s.739 - Dispute resolution

(C2025/4642; C2025/5251; C2025/5256; C2025/5302; C2025/5660; C2025/6109; C2025/6146 & C2025/6520)

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

• [1] The Applicants (Casey Dorrel, Candelaria De Las Carreras, Matthew Sutherland, Lachlan Walton, Laura Montero, Ashley Smith, Aaron Davis, and Joel Suffling) applied to the Fair Work Commission (the Commission) under section 739 of the Fair Work Act 2009 (Cth) (the Act) in relation to a dispute arising under an enterprise agreement. The Respondent to the dispute is Downer Edi Engineering Electrical Pty Ltd.

• [2] The application has been filed pursuant to the dispute resolution clause contained within the Downer EDI Engineering Electrical Pty Ltd Industrial Services Agreement 2022 (the Agreement).[1]

• [3] The Applicants dispute the calculation of overtime rates for casual employees engaged under the Agreement. The Applicants submit that the correct approach for calculating overtime payments is a compounding approach, whilst the Respondent submit the correct approach is a cumulative approach.

'Time and one half' = 1.5 x (base hourly wage rates + casual loading)

'Double time' = 2.0 x (base hourly wage rates + casual loading)

'Time and one half' = 1.5 x base hourly wage rates + casual loading

'Double time' = 2.0 x base hourly wage rates + casual loading

• [4] The parties attended two conciliation conferences before the Commission; however, the matter was not resolved, and the Applicants requested the matter be determined by arbitration.

• [5] The Applicants filed submissions on 15 August 2025, and the Respondent filed submissions on 5 September 2025. A Hearing of the matter was held on 16 September 2025. Neither party sought to be represented by an external lawyer or paid agent.

• [6] The parties agreed on the below question to be arbitrated:

"What is the correct calculation of overtime rates of pay for casual employees employed under the Agreement?"

• [7] In accordance with the dispute clause in the Agreement, the Applicants have brought this dispute to the Commission noting section 738 of the Act which allows for an application, under Part 6-2, Division 2 of the Act, to be made in such circumstances:

(b) an enterprise agreement includes a term that provides a procedure for dealing with disputes, including a term referred to in subsection 186(6); ..."

• [8] The application has been brought under section 739 of the Act, which allows for the Commission to assist the parties to resolve a dispute:

(1) This section applies if a term referred to in section 738 requires or allows the FWC to deal with a dispute.

(2) The FWC must not deal with a dispute to the extent that the dispute is about whether an employer had reasonable business grounds under subsection 65(5) or 76(4), unless:

(a) the parties have agreed in a contract of employment, enterprise agreement or other written agreement to the FWC dealing with the matter; or

(b) a determination under the Public Service Act 1999 authorises the FWC to deal with the matter.

Note: This does not prevent the FWC from dealing with a dispute relating to a term of an enterprise agreement that has the same (or substantially the same) effect as subsection 65(5) or 76(4) (see also subsection 55(5)).

(3) In dealing with a dispute, the FWC must not exercise any powers limited by the term.

(4) If, in accordance with the term, the parties have agreed that the FWC may arbitrate (however described) the dispute, the FWC may do so.

Note: The FWC may also deal with a dispute by mediation or conciliation, or by making a recommendation or expressing an opinion (see subsection 595(2)).

(5) Despite subsection (4), the FWC must not make a decision that is inconsistent with this Act, or a fair work instrument that applies to the parties.

(6) The FWC may deal with a dispute only on application by a party to the dispute."

• [9] Clause 24 of the Agreement allows for the matter to be dealt with by way of arbitration before the Commission.

• [10] The Applicants submit that the casual loading should be included in the calculation of the overtime rate of payment.

• [11] The Applicants submit that clause 8.1(c) of the Agreement states "casual employees shall receive a flat loading of 25% in addition to their base hourly rate of pay, for each hour worked...".

• [12] The Applicants submit that the Agreement does not contain wording that casual loading stops or is not applied to overtime hours. Nor does the Agreement provide for wording that specifically excludes casual loading from the overtime rate of payment.

• [13] The Applicants assert that, during the recruitment process with the Respondent, they were provided with information from members of the Respondent's recruitment team that the overtime rate of pay would include the casual loading of 25%. The Applicants submit that this assurance or representation from the Respondent's recruitment team was a key factor when deciding to accept a position with the Respondent.

• [14] The Respondent submits that the parties have a different methodology in calculating the overtime rate of payment, with the Applicants supporting a compounding approach as the correct method, whilst the Respondent submits that the correct method is a cumulative approach.

• [15] The Respondent refers to clauses 8.1(c) and 9.3 of the Agreement as the primary clauses in dispute between the parties. Those clauses read as follows:

1. Casual employees will receive a flat loading of 25% in addition to their base hourly rate of pay, for each hour worked, in lieu of any paid leave outlined in clause 19 (unless provided for under the NES) and redundancy entitlements in clause 17."

a) Subject to the provisions of this clause, all work performed outside of the ordinary hours of any day, Monday to Friday, inclusive, shall be paid for at the rate of time and one half for the first two (2) hours and double time thereafter. For the purposes of this clause, ordinary hours shall mean the hours of work fixed by the Employer in accordance with clause 9.1.

b) Work performed on Saturdays prior to 12.00 noon shall be paid for at the rate of time and one half for the first two (2) hours and double time thereafter.

c) Work performed on Saturdays after 12.00 noon or on Sundays shall be paid for at the rate of double time.

d) An employee required to work overtime on a Saturday, Sunday, rostered day off or public holiday shall be paid a minimum of four (4) hours at the appropriate penalty rate.

e) Work done on any day prescribed as a public holiday (or in substitute of) under this Agreement, will be paid at the rate of double time and one half.

f) In computing overtime each day shall standalone but when an employee works overtime which continues beyond midnight on any day, the time worked after midnight shall be deemed to be part of the previous day's work for the purpose of this clause.

g) The provisions of this clause do not operate so as to require payment of more than double time rates, or double time and a half on a public holiday prescribed under this Agreement for any work.

h) This clause does not apply to shift work.

1. No party to this Agreement will, either directly or indirectly, impose any form of ban, limitation or restriction on working reasonable overtime."

• [16] The Respondent submits that clauses 4 and 14.2 of the Agreement need to be factored in when determining base hourly rate of pay. Those clauses read as follows:

1. "Ordinary rate" means the wages paid to an employee for working ordinary hours, in accordance with Annexure One of this Agreement. Unless otherwise prescribed in this Agreement, the ordinary rate of pay is inclusive of any all-purpose allowances."

a) During the term of this Agreement, the Ordinary Rate of Pay outlined in Schedule 1 will be increased in the first full pay period on or after the;

1. 31 July 2023 by 1.5% or CPI whichever is greater;
2. 31 July 2024 by 1.5% or CPI whichever is greater, and;
3. 31 July 2025 by 1.5% or CPI whichever is greater."

• [17] For the sake of brevity, I am not going to repeat the Respondent's submissions in full. But, in summary, the Respondent submits that, consistent with the Commission's approach in AMWU v Berri Pty Limited (Berri),[2] the ordinary meaning of the words each and flat in clause 8.1(c) of the Agreement support the Respondent's assertion that the correct approach in determining overtime for casuals is the cumulative approach rather than the compounding approach.

• [18] The relevant principles of interpretation can be drawn from Berri.

• [19] I adopt the Berri principles. Consequently, it is necessary to:

• begin the analysis with a consideration of the ordinary meaning of the words of the relevant clauses in the Agreement;

• determine whether the Agreement has a plain meaning;

• not rewrite the Agreement to achieve what might be regarded as a fair or just outcome;

• (in determining the objective intention of the parties) do so by reference to what a reasonable person would understand by the language used in the Agreement;

• not adopt an overly technical approach to the interpretation of the Agreement; and

• not contradict the plain language of the Agreement.

• [20] Having considered the submissions of the parties in relation to the question of arbitration, being "what is the correct calculation of overtime rates of pay for casual employees employed under the Agreement?", I have determined that the correct method of calculating overtime payments for casual employees is the cumulative approach adopted by the Respondent. My reasons are as follows.

• [21] The correct construction of clause 8.1(c) of the Agreement needs to consider the ordinary meaning of the clause and the words contained within. The Respondent is correct in that the ordinary meaning of "each" and "flat" are important matters for consideration when determining if the correct approach for overtime payments for casual employees is a cumulative approach rather than the compounding approach preferred by the Applicants.

• [22] Clause 8.1(c) of the Agreement relevantly states that "casual employees will receive a flat loading of 25% in addition to their base hourly rate of pay, for each hour worked".

• [23] Having considered the principles in Berri and the plain ordinary language of clause 8.1(c) of the Agreement I make the following findings:

• "flat" refers to a fixed/flat rate loading paid on the base hourly rate of pay. The flat rate does not change regardless of whether the employee is being paid for ordinary hours or overtime hours.

• "each" means for every hour worked by an employee regardless of whether the work being performed is ordinary hours or overtime hours.

• Casual employees will be paid a flat casual loading of 25% for each hour worked regardless of whether it is ordinary time or overtime, the loading does not change as it is based on the base hourly rate of pay not the rate of pay being paid for that hour worked.

• [24] Consistent with the principles of Berri, the treatment of other flat allowances in the Agreement must also be considered.

• [25] As the Respondent highlighted in their submissions, the dual trade allowance (clause 15.4) and site allowance (clause 15.5) are flat allowances paid at the rate of $2.00 and $3.00 respectively. These allowances are paid at a flat rate regardless of whether an employee is working ordinary hours or overtime hours.

• [26] It would be nonsensical for the interpretation or application of the word flat to differ between the calculation for casual loading and for the calculation of the dual trade allowance and site allowance.

• [27] The Agreement contains an exception to this application, which is clearly outlined in clause 9.6(d), in relation to a shift allowance. The wording in clause 9.6(d) is clear that the shift allowance is only applicable for ordinary hours worked. There is no wording in clause 8.1(c) that provides such a specific exclusion or similar as outlined in clause 9.6(d). The Agreement is clear that a shift allowance of 20% is paid on ordinary hours worked, and not on any overtime payments.

• [28] From a review of the wording of the Agreement, there is no suggestion that it was intention of the parties who negotiated the Agreement for casual employees to be paid a variable casual loading which is adjusted when an employee works overtime hours as opposed to ordinary hours, rather, as I have determined, the wording of the Agreement is clear that the casual loading is a flat loading that does not change for overtime hours.

• [29] For the Applicants' approach to be accepted (compounding approach), it would require the Agreement interpretation to be adjusted outside of the ordinary meaning of the words used in clause 8.1(c), this approach is not consistent with the approach taken in Berri.

• [30] I understand and accept that the Applicants are aggrieve and upset given the concerns raised about assurances provided by representatives of the Respondent during the recruitment process. However, the Agreement wording and interpretation when considering the established principles does not support the Applicants' position regarding the compounding approach.

• [31] Accordingly, in response to the question:

What is the correct calculation of overtime rates of pay for casual employees employed under the Agreement?

The correct calculation for overtime rates of pay for casual employees employed under the Agreement is the cumulative approach as submitted by the Respondent.

[2] [2017] FWCFB 3005.

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