oral submissions, Mr Ogilvie acknowledged the 2016 Agreement containsno definition of ‘work’ or ‘work time’ and is used in a wide array of contextsthroughout the 2016 Agreement, including within cl 17 itself. He stressed that theentitlement to overtime only arises in circumstances where an employee isphysically at work for more than 8 hours per day or 38 hours in a pay week.[33] As to the principles of interpretation, Mr Ogilvie put that the Commission isnot free to give effect to some anteriorly derived notion of what would be fair andjust, regardless of the plain 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 timeemployees. Mr Ogilvie said that there is no inconsistent approach to cl 14.4 and12.4, because the clauses do different things in respect to minimum work hours.Clause 12.4 deals with a guarantee of 20 hours per week and cl 14.4 deals with arolling three month average. Predicted leave is rostered during that longer period.Mr Ogilvie said it should always be borne in mind that overtime entitlements onlyarise by virtue of the employees having undertaken more hours of work than theirroster and beyond 38 hours a week.[35] Mr Ogilvie said that s 62(4) of the Act has no application because thatprovision is for the specific purpose of calculating maximum hours; not for anyother purpose.[36] As to the Union’s submissions going to the long standing practice at Sydney,Brisbane and Melbourne, Mr Ogilvie noted that Adelaide has a long standingpractice which reflects Jetstar’s interpretation and there was no evidence of whatapplies at Cairns. It followed, there was no consistency in approach. Other ofJetstar’s ports use third party providers for their ground handling services.

[37] Mr Ogilvie put that whether a workplace right actually exists ultimatelydepends on a proper construction of the clause. If there is no entitlement toovertime, it cannot be said that denying the right to overtime is an adverse action.[38] Mr Ogilvie distinguished the decision in Broadspectrum by observing that thecase concerned different circumstances; namely, compulsory training. That case isnot authority for the proposition that ‘work’ includes personal leave or any otherform of leave.[39] In reply, Mr Gibian gave a further example of an employee who works forfive or six 10 hour shifts, or even 12 hour shifts, without reaching the threshold andthen has two weeks leave within that roster period. This is a practical outcomewhich would be inconvenient and unjust. Mr Gibian also said that the concept of20 hours of ‘guaranteed’ part time work cannot be reconciled, if an employee takesthree days of leave and then has to be ‘guaranteed’ 20 hours of actual physicalwork.[40] Mr Gibian referred again to the purpose of overtime to compensate employeesfor working outside of their usual pattern of hours and serves as a disincentive toemployers requiring employees to work excessive hours. He stressed that Jetstar’sapproach, particularly for part time employees who work outside the usual patternof hours, would result in them not receiving any compensation by way of overtimepayments.CONSIDERATION[41] Stripped to its fundamental essence, the question for the Commission todetermine is whether the words ‘works’ or ‘worked’ in cl 17 should be read toinclude periods of all forms of approved leave (not only personal/carer’s leave) forthe purposes of calculating overtime. It is apparent from the submissions of theparties, that this is the crux of their dispute. Accordingly, I intend to approach thematter from that standpoint, which begins with the principles to be applied by theCommission when interpreting the words in an industrial agreement; in this case anenterprise 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 FullBench of Fair Work Australia (as the Commission was then styled) said at paras 79:‘[7] As to the general approach to the construction of enterprise agreementsthe observations of French J, as he then was, in City of Wanneroo vAustralian Municipal, Administrative, Clerical and Services Union(Wanneroo)are apposite:

“[53] The construction of an award, like that of a statute, begins witha consideration of the ordinary meaning of its words. As with the taskof statutory construction regard must be paid to the context andpurpose of the provision or expression being construed. Context mayappear from the text of the instrument taken as a whole, itsarrangement and the place in it of the provision under construction. Itis not confined to the words of the relevant Act or instrumentsurrounding the expression to be construed. It may extend to ‘.theentire document of which it is a part or to other documents withwhich there is an association’. It may also include ‘.ideas that gaverise to an expression in a document from which it has been taken’- Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at 518 (BurchettJ); Australian Municipal, Clerical and Services union v Treasurer ofthe Commonwealth of Australia (1998) 80 IR 345 (Marshall J).”[8] While his Honour’s observations were made in the context ofinterpreting an award the same principles apply to the interpretation ofenterprise agreements. For example, similar observations were made bytheir Honours Gummow, Hayne and Heydon JJ in Amcor v CFMEU:“Clause 55.1.1 must be read in context. It is necessary, therefore, tohave regard not only to the text of cl 55.1.1, but also to a number ofother matters: first, the other provisions made by cl 55; secondly, thetext and operation of the Agreement both as a whole and by referenceto other particular provisions made by it; and, thirdly, the legislativebackground against which the Agreement was made and in which itwas to operate.”[9] The fact that the instrument being construed is an enterprise agreement isitself an important contextual consideration. As French J observedin Wanneroo, at paragraph [57]:“It is of course necessary, in the construction of an award, toremember, as a contextual consideration, that it is an award underconsideration. Its words must not be interpreted in a vacuum divorcedfrom industrial realities - City of Wanneroo v Holmes (1989) 30 IR362 at 378-379 and cases there cited. There is a long tradition ofgenerous construction over a strictly literal approach where industrialawards are concerned - see eg Geo A Bond and Co. Ltd (in liq) vMcKenzie [1929] AR (NSW) 498 at 503-504 (Street J). It may be thatthis means no more than that courts and tribunals will not make toomuch of infelicitous expression in the drafting of an award nor beastute 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 ofWanneroo v Holmes (at 380):“Awards, whether made by consent or otherwise, should makesense according to the basic conventions of the Englishlanguage. They bind the parties on pain of pecuniarypenalties.”’[43] In Australian Workers’ Union, West Australia Branch v Co-operative BulkHandling Limited [2010] FWAFB 4801, the Full Bench of FWA reemphasised thefirst principle of agreement interpretation – that a finding should first be made as towhether the word/s are ambiguous, uncertain or capable of more than one meaning.It is only after making such a finding that the Commission may look to‘surrounding circumstances’ to establish the meaning of the words. At paras 12-13,the Full Bench observed:‘[12] Neither Swire nor Watson is authority for the proposition that inresolving the question of whether terms of an agreement areambiguous and susceptible of more than one meaning, regard may notbe held to extrinsic material. In so holding the commissioner erred.Because the manner in which agreements should be construed is inissue in this appeal, it is worthwhile extracting, in full but omittingfootnotes, the distillation of the law by Vice President Lawlerin Watson:“[8] There are well established principles under thegeneral law for the construction of contracts. Thoseprinciples are generally applicable in the construction ofcertified agreements. For example, in TelstraCorporation Ltd v CEPU a Full Bench of theCommission was concerned with applications to vary anumber of certified agreements and, in the course of itsdecision, summarised the principles governing theresolution of ambiguity in a certified agreement:“[33] The judgment of the High Courtin Codelfa Construction Pty Ltd v StateRail Authority of NSW established widelyaccepted principles for resolvingambiguity in contracts. In that

Services Pty Ltd (‘Jetstar’ or ‘the respondent’). It concerns a question of whether Jetstar ground crew employees are entitled to have periods of personal and other leave, which fall during a pay week or roster cycle, taken into account when calculating overtim