Construction, Forestry, Maritime, Mining and Energy Union v Tahmoor Coal Pty Ltd

The Notice of Appeal 7 The Notice of Appeal provides the following four Grounds of Appeal: 1. His Honour erred in determining that clause 20.2 of the Tahmoor Colliery Site Enterprise Agreement 2010 (the enterprise agreement) only required the payment therein when a public holiday fell on a weekday. 2. His Honour erred in determining that clause 35.3 of the enterprise agreement operated to displace the entitlement under clause 21.1.2 to payment of night shift loading. 3. His Honour erred in concluding that no contravention of clause 20.2 of the enterprise agreement was made out by the respondent's failure to pay mine production bonus to the second, third and fourth appellants in the circumstances before him. 4. His Honour erred in concluding that no contravention of clause 21.1.2 of the enterprise agreement was made out by the respondent's failure to pay shift loading to the third and fourth appellants in the circumstances before him. 8 Grounds 1 and 3, it will be noticed, are directed to the correct construction and application of cl 20.2 of the 2010 Agreement; Grounds 2 and 4 are directed to the correct construction and application of cl 21.1.2 (and cl 35.3) of the 2010 Agreement. 9 None of these Grounds of Appeal have been made out.

Principles of interpretation 10 The general approach to the manner in which industrial instruments, such as the present Enterprise Agreement, are to be construed is well-settled. 11 An oft-repeated formulation of that general approach is that provided as follows by Madgwick J in Kucks v CSR Ltd (1996) 66 IR 182 at 184: Legal principles It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand. But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning. See also: Transport Workers' Union of Australia v Linfox Australia Pty Ltd [2014] FCA 829 at [30], (2014) 318 ALR 54 at 58 per Tracey J; Australian Workers' Union v Cleanevent Australia Pty Ltd [2015] FCA 1477 at [13] per Flick J. 12 It is also well-settled that the words of an award are not to be construed "in a vacuum divorced from industrial realities": City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union [2006] FCA 813 at [57], (2006) 153 IR 426 at 440. French J (as his Honour then was) observed in that case, in part, as follows (at 438 to 439): [53] The construction of an award, like that of a statute, begins with a consideration of the ordinary meaning of its words. As with the task of statutory construction regard must be paid to the context and purpose of the provision or expression being construed. Context may appear from the text of the instrument taken as a whole, its arrangement and the place in it of the provision under construction. It is not confined to the words of the relevant Act or instrument surrounding the expression to be construed. It may extend to '… the entire document of which it is a part or to other documents with which there is an association'. It may also include '… ideas that gave rise to an expression in a document from which it has been taken'… His Honour continued on to observe (at 440): [57] It is of course necessary, in the construction of an award, to remember, as a contextual consideration, that it is an award under consideration. Its words must not be interpreted in a vacuum divorced from industrial realities - City of Wanneroo v Holmes (1989) 30 IR 362 at 378-379 and cases there cited. There is a long tradition of generous construction over a strictly literal approach where industrial awards are concerned - see eg Geo A Bond and Co Ltd (in liq) v McKenzie [1929] AR 499 at 503-504 (Street J). It may be that this means no more than that courts and tribunals will not make too much of infelicitous expression in the drafting of an award nor be astute 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 of Wanneroo v Holmes (at 380): Awards, whether made by consent or otherwise, should make sense according to the basic conventions of the English language. They bind the parties on pain of pecuniary penalties. 13 Drawing upon these and other authorities, a more recent summary of the principles of construction to be applied to the interpretation of industrial awards and enterprise agreements is the following provided by Rangiah J in Swissport Australia Pty Ltd v Australian Municipal Administrative Clerical and Services Union (No 3) [2019] FCA 37, (2019) 284 IR 97 at 107 to 108: The principles of construction of awards [52] The principles of construction of awards are well-settled and include the following: (1) The canons of construction found in the Acts Interpretation Act 1901 (Cth) apply to awards of the Commission: City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426 at [52]; Construction Forestry Mining and Energy Union (Construction and General Division) v Master Builders' Group Training Scheme Inc (2007) 161 IR 86 at [33]; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Excelior Pty Ltd [2013] FCA 638 at [29]; Sydney Night Patrol & Inquiry Co Pty Ltd v Pulleine [2014] FCA 385 at [26]. (2) The task of construction begins with the natural and ordinary meaning of the words used: City of Wanneroo at [53]; Kucks v CSR Limited (1996) 66 IR 182 at 184; Australian Workers' Union v Cleanevent Australia Pty Ltd [2015] FCA 1477 at [13]. (3) An award is to be interpreted in light of its industrial context and purpose: City of Wanneroo at [53]; Zader v Truck Moves Australia Pty Ltd [2016] FCAFC 83 at [27]; Prestige Property Services Pty Ltd v Liquor, Hospitality and Miscellaneous Union (2007) 161 FCR 95; 166 IR 165 at [56] and [109]; Soliman v University of Technology, Sydney (2008) 176 IR 183 at [82] (4) An award is also to be interpreted in light of the commercial and legislative context in which it applies: Amcor Ltd v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241; 138 IR 286 at [2] and [13]; Construction, Forestry, Mining and Energy Union v John Holland Pty Ltd (2010) 186 FCR 88; 204 IR 309 at [90]; Shop, Distributive and Allied Employees' Association v Woolworths SA Pty Ltd [2011] FCAFC 67 at [14]-[18]; Zader at [27]. (5) An award "must not be interpreted in a vacuum divorced from industrial realities": City of Wanneroo at [57]; Australian Workers' Union v Cleanevent Australia Pty Ltd at [14]. (6) The relevant "context" to be considered in interpreting an award extends to the origins of a particular clause. However, most often the immediate context, being the clause, section or part of the award in which the words to be interpreted appear, will be the clearest guide: Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at 517-19; 46 IR 128 at 133-136. (7) The Court should not make too much of infelicitous expression in the drafting of an award. Ultimately, as awards bind the parties on pain of pecuniary penalties, they should make sense according to the basic conventions of the English language: City of Wanneroo at [57]. Narrow or pedantic approaches to the construction task are misplaced, but a court is not free to give effect to some anteriorly derived notion of what is fair or just regardless of what has been written in the award: Kucks at 184; Excelior Pty Ltd at [30]. (8) While context and purpose of an award will be relevant, ultimately the Court's task is to give effect to the meaning of the award as expressed in its words, objectively construed: Amcor Ltd at [70], [77]-[114].

The 2010 Agreement 14 Although the correct construction and application of particular clauses of an enterprise agreement is a process which cannot be divorced from the agreement as a whole and the context in which those clauses appear, the two provisions of the 2010 Agreement of immediate relevance to the resolution of the present case are cll 20 and 21.1.2. 15 Clause 20 provides as follows (without alteration): 20 Mine Production Bonus 20.1 The Mine Production Bonus scheme shall consist of a Development Bonus and a Run Of Mine (ROM) Bonus and will only apply to metres and tonnes produced by Tahmoor employees. The Mine Production Bonus will be calculated and paid on a weekly basis. 20.2 The mine production bonus will be paid on all forms of approved paid leave and for the first 39 weeks of accident pay. Eligible employees will be paid average bonus on public holidays. 20.3 The Mine Production Bonus is designed on a nominal 5 days per week production cycle. It is recognised that from time to time normal business activities may vary this balance. Mine Production Bonus is paid on a per employee basis. 20.4 Where there is a major change to the projected mine operations the Company will review the mine bonus scheme. 20.5 Development bonus The development bonus shall be paid at the following rate: • $1.10 per linear metre of advance up to 130m; • For greater than 130m, $1 .20 per linear metre of advance for all metres including the initial 130m. • Where the forecast quarterly metres are achieved, all metres in excess of the forecast metres will be paid at the rate of $1 .50 per linear metre Development bonus will not apply to floor brushing, roof brushing or roadway widening except for the longwall install roadway which will be calculated as per above. 20.6 Run of mine bonus ROM Bonus will be paid at the rate of $0.004 per ROM tonne 20.7 Longwall escalated bonus If the longwall relocation is completed in less than forecast duration then bonus for all tonnes produced from the commencement of the longwall until the end of the forecast duration will be calculated at the rate of $0.01 per ROM tonne. 16 Clause 21 provides, in relevant part, as follows (without alteration): 21. Allowances 21.1 Shift Loading 21.1.1 Afternoon Shift: Employees working a roster where the ordinary hour component of that shift ends after 6:00pm and before 1.00am are entitled to an additional 15% loading on their paid ordinary hours for each shift of attendance. 21.1.2 Night Shift: Employees working a roster where the ordinary hour component of that shift ends after 1.00am and before 9:00am are entitled to an additional 25% loading on their paid ordinary hours for each shift of attendance. 17 In addition to these two clauses - and a provision of immediate relevance to the construction of cl 21.1.2 - is cl 35.3. That clause is specifically directed to public holidays and provides, in relevant part, as follows (without alteration): 35. Public Holidays 35.1 The recognised public holidays are those gazetted from time to time by the NSW Government or any day observed by the people of NSW in lieu of one of the above days. The miner's picnic day public holiday is currently observed on Easter Tuesday. … 35.3 Employees are paid at a rate of triple time for all time worked on recognised public holidays. (Triple time is made up of classification rate plus double time for the ordinary rostered hours and triple time for all other hours worked.) …

The mine production bonus - Grounds 1 & 3 18 In the period between April 2014 and April 2017 the Second, Third and Fourth Appellants were not paid an "average bonus" (as referred to in cl 20.2 of the 2010 Agreement) with respect to a number of public holidays when those days fell on the weekend. 19 No question arose before the Federal Circuit Court, nor before this Court, as to the quantification of payments to be made in the event that those Appellants were entitled to receive that payment. 20 The Federal Circuit Court Judge concluded that those now-Appellants were not entitled to receive payment pursuant to cl 20.2 of the 2010 Agreement and, accordingly, that there had been no contravention of s 50 of the Fair Work Act 2009 (Cth) in not making the payments: [2019] FCCA 292 at [32] to [33]. 21 Grounds 1 and 3 of the Notice of Appeal are directed to the Federal Circuit Court Judge's construction and application of cl 20.2. In very summary form, the Appellants to the present appeal contend (inter alia) that cl 20.2 requires the payment of the "average bonus" on public holidays regardless of whether the public holiday falls on the weekend or a weekday. 22 In contrast, the Respondent contends the primary Judge was correct to conclude that cl 20.2 and "the payment of the average bonus on public holidays is concerned with public holidays occurring during weekdays": [2019] FCCA 292 at [33]. An initial difficulty confronting the Respondent employer's argument on appeal was that it potentially depended, on one approach, upon reading into the concluding sentence of cl 20.2 of the 2010 Agreement the words "… other than a Saturday or Sunday". In the employer's submission, however, the question depended not so much upon reading words into cl 20.2 but rather upon construing cl 20.2 in such a manner that gave effect to the object and purpose sought to be achieved in providing for the payment of the mine production bonus set out in cl 20 and the context of the 2010 Agreement as a whole. 23 If this dichotomy of approach be presently left to one side, the object and purpose of cl 20 as a whole was self-evidently to provide for the payment to employees of a "bonus". The payments in cl 20 clearly provided an incentive to employees to meet and exceed planned production. The "Mine Production Bonus Scheme", according to the terms of cl 20, had two elements to it, namely the payment of a: "[d]evelopment bonus" dependent upon the "linear metre of advance[ment]" (cl 20.5); and "[r]un of mine bonus" dependent upon the tonnage of coal mined (cl 20.6). 24 Pursuant to the terms of cl 20, it was a scheme: "calculated and paid on a weekly basis" (cl 20.1); and "designed on a nominal 5 days per week production cycle" but which "recognised that from time to time normal business activities may vary this balance" (cl 20.3). And, the mine production bonus was payable: "…on all forms of approved paid leave and for the first 39 weeks of accident pay…" (cl 20.2). It is thus correct to observe, as do the Appellants in their written submissions, that it "does not follow from the nominal length of the production cycle for bonus calculation purposes that employees will only work on weekdays, nor that they will necessarily work 5 shifts in a week". The terms of the 2010 Agreement, those written submissions also correctly point out, "expressly contemplate shifts up to a maximum of 12 hours … and rostered weekend work". The Appellants' written submissions further accurately state that "[t]he Mine Production Bonus cannot be understood simply as a reward or incentive linked to attendance and/or performance at work, let alone attendance at or performance of work on a weekday". 25 The payment of the mine production bonus had a number of further characteristics, namely it was paid: on a "per employee basis" (cl 20.3); and irrespective of (for example) the number of days an employee worked in one week as opposed to another or the rosters or hours in fact worked by an employee or whether the employee was engaged on an afternoon as opposed to a night shift. There is thus a discernible intent on the part of the draftsmen of cl 20 to ensure that the bonus is payable to all "[e]ligible employees" on an equitable basis that places to one side a host of variables that may apply to a particular employee or even the same employee from one week to another or the shifts allocated to an employee. 26 It is the equitable characteristic of the bonus scheme which, it is respectfully considered, leads to the conclusion that the mine production bonus: is only payable to an employee who was otherwise required to work on a public holiday during the normal weekday working cycle, but who did not in fact work by reason of a public holiday occurring during that cycle - such an employee remained "eligible" to be paid the "average bonus" notwithstanding the fact that he did not work on such a public holiday; and to the conclusion that the mine production bonus: is not payable to an employee who in fact is required to work on the weekend. The evident purpose of cl 20.2 was thus to ensure that an employee was not disadvantaged by reason of being allocated to work but not in fact working on what was a public holiday occurring during the "nominal 5 days per week production cycle". 27 Notwithstanding the fact that the construction urged on behalf of the Appellant employees gave literal effect to the meaning of the words employed in cl 20.2, it is nevertheless concluded that the final sentence to that clause - when read in the context of the object and purpose of making provision for the payment of a "Mine Production Bonus" - confines the payment of the bonus to employees who were to work on a public holiday during the normal working cycle. 28 No error is thus exposed in the same conclusion having been reached by the Federal Circuit Court. The Federal Circuit Court Judge was correct in the construction he gave to cl 20.2 and in applying that construction to the Second, Third and Fourth now-Appellants. 29 Queens Counsel for the Respondent was thus correct in submitting that such a construction of cl 20.2 does not involve the "reading into" of that provision any additional words but rather gives effect to the natural and ordinary meaning of that clause when read in the context of the 2010 Agreement as a whole. 30 Read in context, and as submitted by the Respondent: the payment of an "average bonus" on a public holiday is simply a "make-up" measure to account for production not occurring on a public holiday when production would ordinarily be planned. By way of contrast, the construction urged on behalf of the Appellants: would confer upon the Second, Third and Fourth Appellants a windfall in circumstances where each employee had already become entitled to a full week's entitlement of the mine production bonus. 31 Grounds 1 and 3 of the Notice of Appeal are thus rejected.

The night shift loading - Grounds 2 & 4 32 In the period between April 2015 and April 2017, the Third and Fourth Appellants were not paid the night shift loading provided for in cl 21.1.2 of the 2010 Agreement when they worked night shifts on a number of public holidays. 33 The issue which arose was whether those employees who worked night shifts on a public holiday were entitled to be paid the loading provided for in cl 21.1.2 of the 2010 Agreement in addition to the rate of payment provided for in cl 35.3 of that Agreement. 34 Again, no question arose before the Federal Circuit Court - nor before this Court - as to the quantification of payments to be made in the event that the Third and Fourth Appellants were entitled to receive that payment. 35 The Federal Circuit Court Judge concluded that those Appellants were not entitled to receive payment of the night shift loading and, accordingly, that there was no contravention of s 50 of the Fair Work Act 2009 (Cth) in not paying that loading: [2019] FCCA 292 at [38]. 36 Grounds 2 and 4 of the Notice of Appeal are directed to the conclusions reached by the Federal Circuit Court Judge with respect to the construction and application of cll 21.1.2 and 35.3 of the 2010 Agreement. 37 Again, the manner in which cll 21.1.2 and 35.3 were drafted caused either confusion or, at the very least, were the starting point for an argument as to uncertainty. All such argument could have been avoided by the simple expedient of (for example) drafting either of those two clauses in such a manner that expressly recognised that an employee was not entitled to the loading provided for in cl 21.1.2 in those circumstances where triple time was to be paid in accordance with cl 35.3. 38 Clause 35.1, it may be noted, defines the phrase employed in cl 35.3, namely "recognised public holidays". 39 If the starting point for the interpretation of an industrial agreement is the language employed, the language left a lot to be desired. But, again, these two clauses had to be construed not only according to the language employed but also by reference to the object and purpose of the 2010 Agreement as a whole. 40 Read in context, it is respectfully considered that the Respondent employer's argument on appeal, with respect to the second and fourth Grounds of Appeal, are correct either because: the 2010 Agreement should be read such that it is the specific provision made in cl 35.3 which regulates the payment to be made rather than the general provision in cl 21.1.2 - the specific provision thus excludes the generally expressed provision; or because: the payment of triple time in accordance with cl 35.3 is a recognition of the industrial objective of compensating employees who have to work on "recognised public holidays", whereas cl 21.1.2 is a recognition of the industrial objective of more generally compensating employees who have to work a "night shift". And, although the two provisions can be read as conferring on an employee who satisfies the requirements of both provisions an entitlement to be paid the two amounts, the industrial objective (it is considered) is to compensate an employee only once for having to work at a time outside of that normally recognised as a working day or, phrased differently, having to work what has been referred to as "unsociable and non-family friendly hours": cf. Construction, Forestry, Mining and Energy Union v Endeavour Coal Pty Ltd (t/a Appin Mine) [2017] FWCFB 4487 at [64]. 41 Industrial agreements have long provided for the payment of higher rates of pay to compensate for "disturbance of social and family life". In Re Engine Drivers and General (State) Interim Award [1950] AR (NSW) 260, Cantor, Webb and Richards JJ there observed at 268: In our opinion additional rates for week-end work are given to compensate the employee for having to work on days which are not regular working days for all employees in industry. The aim is to compensate for disturbance of social and family life and the full opportunity of religious observance, and in some cases to discourage employers working employees on non-regular working days. Where a standard rate has been set by this Commission for week-end work, in order to establish an exception to such standard rate, and the necessity for a higher rate than the standard, some good and special reason must be shown. The observations in the passage above, regarding compensation, it may be noted, have recently been endorsed in Re 4 Yearly Review of Modern Awards - Penalty Rates [2017] FWCFB 1001 at [144] per Ross J, Catanzariti VP, Ashbury DP, Hampton and Lee CC. It has also long been accepted that where a shift allowance and the like has been prescribed for working (for example) on a weekend, the higher rate prescribed is to be taken as adequate compensation in itself for being required to work on a weekend or public holiday: Federated Engine-Drivers and Firemen's Association of Australasia and A I Amalgamated; Re Dorman Long & Co Ltd (1930) 29 CAR 229. Beeby J there concluded at 229: The point involved in this application is what rates should be paid to shift workers on Sundays and holidays. Under the award, men on shifts are entitled to time and a quarter rates, and for work done on holidays and Sundays double time is prescribed. The union contends that double time on Sundays and holidays means double shift rates; the employers contend that double time means double ordinary rates. I reserved judgment for the purpose of considering a number of decisions in which the same point is involved. I find that the general rule laid down by the Court is that "rate" or "time" means the ordinary rate mentioned in awards, and that double time, therefore, means double ordinary time. In some awards there is express provision that extra rates shall not accumulate beyond the double ordinary time. I therefore find that shift workers on Sundays and holidays are only entitled to double ordinary time. The circumstances of the special agreement as to hours do not affect the principle involved. The summons for variation is therefore dismissed. 42 To construe cl 21.1.2 and cl 35.3 as conferring an entitlement upon an employee to be paid both the 25% loading provided for in cl 21.1.2 and the triple time rate provided for in cl 35.3 would be to compensate the employee in a manner which could not have been the intent of the draftsmen of the 2010 Agreement. 43 If cll 21.1.2 and 35.3 be construed differently, such that a choice is to be made between construing: clause 21.1.2 as the "specific" provision, namely the provision which specifically applies to work "after 1.00am and before 9.00am"; and clause 35.3 as the "general" provision that choice should be exercised in favour of conferring the greater benefit of the triple time rate upon an employee. 44 Expressed differently, the triple time rate of pay imposed by cl 35.3 is a payment in lieu of such other loadings to which an employee would otherwise be entitled. 45 Contrary to the argument advanced on behalf of the Appellants, a conclusion that cl 35.3 excludes the entitlement to be also paid under cl 21.1.2 is not a conclusion founded upon a construction of cl 35.3 that it is a provision "designed to oust all other entitlements". Clauses 21.1.2 and 35.3 focus upon the rate of payment to which an employee is entitled for working a night shift or on a public holiday, one clause providing for a "25% loading" and the other prescribing a "triple time" rate of payment. Clause 35.3 says nothing as to the entitlement of an employee to be paid such other sums as are payable not in respect to when work is performed but in respect to (for example) the "Tool Allowance" payable under cl 21.3 or the "Occupational First Aid" allowance payable under cl 21.4 of the 2010 Agreement. 46 Reliance upon the phrase appearing in cl 35.3 "for all time worked" as a reason for construing that provision as ousting an entitlement to be paid the 25% loading provided for in cl 21.1.2 is, with respect, more open to argument. One objective in employing that phrase may have been, as contended by the Appellants, an intent to embrace the composite of those "ordinary rostered hours" and the "other hours" later referred to in cl 35.3. However, there nevertheless remains room for the argument advanced on behalf of the Respondent. A further objective, so argues the Respondent, was to manifest an intention that the payment of triple time payable for "all hours worked" excluded any other entitlement to a "loading" for having "worked" during those "hours" between 1.00am and 9.00am, such as that provided for in cl 21.1.2. On balance it is concluded that the terms employed in cl 35.3, irrespective of any consideration given to the objective of compensating an employee for "working unsociable and non-family friendly hours", provide support for the conclusion reached that an employee is not entitled to payment of the night shift loading under cl 21.1.2 in addition to the triple time payable under cl 35.3. 47 Grounds 2 and 4 of the Notice of Appeal are thus rejected.

CONCLUSIONS 48 No appellable error is discernible in the conclusions reached by the Federal Circuit Court Judge. 49 The appeal should thus be dismissed.

THE ORDER OF THE COURT IS:

1. The appeal is dismissed. I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick.