Fair Work Act 2009

s.739 - Dispute resolution

"Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union

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

• [1] The "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU) and Regal Cream Products Pty Ltd (Regal Cream) are in dispute about the payment to night shift employees working shifts commencing at 8:00pm on one day and ending at 4:00pm the next day for the hours worked after midnight when the next day is a public holiday. This shift arrangement is worked from Sunday through to Thursday in each week. I will refer to this shift arrangement as the "straddling shift arrangement". By its application made under s 739 of the Fair Work Act 2009 (Act) dated 4 March 2022, the AMWU applies for the Commission to deal with the dispute in accordance with the dispute settlement term as set out in clause 13 of the Bulla Dairy Foods Colac Maintenance Enterprise Agreement 2021-2023 (Agreement). The dispute was not resolved by conciliation and so it is necessary to determine the dispute by arbitration, a course authorised by step 4 of clause 13.1.3 of the Agreement.

• [2] After considering the submissions of the parties as to the question or questions that should be determined, I consider that in order to resolve the dispute by arbitration an answer to the following question is appropriate:

On a proper construction of the Bulla Dairy Foods Colac Maintenance Enterprise Agreement 2021-2023, if night shift workers begin a shift the day before a Public Holiday and the shift extends into the Public Holiday, should the relevant workers be paid penalty rates for the hours worked on the Public Holiday?

• [3] Regal Cream contended that the proper resolution of the dispute should not only address the above question but also "deal with the broader issue of appropriate treatment by way of penalty payment and/or paid time off during public holidays under the [Agreement] where normal shift arrangements (night shift) cross over 2 days, to avoid further disputes being raised" requiring intervention by the Commission. The difficulty with this submission is that the AWMU does not contend there is any dispute about public holidays beyond that described in [1] and there is no evidence of the existence of such a dispute. For example, there is no evidence that the issue said to be in dispute has been raised under the procedure in clause 13. I therefore do not consider that it is appropriate to deal, in this application, with the additional matter raised by Regal Cream.

• [4] In short compass, the AMWU contends that on a proper construction of the Agreement, employees working the straddling shift arrangement in the circumstances posited by the question are entitled to be paid at triple time for all hours worked after midnight on the day a public holiday falls. It contends that clause 39.6 of the Agreement is clear and unambiguous with the consequence that all work performed on a public holiday is to be paid at triple time. For its part Regal Cream says that on its proper construction, the Agreement allows only for the payment of public holiday penalty rates in circumstances where either the shift commences on a day that is a public holiday or where a shift straddles a day that is a public holiday and one that is not, public holiday penalties are only payable if the majority of the shift falls on a day that is a public holiday. For this second contention, Regal Cream relies upon provisions of the Manufacturing and Associated Industries and Occupations Award 2020 (Award) the terms of which are incorporated into the Agreement. In the result as work upon the straddling shift arrangement is evenly spread as between one day and the next, public holiday penalties will be paid for the whole of the shift only when the shift commences on a day that is a public holiday.

• [5] Self-evidently the dispute is to be resolved by properly construing the Agreement in its application to the straddling shift arrangement at issue. The construction of provisions of an enterprise agreement begins with a consideration of the ordinary meaning of the words, read in context, taking account of the evident purpose of the provisions or expressions being construed. Context may be found in the provisions of the agreement taken as a whole, or in their arrangement and place in the agreement. The statutory framework under which the agreement is made or in which it operates may also provide context, as might an antecedent instrument or instruments from which a particular provision or provisions might have been derived. The industrial context in which an agreement is made and operates is also relevant. Thus, the language of an agreement is to be understood in the light of its industrial context and purpose, not in a vacuum or divorced from industrial realities. But context is not itself an end, and a consideration of the language contained in the text of the agreement remains the starting point and the end point to the task of construction. A purposive approach to interpretation is appropriate, not a narrow or pedantic approach.[1]

• [6] Clause 4 of the Agreement contains definitions including the following:

4.3. "Night Shift" means any shift finishing after midnight and at/or before 8.00am or any shift commencing between midnight and 3:29am".

4.7. "Shift worker" means an employee, other than a day worker, whose ordinary hours are worked on any five days of the week.

4.8. "Continuous Shift Work" means work carried on with consecutive shifts of employees throughout the 24 hours of each day, Monday to Sunday inclusive, without interruption, except during breakdowns or meal breaks or due to unavoidable causes beyond the control of the Employer.

• [7] The employees engaged upon the straddling shift arrangement are shift workers as defined working a night shift as defined. There is no dispute that these employees are not engaged upon continuous shift work as defined.

• [8] Clause 8 of the Agreement sets out the relationship between the Agreement and the Award. By clause 8.1 all the provisions of the Award are incorporated as terms of the Agreement. Clause 8.2 deals with inconsistency between the Agreement and the Award and provides that where there is any inconsistency between the two instruments, the Agreement will take precedence to the extent of the inconsistency.

• [9] Inconsistency between the Agreement and the Award may be identified in several ways. A particular provision of the Agreement may be directly inconsistent with a provision and the Award, for example where there cannot be compliance with both provisions or where a right or benefit is conferred by one instrument which the other instrument would take away. Provisions as between instruments may be inconsistent because, for example, a provision of the Award has the effect of altering, impairing or detracting from one or more provisions of the Agreement in a way that would create a burden that amounts to inconsistency. Provisions will also be likely inconsistent as between instruments if one operates in a way that is repugnant to the other. Indirect consistency might arise when a provision in the Agreement so comprehensively deals with a subject matter that on its proper construction it leaves no room for the operation of the corresponding provision in the Award. In this sense, the Agreement provision is said to "cover the field" in relation to the subject matter.

• [10] It is convenient here to dispose of one of the submissions made by Regal Cream which is to the effect that "only if there is an inconsistency with the award does the agreement provision apply". This submission misunderstands the nature of the inconsistency provision in the Agreement and the dominance afforded to the Agreement terms over the incorporated Award terms in the event of inconsistency. The Agreement terms operate at all times. The Award terms will also operate when there is no inconsistency between the Award terms and the Agreement but where there is an inconsistency between a term or terms of the instruments, the Award terms yield to the Agreement terms to the extent of the identified inconsistency.

• [11] Clause 39 of the Agreement deals with public holidays and relevantly provides:

39.1.1. An employee shall be entitled to holidays on the following days: New Year's Day, Good Friday, Easter Saturday, Easter Monday, Christmas Day, Boxing Day, Australia Day, Anzac Day, Queen's Birthday, Labour Day, Grand Final Eve; and Union Picnic Day (Easter Tuesday) or Melbourne Cup Day.

39.2.1. Christmas Day is a non-scheduled working day.

39.3.1. When Christmas Day is Saturday or a Sunday, a holiday in lieu thereof shall be observed on 27 December.

39.3.2. When Boxing Day is a Saturday or a Sunday, a holiday in lieu thereof shall be observed on 28 December.

39.3.3. When New Year's Day or Australia Day is a Saturday or Sunday, a holiday in lieu thereof shall be observed on the next Monday.

39.4.1. Where in a State, Territory or locality, public holidays are declared or prescribed on days other than those set out in clause 39.1 and 39.3 above, those days shall constitute holidays for the purpose of this Agreement.

39.6.1. All work performed on a public holiday (as prescribed in clause 39.1) shall be payable at triple time. Such rates shall be in substitution for and not cumulative upon shift allowances provided for in clause 31.1.11, except when such holiday occurs on days Monday to Friday inclusive.

39.6.2. A day worker ready, available and willing to work, which is required to commence their shift on a public holiday, shall be paid a minimum of 4 hours at a rate of double time and a half.

39.6.3. A shift worker ready, available and willing to work, which is rostered to commence their shift on a public holiday, shall be paid a minimum of 7.6 hours at a rate of triple time.

39.6.4. A continuous 12 hour shift worker, available and willing to work, which is rostered to commence their shift on a public holiday, shall be paid a minimum of 12 hours at a rate of triple time (of the employee's ordinary hourly rate).

39.6.5. Provided further that when any such public holiday occurs on a shift worker's rostered day off, he shall be given:

39.6.5.1. Within four weeks following the date on which such holidays occurred: 39.6.5.2. One extra days pay; or

39.6.5.4. One day shall be added to his annual leave; or

39.6.5.5. In the case of a shift worker not qualifying for annual leave and sub clause (2) and (3) hereof has not been applied one day's pay shall be added to the payment in lieu of annual leave.

• [12] Clause 39.6.1 has the effect that hours of work that are performed by an employee on a day that is a public holiday are to be paid at the rate of triple time. The reference to clause 31.1.11 in clause 39.6.1 is clearly erroneous since the first mentioned clause does not deal with shift allowances. These are to be found in clauses 31.1.12 (which is only a heading), and substantively in 31.1.13 and 31.1.14.

• [13] Clauses 39.6.2 to 39.6.4 are concerned with the minimum payment and rate of that payment for the identified category of employee who is rostered to work and commences working a shift on a day that is a public holiday. Relevantly, a shift worker working the straddling shift arrangement, who is rostered to work a shift that commences at 8:00pm on a day that is a public holiday is guaranteed by clause 39.6.3 to a minimum payment of 7.6 hours at a rate of triple time. This is so even though the following day upon which the shift will conclude is not a public holiday.

• [14] In the circumstances posited by the question earlier set out, clause 39.6.3 has no application since the shift commences on a day that is not a public holiday.

• [15] Clause 39.6.1 is concerned with when work is performed on a public holiday and the rate that would attach to the performance of that work on a public holiday. It is not concerned with when a shift might begin or end. That which is relevant to ascertaining whether there is any entitlement to the penalty payment for which clause 39.6.1 provides, is whether any work performed by an employee was work performed on a public holiday. In the straddling shift arrangement when a public holiday falls upon a day where the shift ends, an employee who works such as shift has plainly worked on a public holiday and so the hours so worked must under clause 39.6.1 be paid at triple time.

• [16] Clause 39.6.3 provides an additional benefit for shift workers working the straddled shift arrangement when the shift begins on a day this is a public holiday which clause 39.6.1 does not. Hours of the shift on the following day if it is not also a public holiday are paid at penalty rates. But clause 39.6.3 does not limit or affect the operation of clause 39.6.1 in relation to public holiday penalties for a shift worker when the circumstances in clause 39.6.3 do not apply. What is stark in the drafting is the absence of words of limitation - for example if intended to limit the operation of clause 39.6.1, an express exclusion of shift workers from the operation of clause 39.6.1 could have been included or clause 39.6.3 could readily have been drafted to read: "Despite clause 39.6.1, a shift worker will only be entitled to a public holiday penalty if the shift worker is ready, available and willing to work and is rostered to commence their shift on a public holiday, and in that case the shift worker shall be paid a minimum of 7.6 hours at a rate of triple time."

• [17] Thus, under clause 39.6 of the Agreement, in relation to work by a shift worker on a shift which involves work on a public holiday under the straddling shift arrangement, where the shift does not meet the condition in clause 39.6.3, all work performed on a public holiday during that shift is to be paid as specified in clause 39.6.1.

• [18] Clause 39 of the Agreement appears in a form that is different to clause 40 of the predecessor enterprise agreement, the Bulla Dairy Foods Colac Operations Enterprise Agreement 2020-2021 (2020 Agreement) which relevantly provided:

40.5.1. All work performed on a public holiday (as prescribed in clause 40.1) shall be payable at triple time. Such rates shall be in substitution for and not cumulative upon shift allowances provided for in clause 32.1.4, except when such holiday occurs on days Monday to Friday inclusive.

40.5.2. A Production day worker ready, available and willing to work, which is required to work on a public holiday, shall be paid a minimum of 4 hours at a rate of triple time. In the case of Driver & Maintenance Employees, this will be a minimum of 4 hours pay at a rate of double time and a half.

40.5.3. A shift worker ready, available and willing to work, which is rostered to work on a public holiday, shall be paid a minimum of 7.6 hours at a rate of triple time.

40.5.4. Provided further that when any such public holiday occurs on a shift worker's rostered day off, he shall be given:

40.5.4.1. Within four weeks following the date on which such holidays occurred:

40.5.4.4. One day shall be added to his annual leave; or

40.5.4.5. In the case of a shift worker not qualifying for annual leave and sub clause (2) and (3) hereof has not been applied one day's pay shall be added to the payment in lieu of annual leave

• [19] As should be readily apparent, clauses 40.5.1 and 40.5.4 of the 2020 Agreement are in all material respects the same as their counterparts found in clauses 39.6.1 and 39.6.5 of the Agreement.

• [20] Relevantly, clause 40.5.3 of the 2020 Agreement in its emanation as clause 39.6.3 of the Agreement has been amended by deleting the word "work" where second appearing and inserting the words "commence their shift" in its place.

• [21] Regal Cream led evidence which was to the effect that the amendment was intended to make clear that the shift that is to be regarded as a public holiday for which penalties will be paid is the shift that commences on the public holiday and that this was explained to employees as part of its process in seeking approval by employees of the Agreement.[2]

• [22] It relied on the amendment to make good its construction that employees working the straddling shift arrangement would only be paid public holiday penalty rates if the shift on which they worked commenced on a day that is public holiday.

• [23] Putting to one side the use to which what amounts to evidence of a subjective intention can be put, it seems plain enough that if the intended effect of the amendment was to limit an entitlement to public holiday penalties for a shift worker only to shifts which commenced on a day that was a public holiday, that intended effect was not fulfilled by the amendment.

• [24] Under clause 40.5.3 of the 2020 Agreement a shift worker ready, available and willing to work, and rostered to work on a public holiday, was entitled to be paid a minimum of 7.6 hours at a rate of triple time. Arguably, where any part of a straddling shift fell on the public holiday the employee became entitled to payment of 7.6 hours at the applicable penalty rate. But all provisions of an enterprise agreement are presumed to have work to do. Clause 40.5.1. of the 2020 Agreement provided that all work performed on a public holiday was payable at triple time. That clause applied to both shift workers and day workers. So much is clear from the clause itself which provided that the penalty rate is payable "in substitution for and not cumulative upon shift allowances".

• [25] Properly construed therefore, clause 40.5.3 of the 2020 Agreement is likely to have had operation in respect of a shift that is rostered to begin on a day that is a public holiday. To read it more broadly would render clause 40.5.1. of the 2020 Agreement otiose at least so far as a shift worker is concerned even though it is plainly applicable to a shift worker.

• [26] But in any event the amendment made to, and the operative effect of clause 39.6.3 of the Agreement, plainly gives work to clause 39.6.1 and it clarifies the circumstances in which a shift worker will be paid penalty rates for the whole shift with a minimum payment for 7.6 hours, whether the shift is wholly or partly completed on a day that is a public holiday.

• [27] It is next necessary to consider whether the incorporated Award terms have any impact on the public holiday penalty entitlements of employees working the straddling shift arrangement.

• [28] Clause 33 of the Award deals with penalty rates. Clause 33.3 deals with rates for shift workers and paragraph (j) thereof deal with rates for shift workers working Sunday and public holiday shifts. It provides:

(j) Rate for working on Sunday and public holiday shifts

(i) A continuous shiftworker on a rostered shift must be paid 200% of the ordinary hourly rate where the major portion of a shift falls on a Sunday or public holiday.

(ii) A shiftworker on other than continuous work must be paid 200% of the ordinary hourly rate for all time worked on a Sunday.

(iii) A shiftworker on other than continuous work must be paid 250% of the ordinary hourly rate for all time worked on a public holiday.

(iv) Where shifts commence between 11.00 pm and midnight on a Sunday or public holiday, the time so worked before midnight does not entitle the employee to the Sunday or public holiday rate for the shift. However, the time worked by an employee on a shift commencing before midnight on the day preceding a Sunday or public holiday and extending into the Sunday or public holiday must be regarded as time worked on the Sunday or public holiday and paid in accordance with clauses 33.2(j)(ii) and (iii).

(v) Where shifts fall partly on a holiday, the shift which has the major portion falling on the public holiday must be regarded as the holiday shift. By agreement between the employer and the majority of employees concerned, the shift which has the minor portion falling on the public holiday may be regarded as the holiday shift instead.

(vi) The rates in clause 33.2(j) are in substitution for shift penalty rates in clauses 33.2(d), 33.2(e) and 33.2(f).

• [29] It is convenient to begin with clause 33.3(j)(v) which is in two parts. The second part is a facilitative provision which, if effected, operates as an alternative to the first. Neither confers a substantive right but rather they affect the rights to the particular penalty rates for shift workers found in clauses 33.3(j)(i)-(iii). Those rights turn on performing work on a "public holiday". In substance clause 33.3(j)(v) is a deeming provision in respect of straddling shifts for the purpose of determining when work is taken to be performed on a public holiday. The first sentence has the effect of deeming the whole shift as having been worked on a public holiday if the major portion of the shift is worked on a day that is a public holiday. When read with clause 33.3(j)(iii), the first sentence of clause 33.3(j)(v) deems the whole of the shift where the major proportion falls on a public holiday to be work on a public holiday and so the penalty prescribed in clause 33.3(j)(iii) is paid for all hours of the shift including the minor portion which was worked on the day before the public holiday. The first sentence of clause 33.3(j)(v) has no operative effect on clause 33.3(j)(i) because its terms are to the same effect. It also has no effect on clause 33.3(j)(iv) because the circumstance there envisaged, insofar as it concerns work on a shift which commences before midnight on a day preceding a public holiday and extending into the public holiday, has the same result. Properly construed the reference to "a shift commencing before midnight" in the second sentence of clause 33.3(j)(iv) is a reference to the shift identified in the first sentence being one that commences "between 11.00 pm and midnight". So much is clear from the use of the words "however, the time worked by an employee on a shift" which indicates that the statement is in contrast to that which has been said previously and the reference to "a shift" conveys the contrast of the same shift starting time but on a day before rather than the day of a public holiday.

• [30] Where recourse is had to that second sentence of clause 33.3(j)(v), the public holiday is deemed to be the day on which the minor proportion of a straddling shift falls and the public penalty rates would be paid for the whole of that shift clause 33.3(j)(iii), while the penalty in clause 33.3(j)(i) would not be paid for the shift as described, but rather for the shift that is deemed to be the public holiday pursuant to the facilitative arrangement. Clause 33.3(j)(iv) would not operate because it is contrary to the facilitative arrangement made.

• [31] It should be evident from the analysis above that clause 33.3(j) operates as an interwoven scheme for determining the shifts upon which public holiday penalty rates are payable.

• [32] When read in conjunction with clause 39.6 of the Agreement it is evident that the provisions are incompatible with one another. Clause 39.6 sets out a scheme which is materially different to that found in the Award for determining when public holiday penalties are payable. Had the Agreement intended no more than to increase the penalty rates payable for public holidays and to otherwise retain the scheme for which provision is made under the Award then this could have simply been done. It is not open, as Regal Cream would contend, to take clause 33.3(j)(v) of the incorporated Award, which is designed as part of the particular scheme in clause 33.3(j) and transpose that arrangement to a different scheme found in clause 39.6 of the Agreement. Although it is not necessary, for reasons that will shortly become apparent, to decide the question of inconsistency to finality, it does appear to me that the provisions of clause 39.6 of the Agreement are inconsistent with clause 33.3(j) of the incorporated Award, which in the result would mean that the Agreement provisions are given precedence to the extent of inconsistency. And, as in my view the provisions are wholly incompatible, only the Agreement terms would determine the issue in dispute.

• [33] However, as I have indicated it is not necessary for me to go that far, because self-evidently clause 33.3(j)(v) of the incorporated Award, if it is capable of operation, has no work to do because the straddling shift arrangement with which this dispute is concerned has no major nor minor component of the shift capable of falling on a public holiday. The shift is split evenly as between the two days which it straddles.

• [34] That leaves the question posed to be determined by reference only to the express provisions of the Agreement. For the reasons given earlier the outcome is clear. Where a shift is worked under the straddling shift arrangement which begins on a public holiday at least 7.6 hours worked must be paid at the public holiday penalty rates pursuant to clause 39.6.3 of the Agreement. Where the second half of the shift worked under the straddling shift arrangement is worked on a public holiday, those hours worked on the public holiday are to be paid at the public holiday rates pursuant to clause 39.6.1.

• [35] It follows that the answer to the question must be "yes".

• [36] On a proper construction of the Agreement, a night shift worker working the straddling shift arrangement in circumstances where the shift begins on the day before a public holiday and extends into the public holiday, must be paid the penalty rates prescribed in clause 39.6.1 for the hours worked on the public holiday.

[1] WorkPac Pty Ltd v Skene [2018] FCAFC 131 at [197] and the authorities referred to therein; see also King v Melbourne Vicentre Swimming Club Inc [2020] FCA 1173 at [122]- [130] and the authorities referred to therein (The analysis of the principles of construction set out therein were not disturbed on appeal: see King v Melbourne Vicentre Swimming Club Inc [2021 FCAFC 123, 308 IR 171 at [40]- [43])

[2] Exhibit 3 - Witness Statement of Chiara O'Brian

Printed by authority of the Commonwealth Government Printer