Compass Group (Australia) Pty Ltd v Bartram

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN: COMPASS GROUP (AUSTRALIA) PTY LTD (TRADING AS ESS WORLD WIDE SERVICES)

LANDER J 16 I agree with the reasons of Jessup J and the orders which he has proposed. I certify that the preceding one (1) numbered paragraph is a true copy of the Reasons for Judgment herein of the Honourable Justices Lander.

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN: COMPASS GROUP (AUSTRALIA) PTY LTD (TRADING AS ESS WORLD WIDE SERVICES)

Jessup J 17 This is an appeal, pursuant to s 853 of the Workplace Relations Act 1996 (Cth) ('the WR Act'), from a judgment given on 19July 2006 by the Magistrates Court of Victoria (Industrial Division) in which the appellant was ordered to pay the respondent a sum on account of untaken long service leave pursuant to the Long Service Leave Act 1992 (Vic) ('the LSL Act'). Save for the matters argued in the appeal, the appellant accepted that the respondent was entitled to such a payment. The point upon which the appellant relies in this appeal, and upon which the respondent succeeded before the Magistrate, is that the provisions of the LSL Act under which the respondent's entitlement arose were inconsistent with an agreement certified under the WR Act and thus, by the combined operation of s 109 of the Constitution and s 170LZ of the WR Act, invalid. 18 As stated in the agreed facts before the Magistrate, the respondent had had continuous employment (within the meaning of the LSL Act) with the one employer from 9 October 1989 until 10 March 2006. At the latter date - when the question of his entitlement to long service leave payments under the LSL Act arose - the respondent was employed by the appellant as a casual employee. At that time, the respondent's employment was covered by an industrial agreement made under Division 2 of Part VIB of the WR Act, and certified under Division 4 of that Part, called the Compass Group Australia Pty Ltd and the Australian Workers Union Offshore Campstaff Enterprise Agreement 2003 ('the certified agreement'). The appellant was also bound by an award made under the WR Act called the Long Service Leave (Oil Drilling Rig Workers and Offshore Catering Workers') Award, 1985 ('the LSL award') although, for reasons which will appear, that award did not oblige the appellant in relation to the respondent. 19 According to the jurisprudence of the Supreme Court of Victoria, an employee engaged on a casual basis was traditionally not entitled to long service leave, since each period of employment was a separate engagement and, even where there was a degree of regularity of engagements over a substantial time, the employment would not have the element of continuity necessary to give rise to an entitlement under the LSL Act: R v Industrial Appeals Court: Ex parte Kingston (Full Court, unreported, 26 February 1976); Melbourne Cricket Club v Clohesy [2005] VSC 29. Largely, it seems, because of the judgment of that court in Clohesy, the LSL Act was amended by the introduction of s 62A, which required periods of separate engagements of casual employees to be treated as a single continuous period, in certain circumstances, for the purposes of calculating an entitlement to long service leave. It was common ground before the Magistrate that this amendment would, save for the matter of inconsistency argued by the appellant, entitle the respondent to long service leave, or to payment in lieu thereof. 20 The terms of the WR Act, as they existed on 10 March 2006, are central to the disposition of the appeal. Having been certified under Division 4 of Part VIB of the Act, the certified agreement was a "certified agreement" as defined therein. By s 170LX(1) of the WR Act, upon certification the agreement came into operation and, subject to that section, remained in operation thereafter. By s 170M(1), the appellant was bound by the agreement. If the appellant did not comply with the agreement, it was exposed to the imposition of a penalty in proceedings taken under s 178 of the WR Act. Clearly the scheme of the WR Act was that the certified agreement had to be obeyed by an employer in the position of the appellant. 21 The prospect that a party to an agreement certified under the WR Act, such as the appellant, might have obligations of a similar kind both under that Act and under a law of a State was contemplated. The WR Act dealt with that prospect - at least relevantly to the present appeal - by s 170LZ(1), which provided: Subject to this section, a certified agreement prevails over terms and conditions of employment specified in a State law, State award or State employment agreement, to the extent of any inconsistency. The effect of this provision was that a State law would, for the purpose of s 109 of the Constitution, be regarded as inconsistent with the WR Act itself where terms and conditions of employment specified in that law were inconsistent with an agreement certified under that Act. I note that, after 10 March 2006 but before the judgment of the Magistrate, s 170LZ of the WR Act was repealed. The parties conducted the case on the assumption that the section as it existed on 10 March 2006 governed the disposition of the respondent's claim - an assumption which was, I consider, clearly correct: see Acts Interpretation Act 1901 (Cth), s 8(c) and (e). 22 The question which arose in the present case was whether the new provisions of the LSL Act which had the effect of entitling an employee engaged on a casual basis to long service leave were inconsistent with the certified agreement. Where a question of that kind arises, the test of inconsistency is whether the State law, if valid, would alter, impair or detract from the operation of the certified agreement and therefore the WR Act itself: Metal Trades Industry Association of Australia v The Amalgamated Metalworkers' and Shipwrights' Union (1983) 152 CLR 632, 643 and 648. Thus it is necessary to examine the terms of the certified agreement. There are many respects in which the certified agreement evinces an intention to include casual employees within its scope, and there is one provision in particular which is critical in the present circumstances. 23 In Part 1 of the certified agreement, it is said that the agreement applies to all employees of the respondent. The agreement is to be read in conjunction with three awards made under the WR Act, including the LSL award, but, in the case of an inconsistency between the agreement and any such award, the agreement is to prevail. Many of the provisions of the certified agreement operate by reference to an "employee" as defined. That word is said to mean "any person" employed by the appellant under the agreement. 24 Under Part 2 of the certified agreement, certain permanent positions are to be filled by appointment on a merit basis "from the casual pool". It is contemplated that casual employees might, from time to time, replace permanent employees on a particular roster. There is a provision which entitles a "casual employee" to certain payments if his or her work has been cancelled after a particular time. There are redundancy payment entitlements for casual employees which differ from those available to permanent employees. The entitlements arise in the case of "a casual employee who has been rostered on a regular or continual basis for a period in excess of five years". In the selection of employees for redundancy, "short term casuals" are to be selected before "long term casuals". 25 Part 3 of the certified agreement is concerned with "wages and duties", and provides for casual employees to be paid according to the classification appropriate to their work, plus a casual loading specified as a percentage of the normal rate. It is provided that employees not be engaged as casuals for more than a continuous calendar month. A payment for travelling time undertaken by casuals each time they go off-shore is prescribed. 26 Part 8 of the certified agreement deals with the subject of leave and holidays. In the case of annual leave, the normal entitlement is confined to an employee "on weekly hire". The right to receive, on termination of employment, a payment in respect of annual leave accrued but not taken is confined to an employee "other than a casual employee". Casual employees are specifically dealt with: they receive 42 days' unpaid annual leave. The clause dealing with family and carer's leave applies only to employees other than casuals. Reimbursement for remuneration lost as a result of attendance on jury duty is available only to an employee "other than a casual employee". The provision which entitles employees to public holidays, and incidental provisions on that subject, are not applicable to casual employees. Rather, there are special provisions which govern the entitlement of casual employees to holiday pay. The clause which obliges the appellant to make superannuation contributions on behalf of its employees operates differently in the case of casual employees from the way it operates in the case of other employees. 27 Of critical importance to the present appeal is clause 45, which is to be found within Part 8 of the certified agreement. It provides: (a) Long Service Leave entitlements shall be those provided in the Long Service Leave (Oil Drilling Rig Workers and Offshore Catering Workers' Award, 1985. (b) For the purposes of this Agreement: (i) All reference to 13 weeks will mean 16 weeks and 4 days. (ii) Payment for long service leave entitlements will: (1) For a full entitlement, or, for redundancy with more than 5 years service; include the allowances set out in this Agreement, ie. Chef Supervisors Allowance, ERA Allowance, and Night Shift Allowance. (2) For dismissal, or voluntary resignation with greater than 5 years of service, the Chef Supervisor allowance set out in clause 25(a) shall be included. (c) For the purpose of Long Service Leave, continuous service will include continuous service of the employee on Bass Strait platforms with previous contractors providing service to Esso Australia Limited similar to Compass Group Australia Pty Ltd. To qualify as continuous service, the employee must have taken up employment with the subsequent contractor immediately following termination by the previous contractor. It will be seen that this clause makes no specific distinction between permanent employees and casual employees. That distinction is, however, made in the LSL award, to which subclause (a) of clause 45 refers. I shall turn to that award presently. 28 The other provision of Part 8 of the certified agreement which may be important is clause 48, which deals with the subject of parental leave. Clause 48 provides: For Parental Leave provisions refer to Australian Workers Union Offshore Campsite [Section 170MX] Award 1999. Clause 36 of the award referred to in this provision deals comprehensively with the subject of parental leave. It operates by reference an "employee", defined so as to exclude "an employee engaged upon casual or seasonal work". Thus, although casual employees are not in terms excluded by clause 48 of the certified agreement itself, they are excluded from the operation of the relevant entitling provisions of the award referred to in the clause. 29 The only other provision of the certified agreement to which I need refer is a clause within Part 9 thereof headed "leave reserved". It contains one item upon which the parties reserved leave to the appellant to continue discussions as to the possibility of certain changed arrangements. It says nothing on any subject which may be relevant to the present appeal. 30 Because of the reference to the LSL award in clause 45 of the certified agreement, it is necessary next to consider that award. It is an award which applies to a number of different employers whose names are set out in a schedule. As its name suggests, its purpose is confined to the specification of the entitlement of employees covered by it to long service leave. As with other provisions to which I have referred, the LSL award confers entitlements, and operates in other respects, by reference to an "employee" as defined. The relevant definition is as follows: … any person employed by an employer under the terms of clause 5 of this award, but does not include persons employed as casual employees. Clause 5.1 of the LSL award provides that the award "will apply to all employees", whether members of the relevant union or not, engaged upon work of the kind there described, which includes the work upon which the respondent was relevantly engaged. Clause 5.2 provides as follows: The terms and conditions set out in this award will govern all matters relating to long service leave on and from 1 January 1985, notwithstanding the provisions of any Act, statutory instrument, award, determination or agreement. The remainder of the LSL award is concerned with establishing and defining the entitlement of an "employee" to long service leave, and setting out the usual range of machinery provisions as to when the leave may be taken, whether the leave may be granted in advance, payment for the period of leave, the keeping of records and the like. 31 When clause 45 of the certified agreement is read together with the LSL award (to which it refers), the result is that employees of the appellant, other than those engaged on a casual basis, are entitled to long service leave in accordance with that award. Before the Magistrate, the appellant argued that the apparent intent of the certified agreement was that casual employees would not be entitled to long service leave, or at least (which was sufficient in the circumstances) that the appellant itself would not be under any obligation to grant long service leave, or to make a payment in lieu thereof, to casual employees. 32 By contrast, the respondent submitted, both before the Magistrate and on appeal, that the intent of the certified agreement was to deal only with the subject of long service leave for employees other than casual employees, and that the subject of long service leave for casual employees was left entirely unregulated. He relied upon the judgment of Mason, Brennan and Deane JJ in Metal Trades (152 CLR at 650): In this respect it is important to note that an award which apparently regulates an entire subject-matter may leave some small area of it untouched. This area may then become the relevant field capable of regulation by State law. An award which provides for the terms and conditions of employment and termination on notice but not dismissal for misconduct fails to deal with dismissal for misconduct and leaves that particular matter or conduct to be regulated by State law. The respondent relied also upon what their Honours said about the situation in which an industrial instrument, apparently complete on its face, is followed by a later State statute which confers new rights that had not previously been accorded generally by industrial awards or contracts of employment. Their Honours said (152 CLR at 651): It might be said that the court should not be too ready to conclude that the new statutory rights are consistent with the award because this may disturb the settlement effected by the award. Such an approach is not acceptable, however, for the reason that it disregards the fact that awards are framed to operate in the context of general law, both State and federal. The correct approach in such a case is that the award fails to deal with the matter provided for by the statute, unless the award exhibits an intention that there is to be no benefit of that kind or, alternatively, that the benefits for which it provides are to be a complete and exclusive statement of the employee's entitlement in the relevant area. Such an intention cannot be ascribed lightly to an award. It will not often transpire that the class of benefits provided by the statute was demanded by the log of claims or otherwise made part of the industrial dispute settled by the award. As examples of the kind of situation to which their Honours were referring, they mentioned cases in which it had been decided that there was no conflict between an award which did not provide for long service leave and a state statute which did so provide: TA Robinson & Sons Pty Ltd v Haylor (1957) 97 CLR 177 and Collins v Charles Marshall Pty Ltd (1955) 92 CLR 529. 33 The respondent's argument was successful in the Magistrates Court. The Magistrate held that the subject of long service leave for casuals had been left wholly unregulated by the certified agreement, and that the terms of that agreement could not sustain the proposition either that casuals were not to have long service leave or that the long service leave entitlements for which the agreement did provide were to be exhaustive. The appellant submits that the Magistrate was in error in these respects. 34 As the brief survey of the provisions of the certified agreement set out above reveals, the agreement covers casual employees as well as permanent employees. In many respects, however, casual employees are excluded from the operation of provisions which would otherwise be entitling. Both by provisions which deal with the entitlements of casual employees in a positive way, and by those exclusions, the agreement evinces a clear intention to deal with the entitlements of casual employees, one way or the other, in every respect. The provisions of Part 8 of the agreement are particularly significant in this regard. There is no provision of Part 8 which does not, either directly or indirectly, deal with the question whether casual employees should have the benefit of a particular entitlement. In the case of parental leave, there is no direct reference to casual employees in the certified agreement itself, but the subject is dealt with (by exclusion) in the award under which, according to clause 48 of the certified agreement, all parental leave entitlements arise. 35 Likewise in the case of long service leave, the same result is achieved by the operation of clause 45 of the certified agreement. That clause makes provision for the entitlements of employees generally to long service leave, but does so indirectly by picking up the provisions of the LSL award. When one turns to that award, one finds that casual employees are in contemplation, but are excluded from the entitlements for which the award provides. By the interaction of clause 45 and the LSL award, conscious attention has been given to the question whether casual employees should be entitled to long service, and the question has been answered in the negative. 36 This is not, I consider, a case of the kind to which Mason, Brennan and Deane JJ referred in Metal Trades. Their Honours were concerned with a situation in which the stability of an earlier federal industrial settlement was arguably disturbed by the employer being obliged to comply with a State law introducing new rights that had not previously been accorded generally by industrial awards or contracts of employment. That would not be a fair description of the situation presented by this appeal. The matter of long service leave was comprehensively dealt with by the certified agreement. That casual employees might be, or become, entitled to long service leave was in the contemplation of the maker of the LSL award, and likewise, by reason of the terms of clause 45 of the certified agreement, in the contemplation of the makers of that agreement. The matter was dealt with by exclusion. To contend, as the respondent did, that "long service leave for casuals" was a new industrial entitlement not previously the subject of the relevant federal instruments is to beg the question. Entitlements of that nature were not the subject of the certified agreement for the very reason that they had been considered and rejected. 37 Although it may be considered, in a sense, as involving a question of characterisation on which minds may differ, I do not consider that "long service leave for casuals" should be regarded as an area which the certified agreement deliberately left unregulated or, in the jargon of s 109, that this was a corner of the relevant field that was not occupied by federal law. I read the certified agreement as evincing an intention to cover the whole field of long service leave, and as doing so in part by consciously refraining from setting up any entitlement in the case of casual employees. It is not necessary to go to the length of concluding that the agreement should be read as containing an implicit prohibition upon such employees being granted such leave. It is sufficient to find, as I do, that the agreement was intended to contain a complete statement of the appellant's obligations on the matter of long service leave - for casuals no less than for permanent employees. 38 It follows that the provisions of the LSL Act upon which the respondent sued in the Magistrates Court were, at times relevant to the disposition of the matter before the Magistrate, inconsistent with the certified agreement and invalid to the extent that they would otherwise have applied to the circumstances of the respondent, considered as an employee engaged on a casual basis. The appeal should be allowed, the orders made below should be set aside, and it should be ordered that the respondent's complaint in the Magistrates Court be dismissed. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jessup.

Associate: Dated: 8 March 2007 Counsel for the Appellant: Mr T Ginnane SC with Mr J Forbes

Solicitors for the Respondent: Maurice Blackburn Cashman