Construction, Forestry, Mining and Energy Union v Hail Creek Coal Pty Ltd [2018] FCA 125 | Case summary

The facts 5 The facts of the case fall to be determined from a Statement of Agreed Facts and admissions made in the Amended Defence. The parties do not rely on affidavits or other evidence to establish any other facts. 6 The Employer operates an open-cut coal mine in central Queensland known as the "Hail Creek Mine". The Employer may carry on operations at the mine 24 hours per day, seven days per week. This requires that a day shift and a night shift be worked each day. 7 The applicant and the Employer are parties to the Enterprise Agreement, which was approved by the Fair Work Commission in 2011. The Enterprise Agreement was considered by the Full Court in Construction, Forestry, Mining and Energy Union v Hail Creek Coal Pty Ltd [2015] FCAFC 149 in the context of a dispute about sick leave, but that case is not relevant to the present issue. 8 The Enterprise Agreement applies to and covers the Employer and those of its employees based at the mine site who work in operator and maintainer roles. 9 Some operators and maintainers are rostered to work day shifts. Others are rostered to work a combination of day and night shifts. 10 On 21 September 2015, the Employer implemented changes to the roster patterns for some maintainers and operators by reducing the lengths of their shifts from 12.5 hours to 12 hours. The rostered finishing time for their day shifts was changed from 7 pm to 6.30 pm, and for night shifts from 7 am to 6.30 am. The Statement of Agreed Facts identifies 20 employees (the Affected Employees) whose roster patterns were affected by the changes. 11 The Employer then reduced the amount of Roster Allowance paid to the Affected Employees. For one group, the amount of Roster Allowance was reduced by $4,500 per annum and for another group the amount was reduced by $4,200 per annum. The case concerns whether or not the Enterprise Agreement allowed the Employer to reduce the amount of Roster Allowance when it reduced the shift lengths. 12 Clause 7.1 of the Enterprise Agreement provides: 7.1 Full-time and Fixed Term Employees Full-time and fixed term Employees will be paid an annualised salary that includes provision for all ordinary hours averaged over a roster cycle, overtime penalties, loadings and all other payments or allowances (Total Salary). The Total Salary is comprised of a Role Base Salary, a Market Allowance, a Commute Allowance and a Roster Allowance where applicable. Annexure 1 sets out the salary structure. ... 13 Clause 7.6 of the Enterprise Agreement provides: 7.6 Method of Payment An Employee's Total Salary following adjustment if required for a salary sacrificing arrangement, will be paid monthly into bank accounts of the Employee's choice. ... 14 Clause 10.1 of the Enterprise Agreement provides: 10.1 Rosters Employees will be required to work the hours that are reasonably necessary to perform their role. Employees may be required to work shifts of up to 12 1/2 hours duration. Hail Creek may carry out its operations 24 hours per day, 7 days per week. Hail Creek will implement and change roster systems to meet the needs of the operation and in consideration of the health and safety needs of Employees. Prior to the introduction of any new roster system, Hail Creek will consult with the Employees directly affected, as far as is practicable, and will give prompt consideration to the matters raised by the Employees. Employees may be required to perform a handover for communication and work continuity. Recognition for this requirement is included in the Employee's Total Salary. Employees may be required to change between day shift, shift work, shift work and day work or from one form of shift or shift roster to another. 15 Clause 10.2 of the Enterprise Agreement provides: 10.2 Indicative Hours An Employee's Total Salary represents payment for the performance of their role, not for the hours attending work. An indicative number of hours to be worked by a full-time Employee are contained in the roster descriptions in Annexure l. The Total Salary has been determined on the basis that an Employee may need to work reasonable hours in addition to those hours indicated in Annexure 1 to perform their role. 16 Items 1 to 5 of Annexure 1 to the Enterprise Agreement provide: 1 Total Salary The Total Salary of an Employee will comprise the Role Base Salary applicable to the Employee, the relevant Market Allowance, Commute Allowance and Roster Allowance where applicable. … 2 Role Base Salary An Employee's Role Base Salary includes compensation for additional hours that are worked during employment. An Employee's Role Base Salary will be reviewed annually. Role Category Minimum Role Base Salary Operators $60,000 per annum Maintainers $69,250 per annum

Consideration 27 The construction of an industrial instrument is a text based activity, but the industrial context is also important: Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 at [2], [65]-[67], [77]. In Kucks v CSR Limited (1996) 66 IR 182, Madgwick J discussed the relevance of the industrial context at 184: 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. 28 Before turning directly to the question of construction of Item 4 of Annexure 1 of the Enterprise Agreement, it is necessary to emphasise some matters of context. 29 Under cl 7.1 of the Enterprise Agreement, the Total Salary payable to maintainers and operators consists of four components. Three of those components (Role Base Salary, Market Allowance and Commute Allowance) are fixed amounts. The only component susceptible to change is Roster Allowance. Clause 10.1 allows the Employer to change its roster systems for operational reasons, although it envisages that such systemic change will be infrequent, since consultation is required. Further, under cl 10.1, employees may be required to change between the type of shifts or shift rosters they work. The amount of Roster Allowance changes with changes in shift rosters. 30 The Enterprise Agreement emphasises that the hours the employees are required to work are not fixed. Clause 10.1 provides that employees will be required to work the hours that are reasonably necessary to perform their roles. Clause 10.2, which has the heading "Indicative Hours", states that "an employee's Total Salary represents payment for the performance of their role, not for the hours attending work". Clause 10.2 also states that "indicative" numbers of hours to be worked by a full time employee are contained in the "roster descriptions" in Annexure 1. Clause 10.2 goes on to say that Total Salary has been determined on the basis that an employee may need to work reasonable hours in addition to the hours indicated in Annexure 1 in order to perform their role. Item 2 of Annexure 1 indicates that an employee's Role Base Salary includes compensation for additional hours that are worked during employment. 31 It may be seen that under the Enterprise Agreement, the parties obtained certainty as to remuneration, subject only to possible variations in Roster Allowance. The Employer also obtained the certainty that it can require employees to work reasonable additional hours to meet the operational needs of the mine. Against the substantial certainty the Employees gained as to their salaries, they traded off uncertainty as to the hours they will be required to work. It is in this context that Item 4 of Annexure 1 falls to be construed. 32 Item 4 has the heading "Roster Allowance". The first paragraph of Item 4 states that Roster Allowance compensates an employee for "all disabilities and working hours associated with the role, including the requirements of the roster, and work on any shift, weekend or public holiday required as part of the role, but excluding the additional hours incorporated in the Role Base Salary". 33 The second paragraph of Item 4 sets out the calculation of Roster Allowance "for a roster not set out in this Annexure". The rosters set out in the Annexure are those described in the Table. The third and fourth rosters described in the Table are directly relevant to this case, for which the Roster Allowances are fixed amounts of $33,000 and $27,500 respectively. 34 The third roster in the Table is: eg 7 Day Continuous Shift Indicative 45.75 hour week 35 The fourth roster in the Table is: 7 Day Day Shift Indicative 45.75 hour week 36 The Employer accepts that each of the Affected Employees originally worked under the third or fourth roster. The Employer submits that when it reduced the shift lengths by 30 minutes, the rosters worked by the Affected Employees each became "a roster not set out in" the Table, and therefore Roster Allowance fell to be calculated under the second paragraph of Item 4. 37 The Employer's submission involves two propositions, namely: (1) The words "Indicative 45.75 hour week" in the Table form part of the description of each of the rosters contained in the third and fourth items. (2) If employees are rostered for something less than a 45.75 hour week, the roster is "a roster not set out in" the Table. 38 I accept the Employer's first proposition, and reject the applicant's submission to the contrary, for the following reasons. 39 First, the descriptions in the Table appear under the heading "Roster". Thus, the words and figures in the Table are intended to describe a type of roster. The words "Indicative 45.75 hour week" are not separated out in a way that suggests that they are not intended to be part of the description of the relevant rosters. 40 Second, an important purpose of a roster is to inform employees when they will be working and for how long they will be working during a roster period. Rosters can usually be expected to indicate which days the employee will work in a roster period and their starting and finishing times; and, thus, the number of hours they will work: c.f Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2011] FCA 1294 at [16]-[18] (Logan J). The position is different in this case because the maintainers and operators do not work for a specific number of hours, but are instead required to work such hours as are "reasonably necessary to perform their role". However, cl 10.2 states that "an indicative number of hours to be worked by a full-time Employee are contained in the roster descriptions in Annexure 1". The indicative number of hours serves two purposes. It allows employees to understand the approximate number of hours they will usually be required to work. Further, the indicative hours form a base against which the reasonableness of additional hours can be assessed. The words "Indicative 47.75 hour week" perform a function of the type usually performed by rosters, namely informing employees as to their likely hours of work. This supports the proposition that the words "Indicative 45.75 hour week" are part of, and are not separate from, the roster descriptions set out in the Table. 41 Third, cl 10.1 of the Enterprise Agreement provides that the Employer may change roster systems to meet the needs of the operation and may change employees from one roster to another. Roster Allowance is the sole component of the employees' Total Salary that is subject to variation. It seems unlikely that the parties intended that if operational needs meant that the number of hours for which the employees are rostered substantially diminished, the Employer should nevertheless be required to continue to pay the same rate of Roster Allowance. That position can be contrasted with Role Base Salary, Market Allowance and Commute Allowance which explicitly do not change with variations in the number of hours of work. 42 Fourth, I do not accept the applicant's argument that the words "but excluding the additional hours incorporated in the Role Base Salary" in the first paragraph of Item 4 indicate the absence of a connection between hours of work and the amount of Roster Allowance payable. There is a distinction in the Enterprise Agreement between rostered hours and the actual hours employees may be required to work. The words relied on by the applicant serve to emphasise that the Roster Allowance is not intended to compensate employees for the actual number of hours they work. They do not indicate that there is no connection between Roster Allowance and rostered hours. 43 Fifth, while I accept the applicant's submission that there is no significant or expressed correlation in the Table between the indicative hours and the amounts of Roster Allowance, that is not determinative. It does not mean that the parties intended that Roster Allowance must stay the same even if the rostered hours are significantly reduced. 44 Sixth, I do not accept the applicant's submission that under the second paragraph of Item 4, the method of calculation of Roster Allowance for a type of roster not listed in the Table does not take into account shift lengths, but only requires Roster Allowance to be calculated on the basis of the weekly rates of pay set by a relevant award. The evidence and submissions do not explain how the Roster Allowance has been calculated under the second paragraph of Item 4 since the shift lengths for the Affected Employees were reduced. The relevant award was not placed before the Court and it is not apparent whether the "weekly rates of pay" under the award are calculated by reference to the hours worked each week. In these circumstances, I am not satisfied that the calculation of Roster Allowance under the second paragraph of Item 4 is not based upon the number of hours worked. 45 Seventh, while cl 10.2 of the Enterprise Agreement offers some support for the applicant's argument, that support is not sufficient. The first sentence of cl 10.2 states that "An Employee's Total Salary represents payment for the performance of their role, not for the hours attending work". The Total Salary includes a component for Roster Allowance, suggesting that the amount of Roster Allowance does not depend upon the number of hours for which employees actually work. Accordingly, it might be expected that Roster Allowance does not depend upon the number of hours for which an employee is rostered to work. However, as I have found, there is a distinction under the Enterprise Agreement between actual hours and rostered hours. The rostered hours have the functions I have described above. There is no necessary inference that because Roster Allowance is not affected by the hours actually worked, Roster Allowance is not affected by the number of hours employees are rostered to work for. 46 For these reasons, I conclude that the words "Indicative 45.75 hour week" form part of the descriptions of the third and fourth rosters in the Table. If a roster does not answer any of the descriptions in the Table, it will be "a roster not set out in this Annexure". 47 However, it remains to consider the Employer's second proposition that a reduction in the rostered hours means that the roster description no longer meets the descriptions contained in the third and fourth items in the Table. 48 I accept the Employer's second proposition in part, but not completely. While I consider that a substantial reduction in the number of rostered hours would mean that a roster description would no longer meet the descriptions contained in the Table, I do not accept that the same can be said where the reduction in the rostered hours is only slight. I reach this conclusion for the following reasons. 49 First, the word "Indicative" in the Table is significant. As I have explained, under the Enterprise Agreement, the number of hours that employees will actually work is uncertain. Thus, the roster cannot specify the number of hours per week of actual work. Instead, only an "indicative" number of hours can be given. In this context, the relevant definition of "indicative" in the Shorter Oxford English Dictionary is "suggestive of". To put it another way, the expression "Indicative 45.75 hour week" in the Table signals that employees are rostered to work approximately 45.75 hours per week, but that they may have to work a reasonable number of additional hours in order to perform their roles. 50 Second, it is quite unlikely that there could have been a mutual intention to allow the Employer to pay substantially less Roster Allowance by making a slight reduction in the rostered hours while still requiring the employees to work the same number of actual hours as before. Even though the shift lengths have been reduced from 12.5 hours to 12 hours, cl 10.1 of the Enterprise Agreement allows the Employer to require employees to work additional hours if these are reasonably necessary to perform their roles. Accordingly, while the Roster Allowance has been reduced by $4,500 per annum for one group of Affected Employees and by $4,200 per annum for another, they may still be required to work the same hours as before. There is no suggestion that the reduction in shift lengths is part of a deliberate strategy by the employer to have the same amount of work done for less money, but the potential for that to happen makes it unlikely that there was a mutual intention that only a slight reduction in the number of rostered hours would mean that a roster description no longer answers the description in the Table. 51 The issue in this case ultimately devolves to an evaluative, factual one. It is whether the reduction in the shift lengths of 30 minutes per shift is so substantial that the rosters no longer answer the descriptions of the third and fourth rosters in the Table. One difficulty is that there has been no explanation offered by the parties as to the correlation between the "Indicative 45.75 hour week" and the shift lengths and number of shifts described in the Statement of Agreed Facts. However, the reduction of the shift lengths by 30 minutes must have resulted in a reduction in the indicative number of hours per week to something below 45.75. That is the premise of the Employer's case. The extent of the reduction in indicative hours is not clear, but it can be inferred that it must have been proportional to the reduction in shift lengths. The reduction of the shift lengths from 12.5 to 12 hours was a reduction of 7%. There must have been a corresponding reduction in the rostered hours per week by 7% to 42.5 hours. 52 In my opinion, a reduction of the rostered hours to 42.5 hours per week is not substantial enough to conclude that the rosters do not meet the description of an "Indicative 45.75 hour week". The reduction did not result in the rosters becoming rosters "not set out in this Annexure". It follows that the calculation of Roster Allowance for the Affected Employees must be done by reference to the Table, and not by reference to the second paragraph of Item 4. 53 Paragraph 30 of the Amended Statement of Claim pleads that each of the Affected Employees has suffered loss by reason of underpayment of Roster Allowance by $350 or $375 per month. The Amended Defence does not respond to that allegation. Under r 16.07(2) of the Federal Court Rules 2011 (Cth), allegations that are not specifically denied are taken to be admitted. In any event, I understand it to be common ground that the monthly amounts of Total Salary paid to each of the Affected Employees are less than the monthly amounts that would be paid if Roster Allowance were calculated in accordance with the Table. 54 The reduced shift lengths were implemented from 21 September 2015. Employees are paid on about the 20th of each month. Accordingly, the Affected Employees have been underpaid each month since about 20 October 2015. 55 I find that the Employer has contravened s 50 of the FWA by failing to pay each of the Affected Employees the amounts of Total Salary payable under the Enterprise Agreement since about 20 October 2015. 56 I will ask the parties to agree on orders for the filing and service of material directed to the determination of any penalty, compensation and declaratory relief. I certify that the preceding fifty-six (56) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rangiah.

Construction, Forestry, Mining and Energy Union v Hail Creek Coal Pty Ltd

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