Alleged dispute in relation to the acrrual rate of Annual Leave [cl. 15 -Agreement] & [Division 6 -NES].

[1] The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) has made an application for Fair Work Australia to deal with a dispute in accordance with the dispute settlement procedure of the BCS Infrastructure Support P/L, Melbourne Airport Enterprise Agreement (the Agreement). The dispute concerns the proper entitlement of employees who are shift workers to annual leave.

[2] The application was heard by the Tribunal on 1 September 2011. Evidence in the matter was given by Mr Taveira, Mr Glover and Mr Cachia for the CEPU and by Mr Manester for BCS Infrastructure Support Pty Ltd (BCS). Detailed written and oral submissions were made by both parties.

[3] I have considered all of the material before me in reaching this decision.

[4] The Agreement provides that employees will work a roster comprising 4 shifts each of 12 hours followed by 4 days off. Each 4 day block of shifts comprises 2 early shifts (starting at 6.00am) and 2 night shifts (starting at 6.00pm). The roster cycle is 8 weeks and in the 8 week roster cycle an employee will work 28 days each of 12 hours and have the other 28 days off work. The total hours worked in the 8 week roster cycle is 336 hours (28 X 12 = 336) which averages out at 42 hours per week for each of the 8 weeks. The average hours of work of 42 hour per week is specifically provided for in the Agreement.

[5] In recognition of both the notional working week being 42 hours and the NES entitlement of shift workers who regularly work Saturdays and Sundays to have an entitlement to 5 weeks annual leave, the Agreement provides for an annual leave entitlement of 210 hours (5 x 42 = 210).

[6] The dispute arises because where an employee requests 5 weeks annual leave commencing at the start of a shift cycle then the period of 5 weeks (35 calendar days) includes 19 shifts of 12 hours, which amounts to 228 hours. Whilst BCS will grant the period of leave applied for, BCS deducts 228 hours from the employees annual leave balance. The employees and the CEPU claim that where an employee takes 5 weeks annual leave then no more than 210 hours can be deducted from the employees annual leave account even if the employee is absent from work for 19 shifts. The position of BCS is simply that the Agreement is explicit in providing an annual leave entitlement of 210 hours per annum and that this equates to 5 weeks where each week is 42 hours. BCS does not object to an employee taking more leave so long as the amount of actual leave (days not attending shifts) is accounted for.

[7] The essence of this dispute is that the language of the Agreement is not internally consistent nor does the language of the Agreement sit easily with the language of the NES.

[8] The entitlement to Annual Leave is provided for in s.87 of the Fair Work Act in the following terms:

(1) For each year of service with his or her employer, an employee is entitled to:

(i) a modern award applies to the employee and defines or describes the employee as a shiftworker for the purposes of the National Employment Standards; or

(ii) an enterprise agreement applies to the employee and defines or describes the employee as a shiftworker for the purposes of the National Employment Standards; or

(iii) the employee qualifies for the shiftworker annual leave entitlement under subsection (3) (this relates to award/agreement free employees).

Note: Section 196 affects whether FWA may approve an enterprise agreement covering an employee, if the employee is covered by a modern award that is in operation and defines or describes the employee as a shiftworker for the purposes of the National Employment Standards.

(2) An employee's entitlement to paid annual leave accrues progressively during a year of service according to the employee's ordinary hours of work, and accumulates from year to year.

Note: If an employee's employment ends during what would otherwise have been a year of service, the employee accrues paid annual leave up to when the employment ends.

Award/agreement free employees who qualify for the shiftworker entitlement

(3) An award/agreement free employee qualifies for the shiftworker annual leave entitlement if:

(i) is employed in an enterprise in which shifts are continuously rostered 24 hours a day for 7 days a week; and

(ii) is regularly rostered to work those shifts; and

(iii) regularly works on Sundays and public holidays; or

(b) the employee is in a class of employees prescribed by the regulations as shiftworkers for the purposes of the National Employment Standards.'

[9] In the present matter there is no doubt that the employees meet the requirements of s.87(3) and are therefore entitled to 5 weeks of annual leave.

[10] The relevant terms of the Agreement are as follows:

'Normal hours' of work are deemed hours worked during the normal rostered period.

v) A 'working day' is defined as any full duty shift. Even where employment continues after midnight in which case the total time worked will be deemed to have been completed in one day.

vi) A 'normal working' week is defined as Thursday through to Wednesday.

vii) 'Hours worked' is the time spent whilst employed by the employer and does not include travel time.

The number of hours to be worked each week and the times those hours are to be worked may be varied from time to time as operational requirements or the customer demands.

v) Except where part time or casual employment is offered, it is intended that there be an average over the roster cycle of forty two (42) hours per week.

vi) Hours worked in excess of the hours specified in Clause 13)b)v) constitute reasonable additional hours.

vii) Any variations shall be by agreement of both parties.

v) As at the commencement of this Agreement and subject to sub-clause h) below, Rostered Shift Hours are:

vi) Shifts are arranged in rotation between Early and Night shifts - refer Appendix A for typical shift roster

a) Employees shall be entitled to 210 hrs annual leave after each year of completed service.

b) Annual Leave must be used so as to not carry any more than 420 hrs at any one time.

c) Rostering of annual leave will be done via consultation and agreement with the majority of employees to ensure employees are treated equally and fairly.

d) Employees are required to provide reasonable notice of the intention to take Annual Leave and are subject to work requirements and, in particular the availability of relief staff to cover the absence. Unless exceptional circumstances dictate, the period of reasonable notice shall be two (2) weeks prior to taking of annual leave.

e) All leave that will fall between the 1st of December and the 31st of January must be submitted for approval by no later than the 31st of October so that the allocation of leave can be done fairly.

f) Should an employee be requested to return to work by the employer the employee shall be paid in accordance with clause 4) of this agreement with a minimum of eight hours of ordinary rates if brought in prior to the midpoint of the shift or four hours of ordinary rate if bought in after the midpoint of the shift and that day will then not be classified as an annual leave day.

g) The employees shall only be allowed to take a maximum of 10 single day annual leave absences in a 12 month period.'

[11] Before proceeding further a number of observations need to be made in relation to the two above clauses of the Agreement.

● The paragraph numbering within the subclauses of clause 13 all start at small Roman 5 and not at small Roman 1

● The averaging of hours of work over an 8 week roster cycle is permitted by s.63(1) of the Act.

● The average of 42 hours per week is permitted by s.63(2) of the Act.

● The provisions of clause 15(b) to (g) inclusive are permitted by s.93(3) and (4) of the Act.

[12] Also an observation must be made in relation to s.87(1) of the Act.

● The word 'weeks' as used in both s.87(1)(a) and (b) should be given its ordinary meaning. The Macquarie Dictionary defines 'week' as:

'A period of seven successive days, commonly understood as beginning (unless otherwise specified or implied) with Sunday, followed by Monday, Tuesday, Wednesday, Thursday, Friday, and Saturday.'

● In the context of the Fair Work Act it may be implied that a 'week' is any period of seven successive days.

[13] There is an obvious difference in the manner in which the quantum of annual leave entitlement is expressed in the Agreement and in the NES.

[14] The NES provides for 5 weeks of annual leave whereas the Agreement provides for 210 hours of annual leave.

[15] The resolution of this difference is to be found in the Fair Work Act.

[16] Section 55 and 56 relevantly provide as follows:

'55 Interaction between the National Employment Standards and a modern award or enterprise agreement

National Employment Standards must not be excluded

(1) A modern award or enterprise agreement must not exclude the National Employment Standards or any provision of the National Employment Standards.

Terms expressly permitted by Part 2-2 or regulations may be included

(2) A modern award or enterprise agreement may include any terms that the award or agreement is expressly permitted to include:

(a) by a provision of Part 2-2 (which deals with the National Employment Standards); or

(b) by regulations made for the purposes of section 127.

Note: In determining what is permitted to be included in a modern award or enterprise agreement by a provision referred to in paragraph (a), any regulations made for the purpose of section 127 that expressly prohibit certain terms must be taken into account.

(3) The National Employment Standards have effect subject to terms included in a modern award or enterprise agreement as referred to in subsection (2).

Note: See also the note to section 63 (which deals with the effect of averaging arrangements).

Ancillary and supplementary terms may be included

(4) A modern award or enterprise agreement may also include the following kinds of terms:

(a) terms that are ancillary or incidental to the operation of an entitlement of an employee under the National Employment Standards;

(b) terms that supplement the National Employment Standards;

but only to the extent that the effect of those terms is not detrimental to an employee in any respect, when compared to the National Employment Standards.

Note 1: Ancillary or incidental terms permitted by paragraph (a) include (for example) terms:

(a) under which, instead of taking paid annual leave at the rate of pay required by section 90, an employee may take twice as much leave at half that rate of pay; or

(b) that specify when payment under section 90 for paid annual leave must be made.

Note 2: Supplementary terms permitted by paragraph (b) include (for example) terms:

(a) that increase the amount of paid annual leave to which an employee is entitled beyond the number of weeks that applies under section 87; or

(b) that provide for an employee to be paid for taking a period of paid annual leave or paid/personal carer's leave at a rate of pay that is higher than the employee's base rate of pay (which is the rate required by sections 90 and 99).

Note 3: Terms that would not be permitted by paragraph (a) or (b) include (for example) terms requiring an employee to give more notice of the taking of unpaid parental leave than is required by section 74.

56 Terms of a modern award or enterprise agreement contravening section 55 have no effect

A term of a modern award or enterprise agreement has no effect to the extent that it contravenes section 55.'

[17] Whilst it is clear that an enterprise agreement can contain clauses dealing with NES matters such clauses must fall within what is permitted by s.55 of the Act.

[18] There is nothing in Division 6 of Part 2-2 of the Act which specifically permits an enterprise agreement to redefine the entitlement to annual leave from "weeks" to hours. Although s.55(4) permits enterprise agreements to include terms which are ancillary or incidental to the operation of the Agreement this is only permissible to the extent that the terms do not operate to the detriment of an employee in relation to an NES entitlement.

[19] Clause 15(a) of the Agreement is, not only, not specifically permitted by the NES, but in addition, it operates to the detriment of employees in relation to their NES entitlement to 5 weeks annual leave.

[20] Section 56 of the Act operates to render clause 15(a) ineffective in setting the quantum of annual leave as a number of hours where the NES provides for annual leave as a number of weeks.

[21] However, merely because clause 15(a) of the Agreement cannot operate to set the quantum of annual leave as a number of hours where the NES sets the quantum as a number of weeks, this does not mean that employees are entitled as of right to construct their annual leave applications so as to have 5 weeks of annual leave which includes 19 shifts each of 12 hours thus giving the employee an effective 228 hours off work and on pay.

[22] The very simple roster system used in the Agreement means that the number of shifts within any five week period will differ depending on which day in the roster cycle is used to commence the five week period of annual leave.

[23] The CEPU and the employees have sought to have the 5 week period of annual leave commence on the first day of a 4 day period of shifts as this maximises the number of shifts within the 5 week period at 19 or a total of 228 hours of work.

[24] This is not the only possible scenario. The four other possible scenarios are:

If the 5 week period of annual leave was to commence on the second day of a 4 day period on shift then the number of shifts in the 5 week annual leave period is also 19 or a total of 228 hours of work.

If the 5 week period of annual leave was to commence on either the fourth day of a 4 day period off shift or on the third day on shift then the number of shifts in the 5 week annual leave period is only 18 or a total of 216 hours of work.

If the 5 week period of annual leave was to commence on either the third day of a 4 day period off shift or on the fourth day on shift then the number of shifts in the 5 week annual leave period is only 17 or a total of 204 hours of work.

If the 5 week period of annual leave was to commence on either the first or second day of a 4 day period off shift then the number of shifts in the 5 week annual leave period is only 16 or a total of 192 hours of work.

[25] In each of the possible scenarios the employee would be paid for the 'employee's ordinary hours of work in the period' of annual leave.(s.90(1) of the Act)

[26] The Agreement makes very clear that the taking of annual leave is not at the sole discretion of the employee.

[27] Properly applied, clause 15 c) provides a real means of fairly regulating the taking of annual leave in a manner which does not prevent an employee from having a period of 5 weeks of annual leave, but which would ensure that over time employees averaged 210 hours for their 5 week periods of annual leave. Having said this it is always within the discretion of BCS to grant applications for 5 weeks annual leave to each and every employee on the basis that the period of annual leave will commence on the first or second day of a 4 day period of shifts thus providing employees with a period of 5 weeks annual leave which covers 19 shifts.

[28] Where, as in the present matter, the evidence is that BCS has approved a period of 5 weeks of annual leave for Mr Robin Taviera which commenced on the first day of a 4 day period of shifts then BCS would be in the position of having to pay Mr Taviera for the 19 shifts that fell within that period of annual leave. Such an outcome is required by s.90(1) of the Act.

K Reidy for the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia

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