Fair Work Ombudsman v Woolworths Group Limited; Fair Work Ombudsman v Coles... [2025] FCA 1092 | Case summary

[2]

Application by Penelope Vickers to terminate the Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited Retail Agreement 2011 [2016] FWC 6350

Fair Work Ombudsman v Woolworths Group Limited; Fair Work Ombudsman v Coles... [2025] FCA 1092 | Case summary | Zoe

[71]

Before turning to the issues, it is convenient to outline some salient background matters in each proceeding.
In FWO v Woolworths, the FWO alleges that Woolworths underpaid about 19,000 employees whose employment was governed by the Award between 17 June 2015 to 30 September 2019. The employees in question are in store-based management positions. The most senior of these employees are store managers and the bulk consist of persons who were in charge of particular departments such as the dairy section.
The parties agreed that the case could not sensibly proceed in relation to all 19,000 employees. They sought to overcome this problem by selecting particular employees who were to serve as examples of the disputes between them and obtaining a ruling in the case of each. Initially, the FWO made specific allegations about 70 employees across the period from 5 March 2018 to 3 March 2019 (the 'Calculation Period'). Ultimately, both parties thought this was too many but they disagreed about what an appropriate number would be. Woolworths wished to proceed on the basis of a sample of 10 employees but the FWO contended for 32. On 9 March 2022 I determined that the trial would proceed on the basis of 32 employees (the 'Calculation Employees'): Fair Work Ombudsman v Woolworths Group Ltd (Calculation Employees) [2022] FCA 203. When the outcome of the trial is known the parties will apply the conclusions reached to the remaining employees.
Woolworths operates 1,076 stores in Australia. During the relevant period the 32 Calculation Employees were employed at five of these stores. These were the Town Hall store in Sydney's central business district (Woolworths' largest store in 2018), the Wheelers Hill and Camberwell stores in Melbourne, the Newstead store in Brisbane and the Macarthur Chambers store in Brisbane's central business district. I shall refer to these as the Town Hall, Wheelers Hill, Camberwell, Newstead and Macarthur stores. Of the 32 Calculation Employees nine were called to give evidence. Seven were called by the FWO and two by Woolworths.
In FWO v Coles, the FWO alleges that Coles underpaid 8,767 employees across the period 1 January 2017 to 31 March 2020 (the 'Assessment Period'). The employees are in management positions within individual stores and include store managers and the heads of individual departments within stores such as the butchery section.
I made orders on 25 July 2022 confining the FWO's case against Coles to a representative sample of 42 employees (the 'Sample Salaried Employees'). Unlike Woolworths, each of the Sample Salaried Employees did not necessarily work at a single store. Of the 42 employees, 15 were called to give evidence: nine by the FWO and six by Coles.
The background to Baker is summarised in Baker v Woolworths Group Limited (No 2) [2022] FCA 534 at [9]- [15] per Murphy J. In essence, the proceeding is a class action commenced by the applicants (Messrs Baker and Piro) under Pt IVA of the Federal Court of Australia Act 1976 (Cth) on their own behalf and on behalf of salaried Woolworths employees who worked at some time between 29 November 2013 and 29 November 2019.
In Pabalan, Ms Pabalan brings a representative proceeding on behalf of several thousand Coles managers.

[75]

One of the difficulties with this litigation is the manner in which a majority of the construction issues were posed by the parties in a context divorced from any facts. The point of the 32 Calculation Employees in FWO v Woolworths and the 42 Sample Salaried Employees in FWO v Coles was to permit these common questions to be determined by reference to actual facts. Although in some instances the parties did occasionally refer to these persons this was not a uniform practice. Further, it was clear that rather than starting with the facts of actual disputes and then proceeding to ascertain what the legal debates were the parties essentially approached the problem the other way around. Construction disputes were identified at a high level of generality, facts were an afterthought or, more often, forgotten.
This has two consequences. The first is that the parties have not identified factual disputes for each legal dispute which was the whole point of the process. Before progressing these proceedings any further this problem will need to be addressed. For each legal issue the parties are going to need to identify an employee whose work gives rise to the legal issue suggested. I do not see that there should be any difficulty in identifying these persons. The number of such persons should be kept to an absolute minimum. If a single employee can be used to resolve more than one legal issue then that course should be adopted. There is no need for the whole of the facts concerning that employee to be set out. A single instance (i.e. one shift) will suffice to make the legal issues not hypothetical.
The second consequence is the apparent pointlessness of the Tier 3 issues. These were said to relate to factual matters only. From the parties' submissions it is difficult to understand what the Court was being asked to do in relation to these. At various junctures it has been necessary to resolve some of these issues (for example in relation to opening times of stores) but largely the parties did not seem to know what they intended by the trial of these Tier 3 issues or what practical purpose they served in helping the parties to resolve the wider issues that the regulatory proceedings present. It may be that the resolution of many of the Tier 1 and 2 issues will make them irrelevant. It may be that they were always irrelevant. In any event, I do not generally resolve the Tier 3 issues.
There are also some issues that although labelled as Tier 2 I also decline to resolve. By way of example, Issues 6(b)-(j) are all related in various ways to the application of cl 31.2(c). The parties have styled each issue as a Tier 2 Issue. In FWO v Woolworths (Case Management) [2022] FCA 376 at [4(b)] Tier 2 Issues were described as questions of law mixed with questions of fact. In their recitation of Issues 6(b)-(j) the parties posed a series of questions of law premised on certain factual circumstances but such questions are not mixed questions of fact and law; rather, they are questions of law on an assumed set of facts. For example, Issue 6(b) was as follows:

[96]

All of Woolworths' salaried employees were given annual salaries. These salaries were provided for by a template letter of offer and employment contract (together, 'the contract') various versions of which Woolworths tendered. The salaries consisted of a base salary, a car allowance (where applicable) and superannuation. These three annual amounts were collectively referred to in the contract as the 'Remuneration'. Under the Award, Woolworths was obliged to pay its employees on either a weekly or fortnightly basis: cl 23.1. Under the contract, Woolworths opted for a fortnightly rather than weekly payment cadence. In particular, the contract provided that the base salary was to be paid by fortnightly instalments as was the car allowance. It is unclear how often superannuation was paid but I will assume for present purposes that it was paid fortnightly as well.
Although the contract fixed an annual remuneration this annual fixing was not associated with any direct payment obligation of Woolworths. The actual payment rights and obligations of the parties were derived from the provisions of the contract and the Award requiring payments to be made to the employee on a fortnightly basis. So understood, the contractual stipulation of an annual remuneration was a number from which the actual payment rights and obligations of the parties were derived by dividing that number by 26. As will be seen, this is conceptually significant. In particular, there was no obligation to pay the annual Remuneration but rather only an obligation to pay one twenty-sixth of the annual Remuneration each fortnight.
This fortnightly amount was in excess of the minimum wage due to the employees for working ordinary hours under the Award in each fortnight. The present difficulty arises from the inclusion of a clause in the contract which sought to discharge Woolworths' obligations to make payments under the Award by reference to the non-payable annual Remuneration rather than by reference to the payable (and paid) fortnightly remuneration. This was clause 6:

[100]

The principle is uncontroversial: see Wardman v Macquarie Bank Ltd [2023] FCAFC 13; 322 IR 278 ('Wardman') at [10] per Bromberg J and [126]-[130] per Wheelahan J; WorkPac Pty Ltd v Rossato [2020] FCAFC 84; 278 FCR 179 ('Rossato') at [913]-[921] per White J and [1007]-[1021] per Wheelahan J (not disturbed on appeal). A straightforward example of the principle is afforded in a case where a contract of employment expressly provides that the monthly payment of a contractual salary is also to discharge the employer's obligation to pay the minimum amount due under an industrial instrument each month (where the salary equals or exceeds that minimum amount). Although the parties exchanged somewhat unfocussed but very extensive submissions about this principle, there was it turns out little disagreement between them about it.
The parties also referred very extensively to the two limitations on this principle which are set out in Poletti v Ecob (No 2) (1989) 31 IR 321 ('Poletti v Ecob') at 333 per Keely, Ryan and Gray JJ and summarised in Linkhill Pty Ltd v Director, Office of the Fair Work Building Industry Inspectorate [2015] FCAFC 99; 240 FCR 578 ('Linkhill') at [40]-[67] per North and Bromberg JJ. The first applies where a payment by an employer to an employee is made pursuant to a contractual obligation which the parties have agreed is for a specific purpose extraneous to the payment of award entitlements. The second limitation, which can be termed the 'designation' limitation, applies where a payment (whether paid under a contract or not) is designated as being for a purpose other than the satisfaction of award entitlements. Neither is immediately relevant given that in this case there is an express contractual attribution.
That attribution is contained in cl 6 of the contract. Its evident intent, if perhaps not its precise form, is to permit Woolworths to pool its excess Award payments over a six month period and then to deem that pool to be in 'satisfaction' of Woolworths' obligation to make payments under the Award. The Award payments in question are those for minimum hourly rates together with other entitlements such as the payment of penalties, overtime, allowances and loadings.
The FWO submits that cl 6 is not capable of any lawful operation because of s 323(1) of the FW Act:

[105]

Of course it is not necessary to have an annualised wage provision in a modern award in order for an employer to be able to pay an employee to whom the award applies an annualised salary that compensates for or "buys out" various identified award entitlements. The principles by which this might be done were stated in the Federal Court Full Court decision in Poletti v Ecob (No 2) and subsequently affirmed in the Full Court decisions in Australian & New Zealand Banking Group Ltd v Finance Sector Union of Australia and Linkhill Pty Ltd v Director, Offıce of the Fair Work Building Industry Inspectorate. In short, under a contract of employment the employer and employee may agree that the salary payable under the contract has the purpose of satisfying the obligation to pay identified award entitlements (such as, for example, base wages, overtime rates, shifts and weekend penalty rates, allowances and annual leave loading). The payment of salary pursuant to such a contract of employment may be relied upon by the employer as satisfying in part or whole any claim by the employee for under-payment of the identified award entitlements. However this means of paying an annualised wage to an employee to whom a modern award applies is not entirely free from legal difficulty. If there is a lack of a "close correlation between the nature of the contractual obligation and the nature of the award obligations", then payment of the salary may not satisfy the relevant award entitlements. Further, the fact that an annual salary provided for in a contract of employment may, over the course of a year, equal or exceed identified award entitlements such as to discharge payment of them may, arguably, not amount to compliance with an award requirement that pay entitlements are required to be made to the employee within a specified pay period. Issues such as these may make the payment of a salary pursuant to an annualised wages provision in a modern award a more desirable and legally certain option.

(footnotes omitted)

[106]

What this passage shows is that there are real doubts as to whether what has been sought to be done in this case can be done. The last sentence shows that the Commission's proposed solution is not the one misattributed to it by Woolworths in its submission - namely a well-drafted annual salary provision - but rather the insertion in an award of a provision authorising the payment of a salary pursuant to an annualised wages provision. I do not regard the Commission's decision as assisting either party in the resolution of the question but it does underscore that the problem at hand is of some difficulty.
Returning to the issue, in each fortnight, Woolworths has two sets of payment obligations. The first consists of its obligation to pay a fortnightly instalment of the annual Remuneration. The second consists of its obligation to pay amounts due under the Award each fortnight.
As a matter of contract law, there would be no difficulty with an attribution clause which provided that payment by Woolworths of the fortnightly amounts of the annual Remuneration was to be in complete satisfaction of its obligations to make fortnightly payments under the Award. This would be so even if the amount of the fortnightly Award payments exceeded in a given fortnight the fortnightly amount of annual Remuneration. At common law, nothing prevents a creditor and a debtor from agreeing that the payment of a smaller debt will also discharge a larger debt.
The position is more complex in an employment context governed by s 323(1) for it is not possible for an employer and employee to contract out of obligations imposed upon an employer by an industrial instrument such as the Award. The reasons for this are perhaps less than obvious but they are provided by s 323(1)(a): amounts which are payable to an employee are to be paid in full. Amounts may be payable to an employee by reason of a contractual entitlement but they may also be payable by reason of an industrial instrument. A payment under a contractual provision which purported to discharge the employer's obligation to pay an employee's entitlements under an industrial instrument but which was less than those entitlements would fall foul of s 323(1)(a). It would result in the award entitlements being paid less than in full.
However, I agree with Woolworths that s 323(1) is not the source of award entitlements. The relevant award is. Section 323(1) governs only the manner in which those pre-existing entitlements are to be paid. A failure to meet the methodological prescription in s 323(1)(a) that payment be 'in full' constitutes a contravention of the provision but does not preclude a partial payment from discharging, as far as it can, award entitlements. It follows that it is not an invalidating characteristic of an attribution clause in an employment situation that payments made under it which purport to discharge award entitlements may not completely discharge those entitlements.
In saying that, I reject Woolworth's submission that s 323(1) is shown by secondary materials to be concerned to prevent payments in kind in such a way as to limit the meaning of 'in full' in s 323(1)(a). Resort to the passages cited by Woolworths of the Explanatory Memorandum which accompanied the Fair Work Bill 2009 (Cth) shows that the avoidance of payments in kind was the purpose of s 323(1)(b), not s 323(1)(a).
Notwithstanding that s 323(1) merely regulates pre-existing obligations, it is instructive that the provision requires an employer to 'pay' those obligations. This is reflected in the language of cll 23.1 and 29.2 of the Award, which respectively require that wages and overtime be 'paid'. The monetary obligations arising under the Award are therefore obligations to pay and may only be discharged by a payment.
Clause 6 of the contract does not operate by reference to a payment. Rather, it provides that 'the Remuneration and other benefits under this Agreement' will be 'in satisfaction' of Woolworths' obligation to make payments under the Award. The term 'Remuneration' is defined in the agreement to consist of the three annual elements I have mentioned: a base salary, a car allowance and superannuation. As such, the Remuneration as defined is an annual sum of money. Whilst contractually and by reason of the Award the Remuneration is to be paid fortnightly, the fortnightly payments are not what cl 6 seeks to operate upon.
Rather than providing that 'the payment of the Remuneration and other benefits will be in satisfaction' of the Award payments, cl 6 provides only that 'the Remuneration and other benefits under this Agreement will be in satisfaction' of the Award payments. If it had said 'the payment of the Remuneration and other benefits' then this would necessarily have linked the obligation to make those fortnightly payments to monetary obligations falling due in the same fortnight under the Award.
That it does not do so is probably not accidental. It is evident that the drafter of cl 6 had in mind, at least 'as far as possible', pooling over-Award payments across a six month period and then providing for the acquittal of award payment obligations across the same period. Such a pooling arrangement cannot operate if the concept of payment is allowed to intrude. If the fortnightly payment obligation is referred to instead then the 26 week pool is broken into 13 self-contained segments and pooling cannot occur outside each fortnight.
As it stands, cl 6 is therefore a most curious provision. It purports to discharge monetary obligations arising under the Award by reference to a sum calculated across a 26 week period which is never payable and which is itself never paid. Subject to questions of contractual certainty (to which I will briefly return), I do in principle accept that this could be done as a matter of contract law. A party may discharge a monetary obligation by any agreed means including, for example, by tender of performance. If that be so, I do not see why the parties could not also agree that a monetary obligation might be discharged because of the existence of an accounting abstraction rather than some other payment obligation. Here the accounting abstraction is the sum of the 13 fortnightly payments which occur over the 26 weeks referred to in cl 6. It is an accounting abstraction because there is no obligation to pay that sum under the contract or the Award. Its abstract nature is underscored by the fact that the notional sum consists of 13 fortnightly payments which have either already been paid or have not yet been paid. The abstract nature of this accounting device shows why it cannot be the subject of a payment obligation for it would be meaningless to speak of an obligation to pay such an abstraction. Even so, as I have said, as a matter of contract law the parties could agree that such a notional pool could be used to discharge some other payment obligation (in the same way that a non-monetary act such as tender of performance may by agreement discharge a monetary obligation).
However, whether that be so as a matter of contract law or not, I do not accept that an accounting abstraction can be used to discharge monetary obligations imposed by an industrial instrument. The Award requires an employer to 'pay' the amounts which are due and the existence of an accounting abstraction is not a payment.
Thus, the vice of cl 6 is that it does not identify a payment which can actually operate to discharge Woolworths' obligations to make payments in full of the employee's entitlements under the Award. This is not to conclude that an attribution clause cannot work in an employment context. Rather, it is to conclude that any such attribution clause can only discharge award payment obligations with actual payments. Since cl 6 does not identify a payment to discharge the Award payment obligations but rather a pool which is not payable and is not paid, it cannot discharge the payment obligations imposed by the Award.
If the matter is left on this basis, then cl 6 does not operate in any case to discharge Woolworths' obligations to make payments under the Award. I think it unlikely that either the employees or Woolworths understood that the bargain they were agreeing to was that Woolworths would pay the employees an annual salary, car allowance and superannuation and then, on top of that, all of the employees' entitlements under the Award. That is an absurd situation which the parties can hardly be taken to have intended.
To avoid this outcome, it is necessary to read the reference to 'the Remuneration and other benefits under this Agreement' as 'the payment of the Remuneration and other benefits under this Agreement'. So construed cl 6 refers to fortnightly payments of the Remuneration and, as such, can lawfully operate as an attribution clause. Each fortnightly payment of the Remuneration will discharge an equal amount of any obligations falling due in that fortnight under the Award.
That construction renders ineffectual the reference in cl 6 to a 26 week period. I do not think that this is a problem. Clause 6 is qualified, as I have noted, by the words 'as far as possible'. For the reasons I have given, six monthly pooling is not possible (at least in the present circumstances) but fortnightly pooling is. The only possible operation of cl 6 is therefore to set off Woolworths' payment obligations under the Award on a fortnightly basis. There is no need to read down the reference to 26 weeks to two weeks because, on the above reading of the clause, the words 'payment of' already have the effect of pooling across each fortnight. The reference to 26 weeks can simply be disregarded.
Whilst it is not necessary to form a view about this for the purposes of this litigation, it is doubtful in my mind that cl 6 could ever be redrawn to achieve a six monthly pooling. It is unlikely that payments which have occurred in past pay periods can be characterised as payments for the purposes of the Award. For the same reason, I think it unlikely that payments in the future can be characterised as payments in the present pay period either. If this be correct, then a six monthly pooling operation for cl 6 cannot be resurrected by careful drafting.
I have mentioned above the problem of contractual certainty. Without elaborating on this in any detail, the problem arises because what the employer is obliged to pay in any pay period cannot, in many cases, be known until the end of the six month period. Given the way I believe cl 6 must be construed however this problem does not arise.
I have been unable to identify an authority which directly considers whether an employer is prevented from setting off against its obligations under an award in one period the amount of over-award payments in the past or which may yet happen. Goldberg J refused an attempt by an employer to set off against award underpayments in some weeks the amounts paid to the employees in other weeks which exceeded the award entitlements: Textile, Clothing and Footwear Union of Australia v Givoni Pty Ltd [2002] FCA 1406; 121 IR 250 ('Givoni') at [60]-[65]. However, his Honour's reasoning was based on the application of the designation limitation in Poletti v Ecob rather than the possibility of set-off between pay periods. As such, I do not think that the decision either aids or detracts from the conclusion I have reached.
Both parties also suggested that Fair Work Ombudsman v Transpetrol TM AS [2019] FCA 400 ('Transpetrol') is relevant to this point. The employees in that case, crew members on an oil and chemical tanker, were paid a salary by Transpetrol according to a uniform scale irrespective of which nation's law governed their employment contract. To cater for discrepancies in different national laws and for other requirements peculiar to maritime employment, the gross sum for which that salary scale provided was in excess of that required by the relevant Australian award. Rares J accepted that Transpetrol could apply the excess to set off (in part) certain overtime and ordinary wage entitlements under the award which the FWO alleged had not been fully paid.
Two points should be noted about Transpetrol. First, it is not at all clear that the result in the case was that amounts paid in one period could be used to set off award obligations in a different period. If the crew members' salary (including the excess) was paid at regular intervals, as would assumedly have been the case, then the overtime and ordinary wage entitlements said to have been underpaid may have arisen in the same period as the salary payment such that there would be no set-off between pay periods. Secondly, the contest between the parties was confined to whether Transpetrol had designated the excess to purposes other than satisfying any entitlement to wage rates and overtime payments so as to engage the designation limitation. As such, Rares J was not confronted with any argument as to the possibility of set-off between pay periods and I do not consider the decision to say anything on that point.
It is then necessary to deal with the Full Court's decision in Wardman. There were a number of issues in the case one of which related to annual leave loading. Clause 24.3 of the award in that case provided that during a period of annual leave an employee would receive a 17.5% loading, or the relevant weekend penalty rates whichever was the greater, calculated on the relevant rate of wage. A number of employees had brought proceedings against the respondent bank. At [57] Wheelahan J noted that a global approach had been taken to the position of the various employees which had resulted in 'cost and efficiency benefits' in the litigation but that by taking this global approach 'individual employees may have made some compromises in the way their claims were advanced'. The employees had been paid commissions on top of their base salary. The main issue was whether these commissions discharged the bank's obligations under the award including the annual leave loading. The trial judge had concluded that the payments did not include payments on account of leave, annual leave or public holidays. There were 48 employment contracts involved in the appeal. All but three of these did not involve a contractual attribution clause and are not relevant for present purposes. However, in three cases - Haslem, McKenzie and Ryan - there was a contractual attribution clause in these terms:

[109]

First, I recognise that the Bank did not seek to argue that Haslem, Mackenzie, or Ryan received additional remuneration or any higher rate of pay whilst on annual leave, as compared to other periods throughout the year. This may appear to be at odds with the temporal nature of the obligation in cl 24.3 of the Award to pay the loading "[d]uring a period of annual leave." But there is no reason why the Bank and each of the three employees, under the terms of their respective employment agreements, could not allocate the monthly salary in satisfaction of any monetary entitlements owing to the employees under the Award, if and when those entitlements arose. Provided that the fixed monthly payments were, throughout all relevant pay periods, sufficient to discharge the Bank's statutory obligations, it is of no consequence that the exact amounts owing pursuant to those obligations may have risen or fallen from time to time (for example, during a period when an employee took annual leave).

Secondly, it is worth restating that it was no part of the case put by any of the employees, at first instance or before this Court, that the monthly salary component of the BCR fell below the minimum rates of pay that they were entitled to receive under the Award, with or without the additional 17.5% loading annual leave loading. I have concluded that the Bank could rely on the monthly salary component of the BCR in satisfaction of its Award obligations to pay the employees a minimum salary or wage. In relation to Haslem, Mackenzie, and Ryan, I have also concluded that the Bank could rely on the payments in satisfaction of its Award obligation to pay annual leave loading. It is of course possible that, when one examines the actual cash amount that each employee was paid as the salary component of his or her BCR each month, some employees may have received less than what they were owed under the Award. However, that case was not put by the employees. It is not open to this Court, on the material before it, to make such a finding. This may be an example of a pragmatic forensic choice made by the employees in pursuing a global approach to this litigation, to which I referred at [57] above.

[111]

Woolworths advanced some other submissions on this topic. I reject each of them. First, as I have indicated already I do not accept that the secondary materials about s 323(1) show that the reference to payment 'in full' in s 323(1)(a) was directed to preventing payments in kind. Those materials show that this was the purpose of s 323(1)(b) not s 323(1)(a).
Secondly, I do not agree that the decision in Coote v Mainline Access Pty Ltd (No 3) [2019] FCCA 383; 344 FLR 1 at [42] carries the implication that Woolworths suggests at [366] of its submissions.
Thirdly, although as noted above s 323(1) regulates how pre-existing monetary obligations are to be discharged, it probably does not follow, as Woolworths submits, that an underpayment by an employer cannot constitute a contravention of s 323(1). However, it is not necessary to determine the answer to this question since the present issue is not whether Woolworths has contravened s 323(1).
Fourthly, Woolworths makes a more substantial point when it submits that the terms of the Award recognise that additional payments under the Award may become due on the occurrence of events which are outside of a pay period. For example, cll 28.3 to 28.5 make provision for particular roster arrangements to be implemented in each shop including as to the working of 19 days in each four week cycle. An employee may be entitled to overtime when required to work outside those roster conditions: cl 29.2. The argument then is that it cannot be known in advance when the entitlement to overtime accrues. Since that cannot be known it cannot be the case that Award entitlements must be paid in a particular pay period since the pay period in which the entitlement accrues is itself not known. However, I do not consider that this is a problem. At some point the entitlement accrues. No obligation to pay the entitlement exists before it has accrued and I do not see why the obligation to pay the entitlement would not arise in the pay period in which it accrues. Put another way, difficulty in identifying when particular entitlements accrue is not a reason for not construing the payment obligations under the Award the way I would. It is, rather, the familiar problem of determining when a given entitlement accrues.
Fifthly, Woolworths makes an allied submission that there are some award entitlements which only accrue on an annual basis. An obvious one is the payment of an annual leave loading. However, I do not see that there is a problem here either. Woolworths is obliged to pay a loading of 17.5% on annual leave which has accrued and which is taken: cl 32.3(a). The loading is only payable 'during a period of annual leave'. Consequently, I do not see that this is an example of an annual entitlement which accrues at a different time to a payment period. The obligation to pay only arises in those pay periods where the employee is taking annual leave.

[116]

In relation to two of the Salaried Employees, it appears that there was no written contract. Issue 73A involves Coles' contention that a term was implied into these two contracts of employment along the same lines as the clauses I have just outlined above. Such a term is not so obvious that it goes without saying and on that account alone would not be implied: BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266. Coles' submissions to the contrary are rejected. The FWO submitted that absent such an implied term the payments of salary which were made by Coles in the discharge of its contractual obligations to pay a salary under these unwritten agreements could not discharge its obligations under the Award. However, it is not necessary that there be an attribution clause, whether express or implied, in order that a payment made under a contractual obligation simultaneously discharge an award obligation. So much is clear from Wardman where most of the contracts under consideration did not contain an express attribution clause but it was nevertheless held that the monthly payments of salary under the contract were sufficiently correlated with the award obligation to pay salary or wages as to satisfy that obligation: [44] per Bromberg J, [162] per Wheelahan J.
Rather, a touchstone commonly deployed for determining whether a payment under a contractual obligation will simultaneously discharge an award obligation (absent an express attribution clause like that in FWO v Woolworths) is whether there is a coincidence of purpose or at least a close correlation between the nature of the two obligations: ANZ v FSUA at [47], [51]-[52] per Black CJ, Wilcox and von Doussa JJ; Linkhill at [98] per North and Bromberg JJ; Wardman at [131] per Wheelahan J. There is some difficulty in answering that question where the contractual obligation is, as here, unwritten. Nonetheless I would conclude that there is a close correlation (as in Wardman) between the payments of salary by Coles and Coles' obligation under the Award to pay the minimum wages on the working of ordinary hours. Thus, the payment of the salaries discharged the minimum wages due under the Award. In the absence of any evidence from Coles as to what it intended by those payments, I am unable to see how they can plausibly be seen as being connected to any of Coles' other obligations under the Award.
Returning to the five exemplar clauses, I accept that as in Wardman each of these clauses is drafted in such a way as to capture the relevant obligations that Coles incurred under the Award to make payments. For the reasons I have given in FWO v Woolworths I do not accept that it is possible to discharge Coles' obligation to pay the entitlements falling due under the Award by anything other than an act of payment (rather than, for example, the existence of an accounting abstraction such as a pool over a six month period). As I have explained above, I accept that in an employment context a properly drafted set-off clause may provide that payment of a contractual obligation in a pay period may discharge a payment obligation arising under an industrial instrument in the same pay period. When this occurs a single payment discharges the two distinct monetary obligations. However, the obligations arising under the Award can only be discharged by a payment and that necessitates that the payment happen in the same pay period.
In this case, Coles has approached the calculation of its employees' entitlements under the Award on the basis that the five different clauses could have the result of discharging its obligations to make payments under the Award. Whilst I would accept that the clauses may have this effect within a pay period, they cannot have such an effect where the payment sought to be set off falls in a different pay period. Coles drew my attention to a series of decisions in which the possibility that set-off outside pay periods might not be available was countenanced: Ray v Radano at 478 per Sheldon J; Lynch v Buckley Sawmills at 509 per Keely J; Givoni at [35] per Goldberg J; James Turner Roofing at [21] and [45] per Anderson J. It also drew my attention to two cases where an approach appears to have been taken that set-off outside a pay period was possible: TransAdelaide v Leddy (No 2) (1998) 71 SASR 413 ('TransAdelaide') at 432-433 per Doyle CJ (with whom Lander J agreed at 433) and Transpetrol at [114]-[117] per Rares J. In none of these decisions was the argument put that award entitlements can be discharged by something which is not a payment in the relevant payment period. I thus do not think that these cases throw any real light on the present issue one way or the other.
In Woolworths' case it was possible to reinterpret the clause so as to avoid conflict with s 323(1). I see no reason why a similar approach cannot be taken here, by reading the references to 'your cash salary' (in the first and second clause), 'your TFC' (in the third clause), 'your total TFC' (in the fourth clause) and 'your salary' (in the fifth clause) to be preceded by 'payment of'. This has the effect, as in Woolworths' case, of tying the set-off clauses to Coles' payment period so as to give the clause a lawful operation as an attribution clause.
By contrast to the clause in FWO v Woolworths, each of the five clauses relied upon by Coles purports expressly to satisfy 'all' entitlements (and, in the case of the third and fourth clauses, to satisfy such entitlements 'in full'). This might be taken to evidence an intention that the clause should only operate if it can wholly satisfy all award entitlements. If the clauses were to fail on this basis, the principles stated above in respect of the unwritten contracts would apply with the result that Coles' salary payments operated only to discharge the minimum wages due under the Award. It is unnecessary to decide this issue, however, because the FWO submitted that the contractual payments by Coles and Woolworths 'are not to be discarded in whole' and can be accounted for in part discharge of its Award obligations.
I therefore find that as in FWO v Woolworths the set-off clauses in FWO v Coles lawfully operate within a payment period. Each salary payment will discharge an equal amount of any obligations falling due in that payment period under the Award.

[123]

Issue 1

Do the record-keeping obligations in s 535(1) of the FW Act and regs 3.33 and 3.34 of the FW Regulations apply to circumstances where a Salaried Employee is paid an annual salary on an 'all-inclusive basis', or an 'all inclusive salary'?

Issue 2

(a). Is the effect of a contractual set off clause allowing payment of an annual salary on an all inclusive basis that a Salaried Employee is not 'entitled' to be paid any loading, penalty rate, any other monetary allowance or separately identifiable entitlement for the purpose of reg 3.33, meaning that no record is required to be kept under reg 3.33 for that Salaried Employee?

(b) Does a contractual set off clause allowing payment of an annual salary on an all-inclusive basis mean that no penalty rate or loading (however described) 'must be paid' for overtime hours actually worked by the Salaried Employee, meaning no record is required to be kept under reg 3.34 for that Salaried Employee (thus excluding the operation of that regulation)?

Issue 3

If the Employer was required under regs 3.33 or 3.34 to keep a record and failed to do so, does s 557C of the FW Act mean that the employer then bears the burden of disproving an allegation that an employee is entitled to payment for an entitlement to which a failure to keep the record applied?

Issue 4

Does s 557C apply only to each particular allegation in respect of which a failure to make and keep a record is proven?

If yes, then:

(a) was Coles required to make and keep a record in relation to the particular matter alleged in relation to the particular employee?

(b) did Coles fail to make and keep a record in relation to that particular matter in relation to the particular employee?

Issue 5

(a) Did the employer have a reasonable excuse within the meaning of s 557C(2) for failing to comply with s 557C(1)(b), such that s 557C(1) does not apply?

(b) If yes to (a), for what period did the reasonable excuse apply?

Issue 6

(a) If reg 3.34 does apply to the Salaried Employees, has the employer satisfied its obligations to keep a record, which specifies:

[132]

Woolworths submits that it has not breached reg 3.33(3) (and hence s 535(1)). It made two points at [733]. First, to conclude that reg 3.33(3) applied would be to ignore the all-inclusive nature of the annual salaries which the Calculation Employees were paid. Secondly, to conclude that reg 3.33(3) was breached would involve an assumption that reg 3.33(3) requires the recording of the entitlements it specifies notwithstanding that such entitlements were not separately stipulated in the employees' contracts or paid to those employees.
I do not accept the first submission. The requirement in reg 3.33(3) to record certain details is enlivened by the employee's entitlement; that is, where the employee is entitled to be paid one of the entitlements in paragraphs (a) to (e) of reg 3.33(3) the record must have the required details. The form of the payment, such as it being 'all inclusive', does not alter that requirement. Additionally, Woolworths adopted at T1273.29 Coles' submission, which is that the set-off clause in the employment contracts operates so that an employee is not 'entitled to be paid' any loading, penalty rate or other monetary allowance and reg 3.33(3) is accordingly not enlivened.
I reject that submission. Although I have rejected Woolworths' contentions about the operation of the set-off clause in the contracts of employment, there can be no escaping that the endpoint of its submissions is that its obligation to pay the employees their remuneration in full each pay period was, in fact, discharged successfully by the set-off clause. Woolworths does not submit that the effect of the set-off clause is to prevent its obligation to pay amounts under the Award from arising in the first place. Rather, its submission is that its obligation to pay has been discharged by the operation of the set-off clause. Although I do not agree that Woolworths' set-off clause is, in fact, effective to discharge its obligation to make payments under the Award (other than in the same pay period) this does not matter for present purposes. What matters instead is that Woolworths' obligation to pay is an admitted feature of the landscape which the set-off clause takes as its point of departure. The converse of its obligation to pay is, of course, the employee's entitlement to be paid which is the concept which is the express subject matter of reg 3.33(3). It follows that even if Woolworths' set-off clauses were wholly effective (which they are not), they could not have the effect of abnegating Woolworths' obligations under reg 3.33(3). Since it is enlivened, the record required by reg 3.33(3) therefore needs to set out the details of the employee's entitlement to be paid any loading, penalty rate or other monetary allowance.
Woolworths' second submission was that reg 3.33(3) does not require the recording of the entitlements it specifies if such entitlements are (a) not separately stipulated in the employees' contracts or (b) not paid to those employees. As to (a), in effect, this is the same as the first submission. It is not to the point whether the contracts of employment do or do not make stipulation for the payment of loadings, penalty rates or other monetary allowances (of the kind referred to in reg 3.33(3)). If it matters (which it does not), the obligation to pay these sums, at least in this case, derives from the Award. What enlivens the obligation to keep the records referred to in reg 3.33(3) is not some term in a contract but rather the satisfaction of the major premise of the provision. The major premise is that an employee is entitled to be paid a loading, penalty rate or other monetary allowance. The satisfaction of the major premise does not depend on the origin of the employee's entitlement to be paid or correlatively the origin of the employer's obligation to pay. Rather it depends only on its own existence.
As to (b), this submission exposes the difficulty with Woolworths' submissions on its set-off clause. Of course, what those submissions seek to show that is that its obligations to pay the entitlements under the Award were met (i.e. paid) by the operation of the set-off clause. Submission (b) now seeks to say that the employees were not in fact paid their entitlements at all. I do not accept that it is open to Woolworths coherently to suggest that it paid the entitlements for the purposes of its set-off clause but did not pay them for the purposes of reg 3.33(3). Even leaving aside coherence difficulties, it would appear that Woolworths' submission in (b) reduces to no more than the proposition that if an employer does not pay an employee a loading, penalty rate or other monetary allowance which is otherwise due then reg 3.33(3) does not require that a record be kept of that failure. Such a construction would relieve an employer from having to keep records of overtime and other entitlements by the simple expedient of not keeping them. Whilst the meaning of Commonwealth legislation is always to be approached with some diffidence, I am confident that this is not what reg 3.33(3) means.
To rescue the submission from the difficult outcome that reg 3.33(3) does not require those who do not keep records to keep records, one might charitably read the submission as one which instead contends that the effect of the set-off clause is to remove Woolworths' obligation to pay the loadings, penalty rates or other monetary allowances and hence also the employee's entitlement to be paid those sums. Quite apart from being inconsistent with its submissions on set-off, however, this is really the same as its first argument above. Thus even if one can re-adjust submission (b) to save it from this problem, it must still be rejected.
Woolworths also submitted at [734] that a reading of reg 3.33(3) which required it to maintain details of an employee's entitlement to be paid loadings, overtime or other monetary allowances produced illogical outcomes. Here the submission was that an employer would not be able to comply with the record-keeping requirements of the Act where there was an annualised salary arrangement. This was because the word 'details' in reg 3.33(3) assumed that the payment in question was capable of separate and distinct identification. This was said not to be true in the case of annualised salaries. I reject this submission. There is no difficulty in identifying the payments which Woolworths must make to its employees under the Award. Woolworths is entitled to take advantage in any single payment period of the amount it has paid over the minimum wage as an initial set-off against its obligations under the Award in the same pay period. If the amount due under the Award exceeds that amount then it is bound by the terms of the Award to pay the balance which is due. However, I can discern no reason why there can be any difficulty recording the information necessary to determine these matters.
I therefore conclude that Woolworths failed in the case of the Calculation Employees to keep the records referred to in reg 3.33(3). For completeness, I would also reject Woolworths' more general point that overtime records did not practically need to be kept for employees on annual salaries. Here the argument was that the annual salaries included an element for Award entitlements. If one accepts that in every case this element exceeded Woolworths' obligations under the Award then I might be disposed to see the force of the observation. However, leaving aside all other objections (such as the limited effect of the set-off clause), the argument fails where the employees work more than what the additional element covers. Woolworths' more general rhetorical point fails to deal with this or to explain how, in that situation, entitlements are to be determined in the absence of records. As I now explain, Woolworths' clocking records do not constitute records for the purposes of reg 3.34. I therefore do not accept Dr Higgins' submission at T1271.40-46.

[133]

Regulation 3.34 requires Woolworths to keep a record that specifies the number of overtime hours worked by an employee during each day or when the employee started and ceased working overtime hours. There is no doubt that Woolworths did not keep a record for each employee which literally specified this information. Woolworths' answer to this was that it did keep these records because the information could be deduced from: (a) its Published Kronos Rosters (being rosters in the Kronos System which were printed out and displayed in a common area) and (b) the clocking data for its employees. For present purposes it may be assumed that it is in fact possible to deduce the information required to be recorded for the purposes of reg 3.34(a) and (b). Making that assumption, those two sets of data cannot constitute a record of the information required by reg 3.34. Such a record must be 'in a form that is readily accessible to an inspector': reg 3.31(1)(b). It must also be capable of being copied and made available to an employee or former employee for inspection upon request: reg 3.42(1). I therefore do not accept that the two data sets can constitute records of the information required by reg 3.34 unless the process of accessing the two data sets and interrogating them to deduce the information referred to in reg 3.34 can be described as one that is 'ready' (i.e. 'readily accessible to an inspector') and 'available' (i.e. 'available for inspection' by a requesting employee). I do not accept that this process can be described in that way. Hence, I do not accept that the Published Kronos Rosters together with the clocking data constitute records for the purposes of reg 3.34.
Woolworths also rehearsed its submissions as to why the effect of annualised salaries and its set-off clause entailed that it had no obligations under reg 3.34. I have already explained why I reject that cluster of submissions for the purposes of reg 3.33(3). I reject it for largely the same reasons in the case of reg 3.34.

[134]

Here the issues are similar to but not identical with those which arise in FWO v Woolworths. Coles makes five submissions. First, it submits that it had no obligation under s 535 of the FW Act to keep the records referred to in regs 3.33(3) and 3.34 in the case of the employees on annualised salaries with a set-off clause. I reject that submission for the reasons I have given in FWO v Woolworths.
Secondly, Coles submits that it was not required by reg 3.33(3) or reg 3.34 to keep records of the ordinary hours worked by an employee. An example of this would be cl 29.4(a) of the Award which provides for an additional 25% loading for work done during ordinary hours after 6 pm on a weekday (noting that, as explained later in these reasons, between 6 pm and 9 pm on a weekday falls within the span of ordinary hours under cl 27.2). I agree with Coles' submission that reg 3.34 does not apply to the payment of a such a loading because it is not paid for overtime hours actually worked by an employee. However, this conclusion has no impact on the operation of reg 3.33(3) which continues to apply in such a situation. Coles' submission here is not that reg 3.33(3) does not apply but rather that it does not require a record of the ordinary hours worked which give rise to a penalty rate or loading. In particular, Coles says that the requirement in reg 3.33(3) to 'set out details of' the penalty rate or loading to be paid is directed only at the amount of that payment.
I disagree with this construction. If the 'details' referred to in reg 3.33(3) refer only to the amount of the payment then the word is redundant and the stipulation in the provision might as well read 'the record must set out the payment, bonus, loading, rate, allowance or entitlement'. Consequently, the word 'details' must be given some work to do: see Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [71] per McHugh, Gummow, Kirby and Hayne JJ. As a matter of ordinary English, 'detail' means 'an item or particular' (Macquarie Dictionary (online) definition 1) or 'a detailed narrative or description of particulars' (Oxford English Dictionary (2nd ed, Clarendon Press, 1989) definition 2). I would infer that the details required by reg 3.33(3) are those which are sufficiently particular to allow an employee to understand the basis upon which the entitlements to which it refers have been arrived at. Thus, if an employee is entitled to be paid at a penalty rate the record must contain sufficient information for the employee to understand why that penalty rate is being paid and how the payment has been calculated. Where an entitlement arises because of the ordinary hours that have been worked (such as in the case of cl 29.4(a)) reg 3.33(3) requires the recording of the ordinary hours, the identification of why the penalty under cl 29.4(a) is payable and the disclosure of sufficient information to the employee to understand how the figure has been arrived at.
Thirdly, Coles submits that two allowances it was obliged to pay were premised on the working of ordinary hours. These allowances were a special clothing allowance and an allowance related to Broken Hill. Coles' submissions did not identify the provisions of the Award which provided for these allowances. However, the relevant clauses are cl 20.2 and 20.13:

[158]

A fifth issue concerns whether s 557C is enlivened where a record is kept but is incomplete. Woolworths submits that s 557C is only enlivened where no record is kept at all and that it is not enlivened by incomplete or inadvertently inaccurate records.
In this case, for example, Woolworths' records are incomplete. Its records under reg 3.33 include the matters set out in reg 3.33(1)(a)-(c) and the actual payments referred to in reg 3.33(3) but they do not include how those payments were calculated and hence fail to set out the details required by reg 3.33.
If Woolworths' submission is correct, then s 557C does not apply to these records with the immediate consequence that the burden of disproving the allegations is not reversed in relation to the details which it failed to record. The basis for this submission was s 535(1) which requires an employer to keep for 7 years employee records 'of the kind prescribed by the regulations in relation to each of its employees'. This was said to direct attention only to the question of whether the record has been kept and not to whether it was complete or not.
This overlooks s 535(2) which requires the records referred to in s 535(1) to 'include any information prescribed by the regulations'. I therefore reject the submission. I also reject Woolworths' submission that it would be anomalous if the onus of proof was reversed for incomplete records but not where false or misleading records are kept. Here the point seemed to be that whilst s 535(1) required employee records to be kept, s 535(4) provided that 'An employer must not make or keep a record for the purposes of this section that the employer knows is false or misleading'. As I understood the submission (which was not altogether clear), such a false record could not be a record for the purposes of s 535(1) and, as such, s 557C would not apply to it.
I reject this submission for two reasons (if I have understood it correctly). First, I do not accept that a false record for the purposes of s 535(4) is not a record for the purposes of 535(1). Secondly, even if it was, this would entail that s 557C did not apply to the false record but, by hypothesis, the employer would then have failed to have kept any records for the purposes of s 535(1); thus, s 557C would be engaged in relation to the non-fraudulent records which it failed to keep.
Woolworths also submitted in the alternative that where a record was incomplete, it could still be relied upon for the matters which it did record. On this view, the reversal of the burden of proof would only apply to the matter which had been omitted from it. I accept this submission. Section 557C puts the burden on the employer to disprove the allegation referred to in s 557C(1). That allegation is in relation to 'a matter' and the matter is the thing in relation to which the employer has failed to keep a record. The provision is clearly capable of bearing this interpretation and I can discern no sensible reason why the burden should be reversed insofar as the employer has kept a record of the relevant matter: cf. Gallagher v AAG Labour Services Pty Ltd [2020] FCA 1753 at [19]. The FWO submitted that the contrary position was supported by a statement made by Colvin J in Ghimire v Karriview Management Pty Ltd (No 2) [2019] FCA 1627; 290 IR 331 ('Ghimire') at [16]. I do not read that passage as supporting the FWO's submission.

[160]

In the FWO's case against Woolworths, the parties have agreed the actual starting and finishing times of the Calculation Employees with the exception of Ms Violet Brown. There is also agreement about their level of employment under the Award. The dispute between Woolworths and the FWO is, in fact, only about the construction of the provisions of the Award and their application to Calculation Employees. Whilst this may underscore that it was very odd that the parties sought to cross-examine those of the Calculation Employees who were called (over several weeks), it does show that s 557C has no work to do in Woolworths' case. Leaving aside the position of Ms Violet Brown, there are no factual allegations made by the FWO which remain for me to resolve. Put another way, the FWO and Woolworths' agreement on the facts means that howsoever s 557C operates in Woolworths' case, the burden has been discharged by the agreed facts.
I return to the position of Ms Violet Brown in Part F.1.
Turning then to the position of Coles, it adopted each of Woolworths submissions. The outcome for Coles' under those submissions differs from the outcome for Woolworths in two respects. First, because the parties in the Coles' litigation appear to have been unable to reach agreement on the starting and finishing times for the Calculation Employees, s 557C remains relevant to Coles (whereas it is only relevant to Woolworths in relation to Ms Violet Brown). Secondly, for the same reason, it is necessary in the event that I am wrong that a want of particularity does not result in the non-application of s 557C, to determine whether the FWO's pleading against Coles lacks sufficient particularity.
The FWO's Further Amended Statement of Claim is 57 pages in length. In relation to the Calculation Employees the pleading makes a large number of allegations that the Award was contravened which are collected at Sections E1 to E18. There are allegations at E19 too but, as will be seen, these have no relevance. The allegations all have a similar basic structure. The allegations at E4, which concerns the public holiday penalty entitlement, may serve as an exemplar. The allegations about the Calculation Employees appear at s28:

[169]

The Sample Salaried Employees are a subset of the Salaried Employees. In my view the level of particularisation which the FWO has supplied Coles is sufficient. Paragraph 106 alleges a failure to keep overtime records, s107 alleges that this infringed s 535 and the pleading of s 557C at s108 informs Coles that the FWO will rely on that failure in relation to the matters in Parts E, F and G. To continue with the example of Sample Salaried Employee ID: 220369, Coles is informed that the FWO alleges that Coles failed to pay $139.34 in public holiday entitlements to Sample Salaried Employee ID: 220369 across the Assessment Period. Section 557C therefore requires Coles to disprove that fact. It must show that across the Assessment Period it did not fail to pay Sample Salaried Employee ID: 220369 $139.34 in any public holiday entitlement which was due. In practical terms, Coles will be required to prove what work Sample Salaried Employee ID: 220369 did and how much it paid her. It is thus clear what Coles must disprove and how it will have to do it. This appears to me to be precisely the result which s 557C was intended to bring about. That Coles finds itself in an invidious position in this regard is not to be conflated with a want of particularity on the FWO's part.
Finally, in its oral submissions, Coles submitted that it had discharged its evidentiary burden under s 557C by tendering its clocking and rostering data. This is separate from the submission that the clocking and rostering data were records for the purposes of reg 3.33 and reg 3.34. It might be sufficient to reject this submission to observe that I have rejected the submission that s 557C operates to reverse the evidentiary burden. However, that still leaves for consideration the actual question of whether the clocking and rostering data in themselves mean that Coles has discharged its burden of disproving the FWO's allegations. The parties' submissions do not appear to address this issue and I assume that they intended that my dealing with their other submissions would suffice for them to determine the outcome on this point. I discuss what can be gleaned from Coles' incomplete roster and clocking records later in these reasons.

[219]

The words used in the clauses are 'agreement', 'agree', 'mutual agreement' and 'specific agreement'. These words bear their ordinary meaning. As a matter of ordinary language there will be an agreement (or the parties will agree) where the objective circumstances indicate that the employer and the employee have reached a consensus ad idem on the subject matter of each clause; that is to say, there should be a meeting of the minds. This is the approach taken to contractual formation at common law. Whilst the agreements referred to in the Award need not be supported by consideration I do not discern any reason why an objective approach to the question of agreement ought not to be taken and why that objective inquiry should not be into whether there has been a meeting of minds.
Each of the clauses set out above involves an employee foregoing a right or entitlement which the Award confers upon them. For an employee to agree to forego that right or entitlement the objective circumstances must indicate that the employee was aware that the right or entitlement existed. To take the example of cl 31.2, the fact that the employee agrees to a roster with a 10 hour break between shifts does not provide objective evidence that the employee agreed to forego his or her entitlement to a break between shifts of 12 hours. For such an agreement to be demonstrated it would be necessary for the objective circumstances to show that the employee and employer were aware that the employee had an entitlement and was agreeing to forego it. Mere evidence that employees agreed to work shifts which had breaks of less than 12 hours cannot be sufficient. That conclusion follows from what I have just said insofar as such evidence would not disclose any awareness of the entitlement. It is also reinforced by the fact that considering such evidence to be sufficient would render the stipulation of '12 hours' in cl 31.2(a) otiose. Since in modern times employees only work when they consent to do so, their working of shifts with a break between them of more than 10 but less than 12 hours would in every case constitute an agreement for the purposes of cl 31.2(c). That would leave no circumstances in which the '12 hour' stipulation ever meaningfully applied.

[221]

The question which now arises in each case is whether it is the FWO which must disprove the existence of the various agreements as part of its case or whether it is instead Woolworths and Coles who must prove as part of their defence that an agreement has been reached.
I will begin with the FWO's allegations against Woolworths in relation to its failure to afford employees the benefit of a 12 hour break between shifts to which they are entitled by cl 31.2.
On the pleadings, the issue arises in this way. First, the FWO alleges at s33 of its Further Amended Statement of Claim that the annual salary paid to the Salaried Employees was not sufficient to pay them the double rate of pay referred to in cl 31.2(b) where they recommenced work without having had a 12 hour break. Next, at s34 the FWO identifies which of the Calculation Employees were underpaid in this way and articulates the amount of the underpayments. Then, at s33(c) of its Further Amended Defence Woolworths alleges that the FWO has failed to plead that the Salaried Employees had not agreed to reduce their break between shifts under cl 31.2(c). At s9(a) of the FWO's Reply, it is then alleged that it is Woolworths which bears the onus of proving that such agreements were reached.
The FWO has the legal burden of establishing the contraventions of the Act which it alleges. The FWO alleges that Woolworths has contravened s 45 of the Act by failing to comply with cl 31.2 of the Award: ss33, 34 and 88 of the Further Amended Statement of Claim. The allegation is one of underpayment under cl 31.2(b). Section 45 provides that '[a] person must not contravene a term of a modern award'. The term of the Award which is alleged to have been contravened is cl 31.2(b), that is to say, the provision imposing on Woolworths the obligation to pay the penalty rate. There are two issues between the parties about cl 31.2(b). The first is how much the clause requires an employer to pay when it is engaged (i.e., which rate is doubled by the expression 'double the rate'). The second, which now arises, is whether in order to demonstrate that there has been an underpayment under cl 31.2(b) the FWO must prove that cl 31.2(c) has not been engaged (i.e. that it has not been agreed that the 12 hour period in cl 31.2(a) should be reduced to some other period of time (being not less than 10 hours)) or whether, instead, this is a matter for Woolworths affirmatively to establish (i.e. that is has been agreed that the 12 hour period in cl 31.2(a) should be reduced).
Clause 31.2(b) establishes a norm of conduct breach of which constitutes a contravention of s 45 of the Act. The FWO's allegation that s 45 has been contravened therefore devolves to an allegation that cl 31.2(b) has been contravened. The capacity of the parties under cl 31.2(c) to reduce the break between shifts from 12 hours to not less than 10 hours is, therefore, a proviso to cl 31.2(b). Why? Whilst cl 31.2(b) is expressed to create an obligation to pay by reference to the 12 hour period referred to in cl 31.2(a), the evident effect of cl 31.2(c) is to change that 12 hour period to some lesser period being not less than 10 hours if the parties so agree.
If the proviso in cl 31.2(c) is in the nature of a justification or excuse explaining why what would otherwise be an underpayment in contravention of cl 31.2(b) is not, in fact, such a contravention then the burden of demonstrating that it has been enlivened will lie upon Woolworths. If, on the other hand, cl 31.2(c) forms part of the total statement of a contravention of cl 31.2(b) then the burden of proof will rest upon the FWO. This is a question of construction of cl 31.2 to be resolved as a matter of substance rather than form: Avel Pty Ltd v Multicoin Amusements Pty Ltd [1990] HCA 58; 171 CLR 88 at 119 per McHugh J; Vines v Djordjevitch [1955] HCA 19; 91 CLR 512 at 519 per Dixon CJ, McTiernan, Webb, Fullagar and Kitto JJ; Waters v Mercedes Holdings Pty Ltd [2012] FCAFC 80; 203 FCR 218 at [16]- [18] per Jacobson, Flick and Foster JJ.
Clause 31.2(c) is not part of the total statement of a contravention of cl 31.2(b) but is instead in the nature of a justification or excuse. An employer who is alleged to have contravened cl 31.2(b) because it has failed to pay the prescribed penalty rate to an employee who had a break between shifts of less than 12 hours, may plead in defence to that allegation the fact that the employee and it agreed to a shorter break under cl 31.2(c). As such, it is Woolworths which bears as part of its defence the affirmative burden of proving the existence of the kinds of agreement referred to in cl 31.2(c). Thus, the FWO does not bear the burden of proving, on its case that s 45 was contravened, that there were no agreements under cl 31.2(c).
The mechanics of the analysis are the same for the agreements referred to in cll 29.3(a), 28.14(c), 29.4(f)(ii) and, unique to Coles, cll 28.5, 28.11 and 28.13. In each case, it is Woolworths and Coles who must prove than an agreement was reached.
To address a particular submission made by Woolworths in respect of cl 29.4(f)(ii), Woolworths submitted that:

[237]

That 'ordinary hours' are not 'trading hours' is emphasised by cl 27.1, which makes clear that the clause is not intended to alter the trading hours of an employer as determined under relevant State laws. As it happens, it is quite plain that cl 27.2(a) has no impact on trading hours at all as a matter of ordinary language. But the effect of cl 27.1 is that if there were any ambiguity about this, it would be resolved in favour of a conclusion that ordinary hours have nothing to with trading hours - at least, insofar as cl 27.2(a) is concerned.
If cl 27.2(a) were all that the Award said on the topic of ordinary hours, then the topics of ordinary hours and trading hours would slip past each other like ships in the night. However, cl 27.2(a) provides that its setting of ordinary hours (in principle disconnected from trading hours) is subject to cl 27.2(b). Clause 27.2(b) touches on the topic of trading hours both implicitly and explicitly. It does so implicitly in the case of the newsagencies and video shops referred to in cll 27.2(b)(i) and (ii). Thus a newsagent may have a commencement time of 5 am for ordinary hours and a video shop may have a finishing time for ordinary hours of 12 am. Both clauses assume that the commencement and finishing times for ordinary hours to which they refer are, in fact, actual commencement or finishing times.
This is quite contrary to the structure of cl 27.2(a) where there is no link between ordinary hours and trading hours. It has particular significance to the operation of cl 27.1. Its evident intent is to head off any conflict between the Award and a State law regulating trading hours by ensuring that cl 27 does not impact on trading hours prescribed by State laws. Clauses 27.2(b)(i) and (ii) present just such a risk. In principle, the power conferred on an employer to fix ordinary hours by reference to actual commencement and finishing times could directly conflict with a State law which prohibited such a commencement or finishing time. The effect of cl 27.1 is to require, if possible, that cl 27.2(b)(i) and (ii) not be read as speaking on the topic of actual trading hours.
It is not necessary to determine in this case what the outcome of reconciling cl 27.1 with cll 27.2(b)(i) and (ii) might be, but I draw attention to it to underscore why, for the purposes of cl 27, it is very important to keep at the forefront of one's mind the distinction between trading hours and ordinary hours. One is about when an employer opens and closes its business to the public; the other is a notional set of times used as a benchmark to assess overtime under cl 29.2(a).
It is with that distinction in mind that one turns to the terms of cl 27.2(b)(iii). What is striking about cl 27.2(b)(iii) is that it makes the ordinary hours a function of the trading hours of the retailer. In doing so, it does not affect the trading hours themselves. Thus the potential difficulty which cl 27.2(b)(i) and (ii) have in relation to State laws which regulate trading hours does not arise. It does, however, link the two concepts in a way which is foreign to cl 27.2(a).
I have described cl 27.2(b)(iii) as making ordinary hours a function of a retailer's trading hours. The word function conceals the full operation of the clause. The dispute between the parties concerns the identification of the function which relates the ordinary hours to a retailer's trading hours.
With those introductory remarks, the parties are divided on two legal issues.
The first is whether the trading hours referred to in cl 27.2(b)(iii) are the trading hours which apply at particular stores or whether, as Woolworths submits, one must determine the trading hours of the 'retailer' referred to in the clause. The parties saw this as a dispute about the meaning of the word 'retailer', with the FWO contending that it means a particular store and Woolworths saying that it means the entire organisation. As I will explain, while I agree with Woolworths that retailer means the entire organisation, I think both parties have missed the real issue which is the meaning of 'trading hours' and whether a retailer may have more than one set of trading hours if it operates more than one store.
The second legal issue concerns the words 'all days'. Woolworths submits, and the FWO denies, that once the clause is enlivened for at least one day of the week, then the effect of the phrase 'finishing time for ordinary hours on all days of the week will be 11.00 pm' is to declare the finishing time for ordinary hours to be 11 pm for all days of the week. The FWO, by contrast, says that 'all days' means 'all such days'.
The manner in which these two debates are framed in the pleadings is somewhat confused. At s19 of the Further Amended Statement of Claim ('the FASOC') the FWO initially alleged that the extended hours applied at all stores at which the relevant employees worked apart from the Macarthur store which was initially alleged to close at 6 pm on Saturdays. The pleading extends to all of Woolworths' stores and to all of the 19,000 employees. For the purposes of these reasons, I will utilise the pleading only insofar as it relates to the five stores and 32 employees involved in the trial unless otherwise necessary.
In its defence, Woolworths said that the extended hours applied to all stores but contended that the Macarthur store closed at 9 pm on Saturdays. It also said that not only did the extended hours apply at all stores but that they applied on all days of the week.
Subsequently, the FWO amended s19 of the FASOC to allege that the Macarthur store closed at 9 pm on Saturdays which Woolworths then admitted. The FWO also alleged that the extended hours did not apply at the Macarthur store on any other day of the week. Woolworths denied this. In its reply the FWO then said at s8(b) that the Macarthur store closed at 6 pm on Sundays and it denied that the extended hours applied on all days of the week.
On the pleadings therefore the position is that:

[239]

In my view, this question is irrelevant. What enlivens cl 27.2(b)(iii) is particular 'trading hours'. Trading hours are the hours at which a retailer trades with the shopping public. Where a retailer conducts more than one store it is logically possible that it has more than one set of trading hours. In this case, for example, Woolworths has 1,076 stores across which there is very considerable variation in trading hours.
What cl 27.2(b)(iii) does is to determine a retailer's ordinary hours by reference to its trading hours. Since its trading hours may, and in this case do, fluctuate between different stores operated by a retailer, cl 27.2(b)(iii) will bring about different outcomes for a retailer depending on what its trading hours are at different stores. One store operated by a retailer may have a set of trading hours which enlivens the clause, another may not. Clause 27.2(b)(iii) will lead to one result in the former case and another in the latter.
On this view of cl 27.2(b)(iii) I would accept Woolworths' submission that the reference to a 'retailer' is a reference to the entity as a whole which is conducting the retail business. That submission is consistent with a decision of the Full Bench of the Fair Work Commission handed down after this trial, Application by the Australian Retailers Association; Variation on the Commission's own motion - General Retail Industry Award 2020 [2024] FWCFB 197 (the 'Span of Hours Decision'), on which the parties provided supplementary submissions. But I would reject the further assumption on which both Woolworths' submission and the Span of Hours Decision rest, that a retailer may only have a single set of trading hours. To the contrary, it is plain that where a retailer conducts more than one store, it is possible that the retailer's trading hours may vary between those stores.
Thus whilst I would reject the FWO's submission that the word 'retailer' means a shop, the fact that retailer means the entity conducting the retail business does not lead to the conclusion for which Woolworths contends, that the trading hours of individual stores is irrelevant. Once one admits that a retailer may conduct its trade at more than one store one necessarily admits of the possibility that it may have more than one set of trading hours.
Woolworths mounted a series of arguments as to why the clause should not be read as requiring an analysis of the trading hours of particular stores. Several of these arguments were put forward in response to the FWO's contention that 'retailer' meant 'shop'. Since I agree with Woolworths that 'retailer' means retailer, these arguments have no purchase against the proposition that a retailer with more than one store may have more than one set of trading hours. Thus it is not necessary to deal with Woolworths' submission that the ordinary meaning of 'retailer' is retailer (it is), or that at various points the Award uses the words 'retail store', 'retail establishment', 'shop' or 'employer' (it does, but this does not matter where I accept 'retailer' means retailer).
But Woolworths did make some other submissions which were designed to show that the clause should not be interpreted so as to focus on the position of particular stores. The first was that the trading hours of a retailer's stores might be subject to variation or ad hoc alteration. No doubt this is true. But I think one may proceed safely upon the assumption that a retailer knows what its own trading hours actually are.
In truth, perhaps what underlies Woolworths' submission is an anxiety about the administrative burden of calculating overtime under cl 29.2(a) by reference to different ordinary hours at different stores. But the source of that administrative burden should be identified. There is no administrative burden on a retailer who conducts business at just one store, because it will have just one set of opening hours. Likewise, I struggle to see great burden for a retailer with five stores. The true source of the burden arises from the fact that Woolworths conducts its retail business through 1,076 geographically disparate stores.
Even so, I think it is legitimate to take into account the fact that reading cl 27.2(b)(iii) as requiring an examination of the retailer's actual trading hours will create an administrative burden for large retailers. However, that is not the only interpretative factor involved.
Trending more strongly in the opposite direction are difficulties with Woolworths' submission that it has a single set of trading hours. The first difficulty is that I would read 'trading hours' as meaning actual trading hours. Instead of its actual trading hours (which vary widely between stores), Woolworths' construction necessarily entails the identification of a single set of trading hours. If that is correct it will, however, have the consequence that for those of its stores which do not have actual trading hours which are the same as this hypothetical and single set of trading hours, Woolworths' trading hours at those stores will not be the actual hours those stores trade. In my view, this seems an absurd result. Additionally, it is inconsistent with cl 27.1 which, by seeking to ensure that cl 27 does not trespass on State laws regulating trading hours, indicates clearly a preference for the idea that trading hours are something which happen in the real world.
The second difficulty is the absence of any suggested methodology to determine in the case of a multistore retailer what its single set of trading hours is where there is, in the real world, a range of trading hours at different stores. The methodological problem is both actual and legal. It is actual in Woolworths' case because of the state of the evidence.
Evidence was led about the opening times of the five stores from Ms Ella McInerney who is the People Director of Woolworths New Zealand Limited. At s106-107 of her affidavit dated 22 February 2023 she explained the process by which Woolworths recorded the current opening hours of all Woolworths stores in Australia in a spreadsheet. The spreadsheet reveals the following opening hours for each of the five stores (the last column indicates whether these were hours which enlivened cl 27.2(b)(iii)):

[240]

One may see in microcosm with just these five stores the problem that Woolworths confronts. It is the selection of some methodology by which one may ascertain from a list of varying trading hours a single set which may be said to represent them all.
If attention is expanded to take into account all 1,076 of Woolworths' stores, then recourse to Ms McInerney's spreadsheet shows a bewildering array of trading hours. At [444] of its closing submissions Woolworths argued that it was easily proven from Ms McInerney's spreadsheet that its trading hours 'extend[ed] beyond' 9 pm on Mondays to Fridays and beyond 6 pm on Saturdays and Sundays. But that statement involves a blurring of the unavoidably hard edges of this problem. On any view, cl 27.2(b)(iii) requires the identification of trading hours. Trading hours are opening and closing times. A closing time of 'beyond 9 pm' is not a closing time. Once one accepts, as I think one must, that the trading hours referred to in cl 27.2(b)(iii) are the hours at which the retailer opens and closes, Woolworths' task of identifying at just what single time its stores closed becomes much more difficult.
To illustrate the problem, Ms McInerney's spreadsheet shows that on weekdays there were a variety of closing times: 8 pm, 9 pm, 10 pm, 11 pm. Some stores never closed at all. In Western Australia, all of Woolworths' stores closed by 9 pm (no doubt because of particular laws applying in those States). It is unclear how one is to discern from such a cacophony what Woolworths' single set of trading hours actually would be.
What the submission did not say, but which it needed to say, was that most of its stores had a particular closing time. But instead of saying that, what it submitted was that its trading hours as a whole extended beyond 9 pm, which is not a closing time. If Woolworths had identified what it said its closing time was, which it did not, it would then have been necessary to weigh that submission against Ms McInerney's spreadsheet. Since, however, no closing time was nominated, this cannot be done.
Even if a particular closing time had been nominated as being the predominant, it would then have engendered a legitimate inquiry as to why a retailer's trading hours should be determined by reference to the closing time which mostly predominates. If one is seeking to identify the predominant closing time, ought not the stores be weighted in some way? It is not self-evident that a store with a small number of employees working in it should count as much as one with hundreds. Further, it is not obvious that such a weighting process should even be done by reference to employee numbers rather than, for example, by reference to turnover, profitability or takings.
This actual methodological vacuum in Woolworths' own case is linked to a more serious legal problem. This is that cl 27.2(b)(iii) contains no indication of any method by which a single set of trading hours might be determined. Thus the failure of Woolworths to identify its methodology is mirrored in the absence of such a methodology in the clause itself.
On the question of the methodology required by cl 27.2(b)(iii), one approaches this question agnostic as to the number of stores a retailer has. The clause must work equally well for a retailer with one store, three stores or 1,000 stores. If a retailer has but two stores with different trading hours it is obvious that neither predominates (and that is leaving out of account any problem about weighting, not a skerrick of which can be found in cl 27.2(b)(iii)). Thus, I do not think that a methodology of determining a retailer's closing times by reference to those which predominate can be what cl 27.2(b)(iii) requires, since that cannot work in a simple case of two stores.
Thus, whilst I accept that it is legitimate to take into account, in interpreting cl 27.2(b)(iii), that a reading concerned with actual trading hours is likely to impose an administrative burden on large retailers, reading it as permitting the identification of a single set of closing times for each retailer leaves a retailer with an insoluble inability to identify any stable means by which such a single set might be determined.
Woolworths also advanced a submission that its employees sometimes moved between stores. No doubt, this is true. However, I do not see that this gives rise to a problem. Ordinary hours are a function of trading hours, and trading hours are something which happen at the actual stores which the retailer operates. Inevitably, ordinary hours will differ between stores as their trading hours differ. This will mean that employees who move between stores will be in a situation where the calculation of their overtime will turn, sometimes, on which store they are working in. Accepting again that for large retailers this will be administratively burdensome, it is a function of the basic machinery of the clause which makes ordinary hours a function of trading hours. Adding it to the weighting exercise referred to in the preceding paragraph, it comes nowhere near overcoming the failure of the clause to indicate how a single closing time is to be calculated as entailed by Woolworths' approach.
Woolworths also sought to rely on the proposition that cl 27.2(b)(iii) was intended to reflect the fact that business needs are reflected in the trading hours of a business and should be a factor in establishing the limits of ordinary hours. I accept this submission. Clause 27.2(b)(iii) makes the ordinary hours a function of the retailer's trading hours. Further, the proposition is supported by the Full Bench of the Commission said in Re General Retail Award 2010 [2010] FWAFB 305; 192 IR 9 at [14]:

[249]

In FWO v Woolworths the identification of the stores in question permitted me to understand why the debate about extended ordinary hours mattered. In that case, there was a live dispute as to how the ordinary hours for the Macarthur store were to be determined. In this case, the parties did not initially identify why the determination of extended ordinary hours matters. Subsequently I asked the parties to identify an actual store to which Issues 52 and 53 were relevant. I was informed by Coles that the dispute was relevant to the Sandringham store at which one representative employee, Ms Vaia Konstandelis, worked. The Sandringham store's trading hours were 6 am to 9 pm daily such that extended ordinary hours were engaged on Saturdays and Sundays but not on weekdays.
For the reasons I have given above in FWO v Woolworths I agree with Coles that 'retailer' means 'retailer', but I conclude that the clause applies to the retailer's actual trading hours rather than to a single set of trading hours. For the reasons given in FWO v Woolworths I also conclude that 'all days' should be interpreted to mean 'all such days'.
There were some additional matters raised by Coles which were not raised by Woolworths. However, these do not persuade me that the clause should be approached other than on the basis of its actual trading hours which, in its case, vary significantly, or that 'all days' should not be interpreted as 'all such days'.
The first and best of these points is Coles' observation that by allowing cl 27.2(b)(iii) to operate on the actual trading hours of the stores at which it conducts its retail business one could have a situation where an employee working in one store at a particular time was paid overtime whilst another employee doing the same work but at a different store would not be.
I accept that the phenomenon described by Coles can arise. If Store A closes at 8 pm on Mondays to Fridays and 6 pm on the weekends then the ordinary hours will finish at 9 pm during the week and 6 pm on the weekends (cl 27.2(a)) since the extended hours in cl 27.2(b)(iii) are not enlivened. If an employee at Store A works back until 11 pm during the week stacking shelves they will be entitled to overtime between 10 pm and 11 pm since for that hour they will work past ordinary hours. (They will also be entitled to overtime for the period between 9 pm and 10 pm.)
But if Store B closes at 10 pm on Mondays to Fridays the effect of cl 27.2(b)(iii) will be that finishing time for ordinary hours will be 11 pm. If an employee at that store works between 10 pm and 11 pm stacking shelves then they will not be entitled to overtime since they are not working beyond ordinary hours. In both cases, the employees are doing the same work at the same time and in both cases the stores at which they are working are closed. But only the employee at Store A will be entitled to overtime.
There are two ways one may view this anomaly. From the perspective of the employees it may be said that it treats differently employees who are doing the same work at the same time and in the same circumstances. From the perspective of employers, on the other hand, the differential treatment of employees is an administrative burden. For both reasons, I accept Coles' submission that this is undesirable.
However, that undesirability must be weighed against the matter I flagged in the Woolworths reasons, which is the impossibility of discerning from cl 27.2(b)(iii) any means of determining what a single set of closing times for a multistore retailer would be. I accept that giving effect to Coles' submission would remove this anomaly. However, the price to be paid for it would be the inability of the Court to say how cl 27.2(b)(iii) determines in the case of multistore retailers what their single set of trading hours is.
Once one accepts that 'trading hours' means actual trading hours then the fact is that cl 27.2(b)(iii) makes the extended ordinary hours a function of a retailer's trading hours. Given that trading hours do fluctuate with the business needs of individual stores, it is inevitable that the anomaly arises.
The second matter separately raised by Coles met the point I have made here and in FWO v Woolworths that cl 27.2(b)(iii) does not identify how one is to determine a predominant set of closing times. The submission at [651] was in these terms:

[251]

I do not agree with this submission. How cl 27.2(b)(iii) operates does need to be determined in this proceeding. The Court must say what the clause means and then it must apply to the facts which are before it.
In fact, [651] in submitting that the methodology does not need to be determined contradicts itself. In the same paragraph Coles says that the evidence shows that a 'substantial number of stores within the Coles retail business operate with those extended trading hours'. That statement is premised on the proposition that the single set of trading hours is to be determined by reference to the trading hours of a substantial number of its stores.
There are two problems with this. First, I can see no basis for a substantial number test in cl 27.2(b)(iii). Secondly, the substantial number test cannot work. At least one obvious problem is that there could be two such sets of substantial numbers, for the substantiality of one number does not imply the insubstantiality of another. For example, all of the stores in Western Australia close at 9 pm on weekdays and so do not enliven cl 27.2(b)(iii). The number of stores involved in that State is 'substantial'. But it is equally obvious that a 'substantial number' of stores in New South Wales and Victoria do close at 11 pm. The evidence therefore sustains the conclusion that a substantial number of Coles' stores close at 11 pm during the week and that a substantial number of them close at 9 pm. The application of a substantial number test on the facts of Coles' own stores leads to at least two sets of closing times, not one.
The third matter raised by Coles was the decision of the Fair Work Commission in Application by Penelope Vickers to terminate the Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited Retail Agreement 2011 [2016] FWC 6350 at [221]- [226] which held that cl 27.2(b)(iii) required one to identify the trading hours of Coles as a whole. I do not agree with this conclusion.
Finally, Coles adopted Woolworths' submissions in FWO v Woolworths. I reject this aspect of Coles' submissions for the reasons given in FWO v Woolworths.

[266]

Again the focus of this is on the relationship between weekend loadings and shift working allowances rather than a more general statement that penalty clauses are not to be interpreted cumulatively.
Woolworths also relied upon the Commission's decision in Shop, Distributive and Allied Employees Association v Fantastic Furniture Pty Ltd (t/a Fantastic Furniture) [2020] FWCFB 3570 ('SDAEA v Fantastic Furniture') at [29]-[41]. This case was concerned with whether the Fantastic Furniture Enterprise Agreement 2019 should be approved. To answer that question, it was necessary to determine whether the terms of the agreement satisfied the Better Off Overall Test ('the BOOT'), i.e., whether looked at from an overall perspective the employees would be better off under the agreement than they were under the Award. The agreement contained a clause dealing with the Short Break Penalty. The agreement used the words '200% of the Base Rate of Pay' which is, of course, how Woolworths would interpret cl 31.2(b). The Deputy President who heard the matter at first instance had been concerned that the ambiguity in the clause (being the ambiguity whose existence I accept) might mean that the agreement failed the BOOT.
However, the learned Deputy President did not resolve the ambiguity. Instead, he extracted undertakings from Fantastic Furniture subject to which he considered that no employee would be worse off than they would have been under the Award: Application for approval of the Fantastic Furniture Enterprise Agreement 2019 [2020] FWCA 699 at [16]. On that basis he approved the agreement.
The Full Bench detected no error in this approach. It neither approved nor disapproved of any interpretation of cl 31.2(b) which is unsurprising since the Deputy President had sidestepped the question. Woolworths submitted that at [29]-[41] the Full Bench had accepted the employer's submission that at the time of award modernisation it was a general rule that penalty rates would apply at the ordinary time rate. So far as I can see, it does not say this.
I therefore do not accept that SDAEA v Fantastic Furniture provides support for the suggested general rule.
Against the existence of any general rule, the FWO then submitted that it was entirely possible for an industrial instrument to be construed as permitting cumulative penalties, citing the reasons of Bromberg J in Target Australia Pty Ltd v Shop, Distributive and Allied Employees' Association [2023] FCAFC 66; 324 IR 304 at [64]. There his Honour observed:

[276]

The fact that 'rate' in the first sentence can only mean the base rate springs from the logic of what is being discussed. I do not consider that it (or the other clauses to which Coles refers) provide support for the more general proposition that 'rate' in the award means 'base rate' where it appears in a context where logic does not demand that 'rate' means 'base rate'. Every clause turns on its own wording and the imperatives of one may not necessarily be those of another. In the case of cl 31.2(b), both readings of 'rate' are open and there is nothing about the clause which tells in one direction or the other.
As to (b), Coles' point was this: cl 31.2(b) is a lineal descendant of earlier clauses which had used the expression 'shall' or 'must' 'be paid at double rates'. That phrase had been used not only in relation to the retail industry but also a number of other awards including, as everyone knows, the Metals Award 1998. When that award was modernised to become the Manufacturing and Associated Industries and Occupations Award 2010 ('the Manufacturing Award 2010') the wording used was 'must be paid at the rate of double time': cl 40.4(c). Coles submitted, and I accept, that the natural meaning of that wording is that the rate is just double the base rate.
However, I do not think anything can be deduced from this about the meaning of cl 31.2(b). The same original idea, 'must be paid at double rates', was found in several awards including some that are ancestors of the Award. But the offspring of those awards have diverged and the family branches have terminated in different wording. One of these branches terminates in cl 31.2(b) while another terminates in cl 40.4(c) of the Manufacturing Award 2010. I do not think that the wording of those two cousins - 'double the rate' and 'at the rate of double time' - tells one anything about the original meaning of 'must be paid at double rates' in the Metals Award 1998 or its relevant analogues. It just tells one that the descendant awards have developed their own wording.
This does not necessarily mean that Coles is wrong, however. If it could establish that the original meaning of 'must be paid at double rates' in the Metals Award 1998 was that it meant double the base rate of pay then its argument would be on surer footing. However, Coles did not draw my attention to any decision in which 'must be paid at double rates' in the Metals Award 1998 (or any other award with similar wording) had been interpreted to mean double the base rate of pay.
The basic problem is that there is no material to which my attention was drawn which explains why the wording in cl 31.2(b) was adopted or what the earlier wording actually meant. Coles sought perhaps to surmount this problem by advancing a separate legal contention that the process of award modernisation was not intended to disadvantage employees or increase costs for employers. I accept this legal contention for the reasons set out in footnote 879 of Coles' written submissions, relying upon [2] of the Award Modernisation Request from which the Award sprang. However, that proposition remains fruitless unless it first be demonstrated what the meaning of 'shall be paid at double rates' in the earlier awards actually was. As I have said, Coles attempted no such demonstration. Further, there is no material which suggests that when the Commission made the Award it in any way turned its mind to the current question. Indeed, as the decision of Ross P referred to above at paragraph [283] shows, the clause was understood to be ambiguous and a calculated decision appears at that time to have been made to continue the ambiguity under the banner of plain drafting. Subsequently the Full Bench has decided to remove the ambiguity by changing the wording to 'at the rate of 200% of the employee's minimum hourly rate': Re Application by the Australian Retailers Association [2024] FWCFB 251.
As to (c), Coles submitted that there were a number of decisions of Industrial Tribunals that showed that there was a general principle that penalties were not cumulative. The first of these is In the matter of applications by organisations of employees for awards and variations of certain awards with respect to rates of pay for work performed on Saturdays and Sundays [1947] CthArbRp 131; (1947) 58 CAR 610. This was a decision of the Full Court of the former Commonwealth Court of Conciliation and Arbitration comprising Drake-Brockman ACJ, Kelly J and Sugerman J. The question in this case, which was decided in 1947, related to the rates of pay for work done on Saturdays and Sundays. The rates claimed were time and half for Saturday and double time for Sunday. The Court was concerned with a complex regulatory structure the details of which are not material. At 624 Drake-Brockman ACJ and Sugerman J said this:

[278]

None of the discussion before this passage involves an examination of the question of whether extra payments for Saturday should be in lieu of shift premiums. I accept that the decision does establish that increased rates on the weekend appear to be set so that they substitute for any shift premiums. The same principle was applied by Cook J in In re Butter, Cheese and Bacon Factories and Milk and Cream Condenseries (Newcastle and Northern) Award [1962] AR (NSW) 1 at 3; by the Full Bench of the NSW Industrial Commission in Re Brickmakers and Assistants (State) Award [1948] AR (NSW) 234 at 240; and by Richards J in Re Hospital Employees' (Metropolitan) Award & Ors [1969] AR (NSW) 120 at 126_._
From this I would readily conclude that when formulating awards by means of arbitration, it has been the practice of industrial tribunals to make the payment of penalty rates for weekend work in substitution for and not cumulative upon the payment of penalty rates for shift work. I would accept that if cl 32.2(b) were a clause that provided for the award of a penalty rate for weekend work cumulatively upon a shift premium then it would be legitimate to refer to these cases to resolve any ambiguity.
However, that is not what cl 31.2(b) is concerned with. It is not related to the imposition of either a penalty for weekend work or a premium for shift work. If I could discern from the cases just mentioned that the tribunals in question had derived their statement about the non-cumulative nature of the relationship between weekend penalty rates and shift penalty rates from some higher general principle that penalties ought not to be cumulatively awarded on top of each other, then I would accept that general principle would be of assistance to Coles. However, despite closely reading the decisions I am unable to detect any support for this more general proposition. As such, based on the material to which Coles took me I am unable to say that there is a general principle that penalties may not be awarded cumulatively on other penalties.
Apart from these arbitral decisions, Coles (like Woolworths) also sought to rely upon the decisions in Racing and Wagering Western Australia and Wilson Parking to establish the same general principle. The statement made by Williams C in Racing and Wagering Western Australia was that '[i]t is far from normal for an award to provide for the cumulative application of overtime rates and shift loadings': [72]. Assuming that statement to be correct, however, cl 31.2(b) is not concerned with overtime rates or shift loadings. In any event, the survey of the arbitral decisions to which Coles has taken me suggests that it might not be correct to speak, as Williams C does, of overtime rates. It is apparent from the arbitral decisions that the social nature of weekend work was very much at the fore of the analysis and it does not seem to be necessarily obvious that the reasoning in those decisions can simply be transplanted to overtime rates in general. More broadly, I think there may be some difficulties in translating a view about what was sociable in 1947 to 1969 (when these arbitral decisions were made) into a different modern context where views about the nature of weekend work are not necessarily the same.
It may be that Lacy SDP was taken to, or was aware of, other decisions to which I am not privy. In any event, it is not necessary to express a concluded view on this. I do not accept that Racing and Waging Western Australia or Wilson Parking assists Coles.
Coles also relied upon SDAEA v Fantastic Furniture, to support its submission. I have explained in FWO v Woolworths why I do not accept that this decision provides support for the general principle now advanced. At [552] of its submissions Coles also referred to the decision in Michael Hill Jeweller (Australia) Pty Ltd T/A Michael Hill [2022] FWCA 4256 ('Michael Hill') as authority for the proposition that there was a long-standing practice of making penalties non-cumulative. I was not directed to any particular page where this longstanding practice was discussed in this decision. Michael Hill is a case which did involve, inter alia, the Award. It was a BOOT case about whether an enterprise agreement should be approved. I have been unable to detect any discussion of the present issue in the decision. I do not accept that it assists Coles.
It follows that I do not accept that the contextual matters put forward by Coles provide any reason to read cl 32.1(b) as not authorising the award of penalties in a cumulative fashion. This, as it happens, is also the conclusion I have reached in relation to the contextual matters put forward by the FWO. At the end of the contextual considerations, one is left therefore with a clause which is ambiguous and for which no contextual material provides any assistance in resolving that ambiguity.
On the other hand, the Full Bench in Re Application by the Australian Retailers Association [2024] FWCFB 251 concluded that generally 'double rates' required payment of double time, ie, double the minimum hourly rate. It was for that reason that it altered the wording of the overtime clause. However, the cases the Full Bench examined were not construction suits.

[279]

The question presented by the case is difficult. There are a number of considerations bearing on its resolution.
First, whilst it is interesting that the Full Bench last year removed the ambiguity so that the short break clause now operates to make payable double the minimum hourly rate, this cannot affect the interpretation of the clause.
Secondly, the words 'double the rate they would be entitled to' is capable of meaning double the rate of pay inclusive of any loading or penalty rate. This interpretation is supported both by the word 'rate' which could refer to those loadings and penalty rates and the words 'would be' which, being subjunctive, may be construed as inviting a consideration of a counterfactual; that is to say, a consideration of what the employee would have been paid had cl 31.2 not applied.
Thirdly, the words 'double the rate they would be entitled to' is also capable of meaning double the minimum hourly rate applicable during ordinary hours. This involves reading 'rate' as 'minimum rate' and affording no particular significance to the use of the subjunctive. Whilst I would find this approach to interpretation unattractive in a statute or a regulation, it is much less interpretatively problematic in the context of an industrial instrument.
Fourthly, the second meaning is capable of resulting in very high penalty rates. For example, a full-time or part-time employee who works on a public holiday is entitled to be paid 'an additional 125% loading for all hours worked' and a casual employee is entitled to a 150% loading: cl 29.4(f). This constitutes double time and a quarter and double time and a half respectively. If these rates are applied through the words 'double the rate they would be entitled to' the resulting penalty rate will be quadruple time and a half for full-time and part-time employees (i.e. 450%) and quintuple time for casual employees (i.e. 500%).
Fifthly, it is difficult to discern any particular policy reason why the short break penalty should be accompanied by such draconian consequences, when the other penalties and loadings are not suggested to have this effect.
Whilst the matter is finely balanced, I have concluded that considerations of practicality should prevail. The expression 'double the rate they would be entitled to' means 'double the minimum hourly rate'.

[315]

There are two aspects to the present question. The first is the proper construction of the expression 'outside...the roster conditions prescribed in clauses 27 and 28' in cl 29.2(a). The second is the correct characterisation of cl 28.14.
As to the first aspect, the word 'condition' in the expression 'roster condition' bears its ordinary meaning - no party suggested that it had a trade or technical meaning. The noun 'condition' means 'a restricting, limiting or modifying circumstance' (Macquarie Dictionary (online) definition 7) or, similarly, 'a restriction, qualification or limitation' (Oxford English Dictionary (2nd ed, Clarendon Press, 1989) definition 1.5). Although one should be a little circumspect about the use of dictionary definitions, they can provide some guidance and do so in this case. What cl 29.2(a) operates upon are those restrictions on how an employer may roster an employee found in cll 27 and 28 where each restriction must be such that an employee may sensibly be said to work hours 'outside' of that restriction.
As to the second aspect, none of the provisions of cl 28.14 satisfy both these requirements. Hence, cl 28.14 is not a roster restriction to which cl 29.2(a) applies. Turning to each subclause, cl 28.14(a) requires the employer to post the staff rosters on a notice board. This is not a restriction on how an employer may roster an employee and therefore fails because it is not a roster condition.
Clause 28.14(b) provides that an employer must retain superseded roster notices for 12 months. This is not a restriction on how an employer may roster an employee and therefore fails because it is not a roster condition.
Clause 28.14(c) permits the employer to alter a roster for a given day by mutual agreement with the employee but only before the employee arrives at work. This is a restriction on the right of the employer to change the roster of the employee. It is therefore a roster condition. However, it is not possible for an employee to work hours 'outside' of this restriction as this concept makes no sense. It makes no sense because the restriction is not on when an employer may roster an employee but rather on the ability of the employer to alter the roster. Clause 28.14 (c) is not therefore a roster condition to which cl 29.2(a) applies, although it is a roster condition.
Clause 28.14(d) requires permanent changes to a roster only to be done on at least seven days' notice unless the employee disagrees in which case the notice period is 14 days and a dispute resolution mechanism is enlivened. I accept that this is a restriction on the right of the employer to change the roster of the employee and hence that it is a roster condition. However, as with cl 28.14(c) I do not accept that it is a condition to which the concept of an employee working hours outside of the condition makes sense. Thus cl 28.14(d) is not a roster condition to which cl 29.2(a) applies although it is a roster condition.
Clause 28.14(e) provides that where there has been a one-off roster change in accordance with cl 28.14 and the roster reverts to its previous state the following week then the employee is to be paid for any extra work done at overtime rates. Although the matter is not free from doubt, I prefer the view that this is a roster condition. However, it is not a condition of which it is meaningful to speak of an employee working hours outside of. Thus, cl 28.14(e) is not a roster condition to which cl 29.2(a) applies, although it is a roster condition. Further, because cl 28.14(e) contains an actual stipulation that overtime is to be paid it is a powerful indicator that cl 29.2(a) does not apply since this would involve double overtime (or because it would involve superfluity in expression).
Clause 28.14(f) prevents an employer changing an employee's roster with the intention of avoiding penalties, loadings or other benefits. This is a restriction on the ability of an employer to alter an employee's roster. However, it is not a restriction of which it is meaningful to speak of an employee working hours outside of. Thus, it is not a roster condition to which cl 29.2(a) applies although it is roster condition.
In light of those matters, I conclude that neither cl 28.14 nor any of its constituent subclauses are roster conditions to which cl 29.2(a) applies. In light of this conclusion, it is unnecessary to deal with the matter raised in Issue 29 of FWO v Woolworths.
In its case against Woolworths, the FWO advance a series of propositions to demonstrate why cl 28.14 should be read as a roster condition to which cl 29.2(a) applied. It will follow from the above that I do not accept this. However, it is necessary in the interests of procedural fairness to explain why I am unpersuaded by the FWO's propositions.
The first four propositions were textual in nature.
The first proposition was that the evident purpose of cl 28.14 was to ensure certainty, stability and transparency for the employees within its remit as to their hours of work. I accept this contention.
The second proposition (as clarified in reply) was that the existence of a published roster was important to enable employees to assess which of the roster conditions in cl 28.1-13 might be impacted by proposed or actual changes to their rostered hours and whether this would sound in penalties or overtime. I accept this contention.
The third proposition was that cl 28.14 was designed to accommodate only the limited exceptions in cl 28.14(c)-(f). I accept this contention.
The fourth propositions was that cl 28.14(a) used the language of 'will' which was an imperative demand, that cl 28.14 was about rosters and that the broader context including cl 29.2(a) showed that cl 28 (including cl 28.14) was concerned with rules that were conditions about rosters. I accept that the requirement that the roster be published on a notice board is imperative and that cl 28.14 is concerned with rosters. I also accept that it may be said that cl 28.14 is concerned with rules that are conditions about rosters. Another way of putting this is that cl 28.14 is about rules that are conditions about rosters. I do not accept that this quality of cl 28.14 emerges from the surrounding context or cl 29.2(a); rather, it simply appears from the text of cl 28.14.
However, as I have explained above, what cl 29.2(a) requires for its enlivenment is a restriction on the right of the employer to make and change the roster of the employee where that restriction must be such that an employee may sensibly be said to work hours 'outside' of it. Only when both these conditions are met will there be a roster condition for the purposes of cl 29.2(a). The fact that, as the FWO submits, cl 28.14 may be characterised as being about rules that are conditions about rosters does not satisfy that requirement. For those reasons I am unpersuaded by the FWO's four textual contentions.
The FWO made three other points which were non-textual in nature. The first was that it was improbable that cl 28.14 contemplates an intensive or collateral factual inquiry into when, how and in what circumstances a roster is varied or updated. I do not understand the point of this submission. Clause 28.14 contemplates that a roster may be varied in the circumstances specified in sub-cl (c) and (d). The factual circumstances which enliven (c) are 'unexpected operational requirements'. I do not think this involves an intensive or collateral factual inquiry of the kind suggested. Sub-clause (d) is enlivened by a permanent roster change which need not have any particular qualities at all so it is difficult to discern the suggested intensive or collateral factual inquiry. I do not accept therefore that cl 28.14 involves an intensive or collateral factual inquiry. As such the proposition that is improbable that the clause would contemplate something which it does not contemplate does not go anywhere or at least anywhere useful. That outcome leads me to suspect that I have not understood the point the FWO is seeking to make. However, if it means anything else, I am unable to understand the point and would reject it for that reason in the alternative.
The second non-textual contention was that Woolworths had not established that there was a yearly assessment under cl 28.3 in each relevant store about the method of implementation of the 38 hour working week as provided for in cll 28.1 and 28.2. This submission was advanced in response to an alternative submission made by Woolworths. Since I have not found it necessary to consider that submission, it is not necessary to deal with this one either.
The third non-contextual contention was as follows:

[319]

Commonsense might suggest that overtime was not payable for (a) but was payable for (b).
Both of these factual problems arise from the fact that the employees were given the ability to control their own rosters whereas it is evident that those who drafted cll 28 and 29 did not approach the matter on that basis.
As to the situation in (a), a salaried manager who decided to turn up an hour late to work and stay back an hour late, has reached a mutual agreement of the kind referred to in cl 28.14(c). The matter which has led the salaried employee to conclude that they can start an hour late is an unexpected operational requirement of the kind referred to in cl 29.14(c). It is evident that the salaried employees were authorised by both Coles and Woolworths to work in this fashion. The mutual agreement is provided by the employee's own decision to change their working hours. There can be no doubt about the ability of each employee to provide consent to this from their own perspective. However, they also had authority to bind Coles and Woolworths as well. That authority was provided by the fact that both companies clearly intended their salaried employees to work flexibly. I conclude therefore that where an employee unilaterally altered their working hours in this fashion, no overtime entitlement arose under cl 29.2(a).
As to the situation in (b), in the contracts of employment both companies authorised the salaried managers to work reasonable additional hours. Where the amount of work which needed to be done on a particular day required a salaried manager to work additional hours, then overtime was payable under cl 29.2(a) either because the hours were in excess of the relevant 38 hour working week requirement in cl 28.1(a) or because they were worked outside the roster conditions in cll 27 or 28.
In each case, there will be a factual question as to whether the overtime hours worked were reasonably required. I have explained earlier how s 557C operates in this case. Given the way the case is framed, it is Coles and Woolworths which bear the burden of proving that the work was not reasonably required.

[331]

As to the first question, there is a significant problem if time rostered to be worked but not in fact worked because of an entitlement not to be at work is not counted for roster purposes under cl 28.1. The problem has a weak and a strong form. The weak form is that if hours rostered on but not worked because of an entitlement not to be at work do not count for the 38 hour roster rules in cl 28.1 then the requirements of those rules will necessitate that the hours not worked must be made up elsewhere inside the roster.
To give that abstraction some flesh, consider the position of Phil who is on a weekly roster working 7.6 hour days, five days, every week Monday to Friday. Phil's roster falls within cl 28.1(a) because it is a 38 hour roster for one week (and 5 x 7.6 is 38). Suppose Phil tells his employer that he is taking a day of annual leave next Wednesday. When the employer draws up Phil's roster for next week the question is whether, for the purposes of the 38 hour rule in cl 28.1(a), the 7.6 hours Phil will not be working on Wednesday count towards the 38 hours or not.
If that 7.6 hours does not count toward the 38 hours then this will have a serious impact on Phil. It will mean, to begin with, that his employer is entitled to make him work another 7.6 hours during the week to make up the 38 hours in cl 28.1(a). This could be done in a number of ways but one obvious way would be to roster Phil on to work 7.6 hours on Saturday.
If this is how the roster rule in cl 28.1(a) works then it means that although an employee is apparently given an entitlement not to be work (because of a public holiday, sick leave, annual leave, long service leave or time off in lieu) this entitlement comes with a downside. The downside is that all rostered hours of work not actually worked by reason of the exercise of the entitlement can be made up by the employer elsewhere in the roster.
I have used the example of a single day of leave in Phil's case but the principle can be extrapolated to all 4 weeks of Phil's annual leave entitlement. Unless the hours which Phil would have worked in the roster but for the taking of that leave count for roster purposes then the employer is entitled to make up all 4 weeks of leave elsewhere in Phil's roster. The same is true of public holidays and long service leave. If this is how the roster rules operate then all leave entitlements are chimerical because they must be made up elsewhere in the roster.
This is such an outlandish result that I would not construe cl 28.1(a) this way unless compelled to do so by words of unmistakable clarity. In the meantime, having noted the weak objection to construing cl 28.1 in that way, it is convenient to turn to the strong objection. The strong objection takes Phil's annual leave entitlement and points out that the Award becomes incoherent and unworkable if Phil decides to take five days of annual leave in a week, that is to say, he takes a day of leave for each of the days between Monday to Friday on which he otherwise would have been working for 7.6 hours. In the weak objection, I noted the unfairness in making Phil make up the leave taken in the balance of the roster for the weak. Under the strong objection, the notion that it would be unfair to make Phil work his entire 38 hours on Saturday and Sunday is jettisoned and replaced with the notion that it would be impossible. Because only two days are available in the roster to accommodate the 38 hours which must be filled, Phil will need to work for at least 19 hours on at least one of Saturday or Sunday. But an employee cannot work more than 11 hours in any day and even in that case only one day per week, the maximum hours worked otherwise being 9 hours in any one day: cl 27.3.
The weak and strong objections therefore demonstrate that unless rostered hours which are not worked because of an entitlement not to be at work count for roster purposes, then the roster rules in cl 28.1 lead to outcomes which are both outlandishly unfair and worse impossible.
Both of these matters persuade me that the submissions advanced by Woolworths and Coles to the effect that such hours not worked do not count for the purposes of cl 28.1 cannot possibly be correct. I accept, as Woolworths submitted, that in some contexts a reference to hours 'worked' can connote hours actually worked. However, it cannot be in the context of cl 28.1 for the reasons I have just given. Coles and Woolworths' other submissions seem to have been directed at cl 29.2(a) and I will deal with these below.
There is a point in Pabalan not raised by the FWO and that is whether hours not worked in a roster because time off is taken in lieu count for roster purposes. The same process of reasoning applies. If time off in lieu did not count for roster purposes then time off in lieu would prove illusory since it would need to be made up elsewhere in the roster.
There are two final matters under the heading of cl 28.1. First, both sides pointed to authorities which they said supported their positions. I do not think any of those authorities matter in light of the textual necessities I have explained. Secondly, the reasoning above is concerned with a weekly 38 hour roster under cl 28.1(a). However, neither side suggested that the outcome of the debate turned on which subclause of cl 28.1 applied and I can see no reason why it would. I conclude that for the purposes of the roster rules in cl 28.1 rostered hours not worked because of an entitlement not to be at work count for the purposes of those roster rules. These will include sick leave, annual leave, long service leave, public holidays and time off in lieu.

[333]

The formal issue here is whether hours rostered but not worked because of an entitlement not to be at work count for the purposes of the overtime rule in cl 29.2(a). Consider the position of Myrtle who is on a weekly roster of five days working 7.6 hours from Monday to Friday. Myrtle tells her employer that she is taking next Wednesday off as annual leave. I have explained above why when the employer draws the roster the 7.6 hours that Myrtle does not work on that Wednesday nevertheless count for the purposes of the roster rule in cl 28.1(a).
Now imagine that in the same week, Myrtle is asked to work an extra two hours at the end of her shift on the Friday. The question which divides the parties is whether she is entitled to be paid overtime for these two additional hours.
In my view, it is clear that she is. The extra two hours worked are 'Hours worked...outside...roster conditions prescribed in clauses 27 and 28'.
Once the correct construction for cl 28.1(a) has been determined, then it is difficult to see how this is not an inevitably corollary. Myrtle was not rostered on for those two hours and therefore working them was outside the roster condition prescribed in cl 28.1(a). Woolworths' basic submission against this is that the hours referred to in cl 29.2(a) had to be hours 'worked' and that 'worked' had to mean 'actually worked'. A number of reasons for this were advanced but none matters. This is because I accept Woolworths' submission that 'worked' in cl 29.2(a) means 'actually worked'. The problem is that this does not matter as some reflection on the position of Myrtle shows. The fact is that Myrtle did work for 2 hours after her shift on Friday. Her overtime claim is therefore for hours actually worked.
Woolworths' submission impermissibly elides the hours for which Myrtle is claiming overtime (2 hours actually worked after her shift on Friday) with the 7.6 hours she was rostered on for on Wednesday but which she did not work because she took leave. But the overtime entitlement has nothing to do with that 7.6 hours. What enlivens cl 29.2(a) is the fact that Myrtle did work for 2 hours outside of the roster condition prescribed in cl 28.1(a).
The same confusion afflicts another submission made by Woolworths. This was that its construction of cl 29.2(a) was supported by the purpose of overtime. Here the thinking was that the purpose of overtime was to compensate employees and to provide disincentives for employers not to require employees to work long hours. One may assume the correctness of that formulation of that purpose. But that purpose is precisely served in relation to the two hours that Myrtle in fact works. Woolworths' submission might have had some purchase if the question was whether Myrtle should be paid overtime for the rostered 7.6 hours she did not work on Wednesday but, as I have explained, that is not the issue. Other submissions made by Woolworths suffered from the same problem and should be rejected for the same reason. Coles submissions were to similar effect.
I should say in fairness to Woolworths (and Coles) that the misconception that the debate was somehow about whether time taken as leave attracted overtime was also to be found in several places in the FWO's submissions.

[353]

The FWO submits that the reference to any reasonable additional hours should be understood as a reference to overtime. So construed, the clause has the effect of preventing an employee working on seven consecutive days even if one of those days is a day upon which only overtime is worked. The reasons for this are said to be twofold. First, the FWO submits that 'worked' ought not to be read down to mean 'rostered days worked'. Secondly, there is an accepted dichotomy between ordinary hours and overtime; cl 28.12 observes a dichotomy between ordinary hours and reasonable additional hours; ergo, reasonable additional hours must be overtime.
I do not accept either of these contentions. As to the first, I accept the orthodox distinction between ordinary hours and overtime. But construing the clause so that it does not apply to overtime (which can therefore be worked on a seventh day), does not have the effect of causing 'worked' to mean 'rostered days worked'. The insertion of those words into the clause does not result in the clause meaning that overtime is not covered by the clause; it results in the clause not making grammatical sense.
As to the second argument, the FWO's submission is not logical. That overtime is dichotomous with ordinary hours and ordinary hours are also dichotomous with reasonable additional hours does not entail that overtime and reasonable additional hours must be the same thing. There is a dichotomy between killer whales and all other animals. There is also a dichotomy between kangaroos and all other animals. But this does not mean that killer whales are kangaroos.
Coles submits that the reference to any reasonable additional hours is a reference to the position of part-time employees. Part-time employees are employees who work less than 38 hours per week and but who have reasonably predictable hours of work: cl 12.1. When a part-time employee commences work the employer and the employee are to agree in writing on a regular pattern of work: cl 12.2. Having done that, however, the employer and employee are at liberty to vary a regular pattern of work by force of cl 12.3:

[364]

To say that it is consistent is not to say very much, however.
Although agreements to change a part-time employee's regular pattern of work under cl 12.3 fit uncomfortably into the expression 'reasonable additional hours', three matters persuade me that it should be construed that way.
First, cl 28.12 is part of cl 28 which is headed '38 hour week rosters'. Leaving to one side cl 28.12 no other sub-clause of cl 28 deals with the topic of overtime. Overtime is instead dealt with in cl 29 which is headed 'Overtime and penalties'. This a textual indicator that cl 28 is not intended to deal with overtime at all.
Secondly, there is no escaping that cl 31.2(a) does observe a distinction between reasonable additional hours and overtime. If the FWO is correct then cl 31.2(a) reads 'Work includes overtime or overtime' which is unlikely or, worse, that the expression 'reasonable additional hours' means something different in cl 31.2(a) to what it means in cl 28.12.
Thirdly, these first two matters persuade me that there is a distinction between overtime and reasonable additional hours. The question then becomes: what are reasonable additional hours if they are not overtime?
The answer lies in cll 29.2(a) and (b) (extracted above) which specify what overtime is (and hence which also define what it is not). For full-time employees that which is not overtime consists of hours worked up to ordinary hours of work, hours worked inside the span of hours and hours worked inside the roster conditions. None of these can coherently be said to be reasonable additional hours.
For part-time employees, however, this is not so. In their case, that which is not overtime is, by cl 29.2(b) hours worked in accordance with the regular pattern of work agreed under cl 12.2 (or less than that pattern) or hours worked in accordance with a variation to that original regular pattern under cl 12.3 (or less than that varied pattern). In the case of this concept, although it is not elegant, I accept that its second part may be described as reasonable additional hours. Although this is to a degree strained, that strain is necessary to prevent cl 31.2(a) descending into nonsense.
I therefore accept Coles' submission about this. Clause 29.12 does not prevent an employee working a seventh day of overtime.

[378]

Here the issue is whether days worked as overtime count for the purposes of this rule or whether, instead, the clause is only a roster condition concerned with the setting of ordinary hours.
Coles submitted that cl 28.11 is a restriction on when 'ordinary hours' may be worked and hours worked as overtime do not constitute ordinary hours. Consequently, when determining whether an employee has been provided with the required consecutive days off, regard should only be had to the ordinary hours worked by that employee. In its summary response to Issue 34, Coles seems to take this further by stating that because a day worked as overtime is not ordinary hours it is a day off.
While I consider that to describe overtime as a 'day off' is absurd, I agree with Coles that the operation of cl 28.11 is such that only ordinary hours are considered when assessing whether cl 28.11 has been complied with.
As I have explained in a preceding section, clause 28 is entitled with '38 hour week rosters' and deals with that topic. It contains rules about rosters which are referred to in the overtime clause, cl 29.2(a), as roster conditions. Where an employee works outside the roster conditions in cl 28, the employee is to be paid overtime. Clause 29.2(a) therefore assumes that it is possible to work outside a roster condition. It proves that it is possible to work overtime on days which are not rostered.
In that circumstance, I read clause 28.11 as one of a number of roster rules dictating how ordinary hours are to be worked. This is because that is what it says ('Ordinary hours will be worked....') and because if it is not read that way the reference to working outside the roster conditions in cl 29.2(a) makes no sense.
To put it another way, an employee whose ordinary hours are worked so as to provide them with two consecutive days off in a given week is not working 'outside' the roster condition in cl 28.11 if they then work a series of overtime hours on one of those days off. However, the very fact that those extra hours are overtime (and so not falling foul of the roster condition in cl 28.11) means that they obtained their character due to being in 'excess of the ordinary hours of work' or one of the other triggers in cl 29.2(a). If no such trigger was present, those hours would not be overtime and would contribute to the operation of cl 28.11 as ordinary hours.
The FWO made no useful submissions about this topic.

[379]

It is convenient to return to cl 28.10 which is set out above. The next issue which arises between the FWO and Woolworths (but not Coles) about cl 28.10 is when the week referred to in the clause begins.
The parties seem to be in agreement that it is the employer that fixes when the week begins but appear to be at issue as to whether the starting day must be the same for all employees. I can see no textual foundation for the FWO's submission that the starting day must be the same for all employees.
The FWO submitted that the only evidence before the Court was that Woolworths rosters began on Monday and took me to the Agreed Statement of Facts [7], [9]-[10]. Woolworths submitted that it also had employees who were on a roster week which commenced on a Sunday. This submission did not include any reference to any evidence and is impossible to assess. Thus the only evidence I was taken to appears to show Woolworths rosters commencing on Mondays.
There is no reason to resolve this issue at the level of Tier 1 and 2 issues. However, for each Calculation Employee there will be a Tier 3 question of fact about when that employee's roster began. That factual debate will then be resolved by reference to the evidence which is before the Court and, potentially, through the operation of s 557C. There is no need further to address the point here.
Moving next to cl 28.11(a), the question is how the requirement that the employee have two (or sometimes) three consecutive days off is to be accommodated where those two or three day periods run over the end of the working week as rostered for an employee. For example, where an employee works on a 7 day roster starting on Monday, does the employee have two consecutive days off if he or she does not work on Sundays and Mondays?
It is difficult to identify the redeeming features of a construction of cl 28.11(a) which would require these two days not be treated as consecutive and therefore entitling the employee to be treated as if denied one or more days off (I return to how the overtime is to be calculated in that situation in the next section). The answer, I think, is to read cl 28.11(a) as a practical rule: Kucks. This would entail that the word 'week' in cl 28.11(a) just means any period of seven consecutive days: cf. Scott v Sun Alliance [1993] HCA 46; 178 CLR 1 at 9. Read this way, cl 28.11(a) will be complied with so long as the requisite two (or three) consecutive days can be found in a given 7 day period.
This has the consequence that 'week' in cl 28.11(a) has a different meaning to that which it bears in cl 28.10. This is, no doubt, unsatisfactory. But having regard to the nature of the Award as an industrial instrument to be interpreted practically and the absurdity entailed by the FWO's approach, it seems to me necessary to approach it in this fashion.

[380]

A feature of cl 28.11(a) is that it operates over a period of two weeks. There must be two consecutive days off in the first week unless there are three consecutive days off across the two week period. At the end of the first week, it may be that two consecutive days off have been taken. But is equally possible that they have not been. And if they have not, one cannot know until sometime in the second week whether the three consecutive day requirement will have been satisfied.
Once hours are worked outside the roster condition prescribed in cl 28.11 then overtime will be payable for those hours worked: cl 29.2(a). The issue which divides the parties is the methodology for determining how overtime is to be calculated where cl 28.11 has not been complied with.
The FWO submits that overtime becomes payable when non-compliance with cl 28.11 becomes unavoidable. It will only become impossible to comply with cl 28.11(a) when, during the second week of the fortnight, it becomes apparent that it will not be possible for the employee to have three consecutive days off. It would appear to follow that non-compliance will only become certain in this sense once the employee has worked on the 5th day of the second roster week after not having had two consecutive days off in the first week. It is only on that day that it becomes impossible to fit three consecutive days off in the remaining 6th and 7th days of the roster week. This analysis also requires one to keep in mind that the weeks involved in cl 28.11(a) are just given 7-day periods. The two week periods are likewise any given 14-day period. Where the 3-day break is involved, impossibility will be gauged from the beginning of the period in which the employee worked 6 days; ie, the 14 days runs from then.
An important corollary of this approach is that two days of overtime will be incurred. This is because the 6th and 7th days of the second week will have been worked outside the roster condition in cl 28.11(a).
Woolworths, by contrast, submits that overtime should be payable under cl 28.11(a) on days that should have been a day off. Thus:

[382]

Unlike the FWO's approach (b) and (c) result in only a single day of overtime although this is not so in the case of (a).
Woolworth's submission ignores the fact that cl 28.11(a) operates over a two week period. For example in (a), it is not the case that overtime is payable on the last two days of the first week if the employee has not had any other days off in that week. This is because the employee may receive three consecutive days off in the second week. Woolworths' approach cannot be reconciled with the text of cl 28.11(a).
Woolworths submits that it is entitled to take this approach because it is supported by the Full Court's decision in United Voice v Wilson Security Pty Ltd [2019] FCAFC 66; 269 FCR 608 ('United Voice'). That case concerned the Security Services Industry Award 2010. Clause 21.11 of that award required an employee to work his or her ordinary hours in accordance with a roster of which advance notice had been given. The employee was rostered on to do work in excess of his ordinary hours on a 152 (4 x 38) hour roster over 4 weeks. The question was whether overtime became payable only once the 152 ordinary hours had been worked or whether the employer could choose where in the roster the ordinary hours (and hence the overtime hours) would be worked. The immediate issue was whether the employer could choose to roster the overtime on Sundays and thereby avoid having to pay a penalty rate. This was answered by the Full Court in the affirmative.
I do not think that United Voice says anything about the operation cl 28.11(a) for several reasons.
First, an important difference is that in United Voice the employee was bound to work their ordinary hours in accordance with the roster and overtime was payable for hours worked in excess of those ordinary hours. In this case, as I have explained, the roster is not directly relevant to the calculation of overtime and there is no equivalent to cl 21.11 of the Security Services Industry Award 2010.
Secondly, in United Voice it was possible to say that the overtime hours worked were in excess of the 152 hours even before that 152 hours had been worked (in short because 'in excess' did not mean 'after' and because the employer could fix the roster for ordinary hours). There is no corresponding concept in the case of c 28.11(a).
Thirdly, I was not taken to any published rosters to indicate that what Woolworths suggested had occurred in the case of any actual roster. United Voice was a case about actual rosters. I do not read United Voice as authorising, outside of a published roster structure, an employer to allocate overtime as it sees fit.
I therefore reject Woolworths' approach.
Coles submitted that the employer could assess compensation in the most efficient manner including the most cost-effective for which it cited United Voice. It then set out two ways this might be done:

[392]

By the time of submissions, it was no longer in dispute that cl 28.5 applied to Coles because more than 15 employees worked in each of its supermarkets. There was an issue as to what was necessary for an agreement to be reached under cl 28.5 and 28.6. For the reasons I have given previously, it is necessary for the objectively determined facts to indicate that the employee was aware in agreeing to working the suggested hours that they were foregoing a benefit under cl 28.5.
The first issue between the parties is whether the situations in cl 28.6 are examples of specific agreements in cl 28.5 or whether instead the clause is an exhaustive statement of the specific agreements which can be reached. Coles relies upon the word 'may' in cl 28.6 which it says indicates the presence of a discretion. I do not accept this submission. Read as a whole it is clear that cl 28.6 delimits the kinds of specific agreements which may be reached.
The second issue is how overtime is to be calculated if a specific agreement is reached for the purposes of cl 28.6 but then an employee works hours outside those contemplated by the specific agreement. The FWO did not make any submissions about this but its answers to question indicate that its position is that in this situation overtime should be calculated as if there had never been a specified agreement. I do not accept this (unexplained) position. Working hours outside the specific agreement in cl 28.5 and 28.6 does not cause the specific agreement to cease to exist. Coles submits that overtime will only apply to hours worked outside of the parameters of the specific agreement and that the employer has the ability to 'allocate' the overtime. While I agree with the first part of that submission, I refer to Part G where I consider the possibility of 'allocation'.
The final issue is in respect of the meaning of 'retail establishments' for the purposes of cl 28.5. The parties held similar positions as they did on the construction of 'retailer' for the purposes of cl 27.2(b)(iii). For the reasons I have given previously in respect of that issue, I agree with Coles that 'retail establishment' is intended to refer to Coles as a retail corporate employer rather than a single store as contended for by the FWO.

[401]

Submissions (a) and (b) are inconsistent with submission (c).
Submission (c) is not correct. As resort to the two cases cited by Woolworths shows, there is a longstanding issue as to whether shift workers on 7 day shifts are to obtain an extra week of annual leave. That principle appears to have coalesced around a principle that shift workers on 7 day shifts worked 5/7th of all Sundays and hence, on average, 34 Sundays each year (although it seems to me that 5/7 of 52 is actually 37): see In Re Iron and Steel Works Employees (Australian Iron & Steel Pty Limited - Port Kembla) Award and Another Award [1965] AR 449 at 472 per Richards J; Re Shift Workers Case [1972] AR 633. Precisely how this came to be mapped on to the expression 'regularly to work on Sundays and public holidays' is perhaps more than a little obscure but there is an explanation in Re Shift Workers Case [1972] AR 633 for those who are very committed to understanding this issue. However, it is clear - as O'Neill v Roy Hill Holdings Pty Ltd [2015] FWC 2461 at [24]- [35] certainly shows - that this learning about regularly working Sundays is, as the FWO correctly submits, tied in a somewhat bespoke fashion to the position of shift workers. It is of no assistance in the present context. Even a cursory examination of these cases show that they are not remotely authority for the proposition that as a matter of law the expression 'regularly works Sundays' means on average that an employee works 34 Sundays each year.
I therefore do not accept Woolworths' submission about proposition (c). I do, however, accept Woolworth's propositions (a) and (b) which seem orthodox (and inconsistent with proposition (c)). I therefore reject the FWO's approach which, as I have said, was not really supported by any actual argument.
This reasoning leads to the conclusion that whether an employee regularly worked on Sundays will turn upon the position of that employee. The present question has no answer at the level of Tier 1 and Tier 2 issues. As Woolworths correctly observes, much may depend upon individual roster patterns.
There are then a series of calculation questions but only in Baker. These are, first, whether the three consecutive days off which cl 28.13(a) contemplates must be taken in a fixed four-week roster period, or instead during any 'roving' four-week period irrespective of when the roster period commences and ends. Woolworths says the former; Mr Baker the latter.
Both approaches lead to anomalies. Mr Baker's approach has the effect that the employer must roster the same three days off in every four-week period once it is first selected. I accept that this is administratively inconvenient. On the other hand, Woolworths' approach means that an employer could give an employee the requisite days off in week 1 and then not again until week 8 which results in six weeks without a 3 day weekend. This too is not an attractive interpretation.
In my view, the ordinary meaning of cl 28.13 is as Mr Baker contends. The clause could have been tied to the roster periods identified in cl 28.1 but it has not been and a four week period has been selected instead.
This question of whether a 'roving' approach is to be taken also arises as a sub-issue in Pabalan and should be resolved the same way.
The FWO also made submissions about this issue. However, there is no such issue in its proceedings and its submissions appear detached from the litigation. I have disregarded its submissions.
The second issue concerns how overtime accrues if cl 28.13(a) is not complied with. Mr Baker submits that overtime accrues on the days which the employee should have had off in order for compliance with cl 28.13 to be possible. Woolworths contends for the result that overtime accrues on the fourth Sunday as well as for any hours worked in the preceding Saturday and Friday. However, it made no submissions in support of this contention.
This issue is structurally similar to the issue which arose under cl 28.11(a). For the same reasons I give in that section, I prefer Mr Baker's approach.
The third issue was said to be whether Sundays on which an employee only works overtime count as a Sunday 'worked'. Mr Baker submits that they do and Woolworths submits that they do not.
Mr Baker submits that cl 28.13(a) makes no reference to ordinary hours or overtime hours and there is no reason to import one.
Woolworths' submission seems to have understood the question to be whether leave or rostered public holidays which fall on a Sunday count as a Sunday which has been worked for the purposes of cl 28.13(a). However, that is not the issue which is raised for consideration. The question is not whether leave or rostered public holidays which fall on a Sunday count for the purposes of cl 28.13(a). Rather, it is whether a Sunday which has been worked only as overtime counts for the purposes of cl 28.13(a).
In any event, I prefer Mr Baker's submissions. Clause 28.13(a) observes no distinction between overtime hours and ordinary hours. The question it is concerned with is the regularity with which Sundays are worked. Why a particular Sunday comes to be worked does not matter.

[413]

The dispute between the parties resolves to this question: do the six hours worked on the Saturday count for the purposes of this rule or not? The answer to this depends on whether the six hours worked on the Saturday can be classified as ordinary hours. If they can be then cl 28.10 will be triggered in addition to cl 28.1(a). The effect of cl 28.10 being triggered is to require the following week to be worked on only four days (and failing that overtime will be payable in that second week once it becomes impossible to ensure that only four days in that week are worked).
On the other hand, if the six hours worked on Saturday are not ordinary hours, then cl 28.10 will not be triggered.
I do not accept the lead applicants' submission about this for two reasons. First, the distinction between overtime and ordinary hours is a long-recognised one: Bluescope Steel (AIS) Pty Ltd v Australian Workers Union [2019] FCAFC 84; 270 FCR 359 at [38] per Allsop CJ and Rangiah J at [356]-[358]. Unless that well-established distinction was displaced by the language of the Award, I see no reason why it would not apply to the present circumstance in the orthodox way.
Ms Pabalan sought to show that the distinction had been displaced by the language of cl 29.2(a). She submitted that the idea that any hour to which cl 29.2(a) applies could not be an ordinary hour sat uncomfortably with its terms. As I understood it, the main point here was that work done within the span of hours was work done during ordinary hours. If that were so, I would indeed accept that an overtime hour triggered by an employee working in excess of ordinary hours but nevertheless within the span of hours would be an ordinary hour. The problem with this submission is that there is nothing in the Award which says that work done during the span of hours is work done during ordinary hours. In effect, Ms Pabalan's submission seeks to define Coles out of the debate by defining work done during the span of hours as being ordinary hours. However, the Award does not say this.
Secondly, if overtime hours are permitted to serve as ordinary hours then the same hours worked may trigger multiple overtime entitlements. In the example above, it will be seen that the employee is compensated for working on the Saturday by being paid overtime for that day. If that day is counted as an ordinary hour then this triggers the operation of cl 28.10 which will in turn require that the employee only work 4 days in the following week. For the same six hours of work, the employee therefore collects twice:

[472]

My reasoning was that s 323(1) requires the employer to pay amounts which are payable at least monthly (s 323(1)(a)), to do so in full (s 323(1)(a)) and to include in the payment loadings, overtime rates and penalty rates (note 2). Section 323(1) operates upon 'amounts' which it assumes are 'payable' and erects upon them a monetary obligation to pay those amounts in full and in cash by the methods specified in s 323(2). Further, Note 2 clarifies that amounts are to be paid in that manner if they become 'payable during a relevant period'. The requirement imposed by s 323(1) for payable amounts to be paid in full was recognised and reiterated by the Full Court in the recent decision of Australian Workers' Union v UGL Resources (Contracting) Pty Ltd [2025] FCAFC 107 at [81] per Raper, Dowling and Longbottom JJ.
The point for present purposes is that s 323(1) operates on amounts which are already payable, regulating only the timing and manner of their payment. It is, therefore, to matters outside of s 323(1) that one must look to find legal rules which operate to make amounts 'payable' and therefore susceptible to being picked by s 323(1).
Usually, it will be the contract of employment or any relevant industrial instrument which makes wages payable in this sense. In some cases (and in this case), the contract and the Award can make the same sum 'payable' for the purposes of s 323(1). For example, Coles had a contractual obligation to pay monthly salary payments which arose by the operation of the contracts of employment. But it also had an obligation to pay the minimum wage under the Award. In that sense, the minimum wage component of its salary payments was 'payable' for the purposes of s 323(1) both under the contract of employment and the Award. The amount by which the salary exceeded the minimum wage was probably payable under the contract and not under the Award (although it is not necessary to reach a view about that).
Because Coles erroneously approached the operation of its letters of employment on the basis that it could set-off its obligations under the Award against the annual amount by which its salary payments exceeded the minimum Award wage, this has the consequence that there will be employees who, in a particular payment month, will have been underpaid. As I have explained at the outset of the reasons, it will be necessary for one such individual to be identified in due course.
The current dispute about cl 23 takes place against that backdrop. The failure by Coles to pay overtime in the fashion indicated above will have constituted a contravention of cl 29.2(a):

[474]

Because the Award is a 'modern award' this also entails that Coles will have, on each occasion, failed to comply with s 45 of the FW Act which provides that 'A person must not contravene a term of a modern award'. This has two consequences. The first flows from s 45's status as a civil penalty provision. Each failure to pay overtime will potentially expose Coles to a civil penalty under s 545(1). The second flows from s 545(2)(b) which authorises the Court potentially to award compensation.
What the FWO now seeks is to increase the number of contraventions. This it does by submitting that each failure to pay overtime (or any other allowance) will also have resulted in a contravention of cl 23.1 (set out above). The FWO reads that clause as requiring a payment in each week or fortnight of the amounts actually due to the employee. It says this flows from the words in cl 23.1 'Wages will be paid...according to the actual hours worked each week or fortnight...' The FWO says that those words show that cl 23.1 is not just about the timing or periodicity of the payments but about what is to be paid, that is to say, wages calculated 'according to the actual hours worked'.
If this is correct - and Coles submits that it is not - it will entail that in addition to the primary contravention constituted by the failure to pay a particular entitlement in a given pay cycle under the Award - there will be a secondary contravention at the end of each pay cycle when Coles fails to pay on the pay day specified in cl 23.2 the full amount of the entitlements due to the employee for that pay cycle.
There are some points to make about this debate.
The first is that this issue is probably irrelevant to any issue of compensation under s 545(2)(b). If the employee has been underpaid in a pay cycle under cl 29.2(a) then he or she may well be entitled to be compensated for that under s 545. But it is difficult to see that he or she will be entitled to any more compensation just because the same amount was also not paid under cl 23.1.
It follows that the FWO's contentions are likely limited in their relevance to the question of an appropriate civil penalty and, more proximately, to ascertaining the number of contraventions.
Secondly, in terms of assessing any relevant penalty, it is quite likely that any additional alleged contravention of cl 23.1 is likely to have little impact on the size of that penalty. For example, any additional contravention of cl 23.1:

[483]

The situations in (a) and (b) are governed by cl 23.3. The situation in (c) is governed by cl 23.1.
Coles draws attention to the fact that the payments contemplated by cl 23.3 are not subject to the same requirements as they are in cl 23.1. To be specific, there is missing from cl 23.3 any requirement that the wages be paid 'according to the actual hours worked'. Thus, Coles submits that, whatever those words do in cl 23.1, any such effect is missing from cl 23.3.
I would reject Coles' submission about this because it generates an unacceptably anomalous operation for cl 23.3 in the case of employees who are classified at or below level 3. Clause 23.3 requires that these employees must be paid on a fortnightly or weekly basis. But, unlike cl 23.1, it imposes no obligation upon a retailer that they should be paid 'according to the actual hours worked'. If Coles' submission is correct then it would appear that employees who have always been paid on a weekly or fortnightly pay cycle must be paid 'according to the actual hours worked' (under cl 23.1) but employees who were paid on a monthly basis prior to 1 January 2010 but who are classified at level 3 or lower must be paid on a weekly or fortnightly basis but this need not be 'according to the actual hours worked'. This anomalous outcome arises because these employees are only subject to a weekly or fortnightly pay cycle by force of cl 23.3 and the words 'according to the actual hours worked' are missing from cl 23.3.
The anomaly can be avoided by reading cl 23.3 as a proviso to cl 23.1. Once that position is reached, the payments it is referring to are the same as the payments referred to in cl 23.1. As such, those payments are subject to the same limitations as those in clause 23.1 and, in particular, must be paid 'according to the actual hours worked'.
The consequence of this is that whilst Coles is correct that its situation is governed by cl 23.3 this does not entail that the words 'according to the actual hours worked' are not to be applied. The question then becomes whether those words have the effect for which the FWO contends (and Coles denies).

[520]

It therefore appears not to be in dispute between the parties that the Court should not determine Mr Baker's time and attendance claims, as such, in the initial trial of the class action but rather at some subsequent hearing. Further, the parties appear to agree that in the regulatory action Mr Baker's position should be approached on the basis that he worked the hours which are recorded in his clocking records.
However, the routes by which the parties arrive at this position are different. Mr Baker seeks in the regulatory action to take advantage of Woolworths' agreement that where clocking records are available they should be used to determine the hours worked by an employee. Since Mr Baker's clocking records are available, so it goes, they should be used to determine the hours worked by Mr Baker.
This sounds straightforward. However, a complexity arises from the fact that Mr Baker gave evidence both for the FWO in the regulatory action and also on his own behalf in the class action. Part of his evidence was to the effect that he clocked on and off randomly so that the clocking records are of no use in calculating his actual hours of work. Leaving aside some detail for now, Woolworths cross-examined Mr Baker very extensively on his evidence including as to his credit. Woolworths now submits that Mr Baker's evidence should not be accepted in general and that his evidence that his clocking records were the result of random activities on his behalf should also not be accepted.
If Mr Baker's evidence that his clocking records were randomly entered by him were accepted this would have a significant implication. It would mean that despite Woolworths' agreement that where clocking records were available they should be used to determine hours worked, in Mr Baker's case it would be obvious that his clocking records were not in fact accurate. The consequence of that would be Mr Baker's entitlements in the regulatory action would be calculated off the roster records (as discussed above).
Both Mr Baker and Woolworths therefore wish to see Mr Baker's entitlements in the regulatory action determined on the basis of his clocking records. It will now be apparent that Mr Baker seeks to do so via Woolworths' general agreement that the clocking records are the most reliable records and to ignore his own evidence that his clocking records were not accurate. Woolworths seeks to get to the same position by inviting the Court to conclude that Mr Baker is not a reliable witness and therefore rejecting his evidence that his clocking records are not accurate.
Mr Baker now submits that the Court should not make any adverse findings about him since it may impact on the future course of the class action. One obvious concern could be that if the Court now makes adverse credit findings about Mr Baker (and concludes that his clocking records are accurate), there may be a prejudgment issue when the Court at a subsequent hearing comes to assess the reliability of his evidence that he worked longer hours that those disclosed in the clocking records.
On the other hand, there is no doubt that it was Mr Baker, in the initial trial, who introduced the entire topic of whether he had worked more than the hours recorded in his clocking records and that those records were random (and hence inferentially unreliable). That evidence then elicited from Woolworths a determined attack on Mr Baker's credit.
If those credit issues are not resolved now they will be resolved in the future in two possible ways. First, they could be resolved at the subsequent hearing when Mr Baker's time and attendance claims are actually resolved (including all issues of credit). The difficulty with that approach is that by the time I come to write any judgment in the matter it will have been several years since I saw Mr Baker give his evidence. That creates the possibility that a submission will be made that any advantage enjoyed me as a trial judge viz a viz an appellate court will have been lost.
On the other hand, if I determine the issue of his credibility now (in the course of determining the more limited issue of whether his clocking records are reliable) then I run the risk that Mr Baker or Woolworths will submit at the subsequent trial that I have prejudged his credibility.
Having considered the matter, I have concluded that the least risky path is not to determine Mr Baker's credibility in this initial trial. No doubt, when the time comes for the issue of Mr Baker's credibility to be assessed, a considerable period will have by then passed. That is something which will need to be borne in mind in preparing any reasons for judgment.
In that circumstance, the appropriate course is not to embark upon any consideration of Mr Baker's credit and to accept that his hours of work should be determined from his clocking records.

[525]

Ms Pabalan's contract of employment was dated 14 June 2016 and effective from 11 November 2016. She was contracted to work 40 hours per week and was rostered on a 6-day, 4-day alternating roster. Ms Pabalan was generally rostered on to work every day except Friday in the first week and Monday, Wednesday, Thursday and Friday in the second week. Her original agreed rostered hours were from 8am to 5pm. Ms Pabalan was in charge of about 50 to 70 staff in the customer service department. On a daily basis, the number of staff she supervised fluctuated from between 1 to 10. According to her manager, Mr Cruickshank, Ms Pabalan's role was to be in charge of the customer service department, i.e., the checkout and tobacco section.
She was provided with a list of tasks which it was her responsibility to ensure were performed each day. She also received additional tasks through a messaging system. An important task of Ms Pabalan's as a manager was the preparation of the rosters for the staff who she managed as well as her own roster. Her manager, Mr Cruickshank, observed that these tasks, including the drawing up of the rosters, could be delegated to other staff members so long as they were suitably qualified. Although Mr Cruickshank did not actually say this, I would infer from this aspect of his evidence that, generally speaking, it was not generally possible for Ms Pabalan to delegate her function of drawing up the rosters.
Ms Pabalan said that doing the rosters took her two hours each week and that she spent another one to two hours adjusting them. For his part, Mr Cruickshank could not see how this much time could have been needed. The base rosters were already in the system for the full time and part time employees and all that should have been involved for Ms Pabalan was really just the filling out of the rosters for the casual employees. Mr Cruickshank thought that this ought to have taken Ms Pabalan a maximum of 1.5 hours each week to do together with maybe five minutes each day to update them. It was his view that Ms Pabalan had sufficient hours in her roster to permit her to perform these functions.
There were a number of other areas of disagreement between Ms Pabalan and Mr Cruickshank. For example, Ms Pabalan said that Mr Cruickshank had told her that she needed to work every public holiday unless the store was closed and even if the day in question was not a day upon which she was usually rostered on to work. Ms Pabalan also made this claim in relation to most of the other stores at which she worked. I resolve this issue below.
Ms Pabalan accepts that her roster records are useful to the extent that they show upon which days she worked but that they do not reflect her hours of work accurately. She says the actual hours she worked were the hours she was told to work by the store manager.
In the third week of her employment, she says that she was told by her store manager, Mr Cruickshank, that she could not leave until she had checked in with him and everything was '100%'. Mr Cruickshank agrees that he did ask managers to check in with him before they left. He did not think that he would have told her than all her tasks needed to be completed before she left. This was because many of the tasks were not time critical on a particular day. He did agree however that business critical tasks would need to be completed before Ms Pabalan left for the day.
Ms Pabalan also says that she was told that she should be serving customers most of the time. Mr Cruickshank does not recall telling Ms Pabalan this and says that it would not have been his practice. On the other hand, he does accept that Ms Pabalan was required to prioritise serving customers over other tasks and that she would, in consequence, have been in the service area most of the time unless was doing a task which required her to be elsewhere (or on a break). Mr Cruickshank also accepted that sometimes there was an event known as a 'priority one' in which everyone had to work in the service area because there too many customers waiting for the registers. There was similar evidence in relation to an event known as a 'rumble'.
Ms Pabalan's explanation for why she was always serving customers was because Coles did not maintain a sufficient number of staff to permit the work to be done. The consequence of this was that she was not able to prepare the rosters within her rostered hours. Mr Cruickshank did not agree with this.
Ms Pabalan also says that she was told by Mr Cruickshank that her department was over the allocated number of hours and that she needed to cut back hours worked by her department. Mr Cruickshank does not recall this.
In April 2017, a new rostering system called OneTeam came into effect. The system displayed the staffing budget, expected customer sales and how many people should be rostered on for each 15 minute interval using a red line graph. This was called 'the shape'. Ms Pabalan was not permitted to have more people rostered on than was permitted by the shape. Mr Cruickshank did not recall this but pointed out that sometimes departments were permitted to exceed their budgets.
Ms Pabalan observed that a difficulty with OneTeam system was that it did not permit the rostering of 15 minute paid tea breaks. This increased Ms Pabalan's administrative burden because she had to ensure that her staff took their breaks. Another implication was that, for example, if there were four people working, effectively an hour of working time was lost (4 x 15") which did not appear in the roster. This was an example of a general theme in Ms Pabalan's evidence that Coles ran the store in a fashion which was understaffed. Other, similar problems, arose from OneTeam. However, I do not think they are material to the central issues which currently arise.

[540]

My impression of Ms Pabalan's response when she gave it was that she was endeavouring to give her evidence honestly and as best she could. Nevertheless, it is difficult to accept that she did not take time off in lieu in situations other than where she worked public holidays. Ms Pabalan gave various explanations in each case but none of these had been mentioned in her affidavits.
As with her evidence about public holidays, my impression is that the realities of the situation are more complex than Ms Pabalan's affidavit suggests. I am satisfied that, contrary to her evidence, Ms Pabalan did not work on every public holiday and I am also satisfied that she did indeed take days off in lieu.
In the same vein, Ms Pabalan also gave very general evidence about her days and hours of work. For example, at [24] of her first affidavit she gave evidence that from her second month of employment at the Miranda Store, she generally kept working on each shift past her rostered finishing time of 5 pm until between 7 pm and 8 pm so as to complete her duties. At [25] she then said that in her third month she started work early between 5 am and 6 am every Monday and Friday and on other days she started at 6 am. She was also taken to other examples where her evidence about her days and hours of work was expressed in these general terms.
However, her mobile records showed that, whilst the general statements were true sometimes, there were many days where they were not. Ms Pabalan, to her credit, accepted that the accuracy of her mobile phone records over her own recollection: T802.1-3.
Again, I accept that this aspect of Ms Pabalan's affidavit evidence was an honest attempt on her part to describe with as much precision as possible just what her days and hours of work were. However, this evidence was prepared long after events which were inherently monotonous and without the benefit of independent records. And, as I have said, it was prepared in circumstances where it is not difficult to see why Ms Pabalan might not have regarded her relationship with Coles as having been a positive experience for her. However, it is clear from her mobile phone records that her general evidence about her days and hours of work is often enough not correct at the granular level.

[549]

Ms Pabalan was employed at the Roselands store pursuant to a contract under which her salary was $70,000. There are two significant differences between the situation at Roselands and that at Miranda.
The first is that there was a different store manager, Mr Con Liveris. Unlike Mr Cruickshank, there were aspects of Mr Liveris' evidence that were difficult to accept. He was cross-examined about an exchange of text messages with Ms Pabalan at 8.16 pm on 20 March 2018 which concerned rostering arrangements for another staff member. Ms Pabalan informed Mr Liveris that she had altered the roster. Mr Liveris responded 'Thanks'. Under cross-examination Mr Liveris said that by the word 'thanks' he was expressing his surprise at her being at work so late; that he had intended by the use of the word 'thanks' to convey that she should go home; and, that he had an actual recollection of this text exchange.
It was an important aspect of Mr Liveris' evidence that he rejected any suggestion that Ms Pabalan was working long hours. The answers given by Mr Liveris about his use of the word 'thanks' are consistent with that aspect of Mr Liveris's evidence. However, I do not accept Mr Liveris's evidence about what he meant by the word 'thanks' which is contrary to ordinary English and, with respect, not plausible. I also do not accept that Mr Liveris has any recollection of a text message sent 5 years earlier in a work context concerned with the roster of a single member of Mr Liveris' (large) workforce. This evidence was implausible. These matters persuade me that I should approach the evidence of Mr Liveris with considerable caution.
Despite the frailties of the evidence of Mr Liveris, the same problem arises in relation to Ms Pabalan's evidence as arose in the case of the Miranda store. Whilst I am satisfied on the balance of probabilities that in principle her broad claims are correct I am unable to ascertain the precise elements of her claims. I therefore make the same findings as I made in relation to the Miranda store in relation to the Roselands store. She is entitled to the clothing allowance for the items at [89](a), (b), (c) and (e) of her first affidavit. She is not entitled to the items claims at [89](d) or the suits referred to at [91]. She is entitled to the laundering allowance.
The second matter is that Ms Pabalan continued not to clock until the end of October 2017. According to Ms Pabalan she received an employee ID to clock on and off only in November 2017. She says that she clocked on and off inconsistently. She also gave evidence that she saw the store support manager, Gary Ackroyd, adjusting her recorded time and attendance data to match the roster records. On this basis, Ms Pabalan did not think that Coles' clocking records from October 2017 were reliable. Ms Liveris offered no evidence about this and Mr Ackroyd was not called as a witness. In the circumstances, I accept Ms Pabalan's evidence about this. I conclude that clocking records at Roselands are not generally reliable.

[563]

The fact that the employee is entitled to one hour of overtime under via cl 27.3(a) but three hours of overtime via the spread of hours in cl 27.2(a) cannot have the effect that the employee receives only one hour of overtime. I accept of course (and I did not apprehend it to be in dispute) that the employer does not have to pay overtime cumulatively where this kind of overlapping occurs.
The fact that the parties agreed that this was so caused them not to inquire into why it was true and this, in turn, engendered shared misconceptions about the present issue. Why is overtime not cumulative once arising from more than one clause? Because once cl 29.2(a) is enlivened at a particular point in time on a day, all further work done after that time will be at overtime rates. That a subsequent overtime trigger also occurs (in the example above, event (b)) has no legal consequences because the employer was already bound to pay overtime at that point in time because the event (a) had already occurred.
It was in that context, that the parties debated what order the overtime provisions were to be applied. It will follow from what I have just said that this is misconceived. Clause 29.2(f) requires overtime to be calculated on a daily basis. The overtime entitlements are to be calculated on the basis that on any given day overtime is payable under cl 29.2(a) from the time at which any overtime trigger is enlivened on that day.
In the example above there were two intra-day triggers: one at 9 pm and one at 11 pm. In other cases, the doing of any work on a particular day will trigger an entitlement to overtime. Examples of day triggers of this kind can be found in cll 28.11 and 28.5. Where these whole day rules are breached that will occur on the day that breaches of those clauses becomes unavoidable. Once that position is reached all work done after that time will be done at overtime rates. To return to the example of cl 28.11 (two consecutive days off each week or, if not, three consecutive days off per fortnight), compliance with it will become unavoidable only when:

[608]

(a) Full Clocking Records Available. Where there is a complete clocking record on a day (i.e. both a clock-in and clock-out time), the employee is taken to have worked that day for the duration of the clocking period less one hour for an unpaid meal break. This is so regardless of whether the employee was rostered or not. Coles agrees with this approach.

(b) Single-sided Clocking. If there is only a clock-in time the employee is taken to taken to have completed their shift at their rostered end time, or if not rostered, 9 hours after their clock-in time. Correspondingly, if there is only a clock-out time, the employee is taken to have commenced their shift either at the rostered start time or, if not rostered, 9 hours before their clock-out time. Coles in part disagrees with this approach. Where the FWO uses the available start or finish times in the roster to determine the missing clock-in or clock-out time, Coles suggests that it would be more sensible to use the shift length implied by the roster and to determine the missing clocked time in that fashion.

(c) Roster Record Only. Where there is only a roster record and no clocking data or record of leave, the employee is taken to have worked the rostered day and the hours they were rostered to work. Coles agrees with this approach.

(d) No clocking data and no roster record. The employee is taken not have worked for that day. Coles agrees with this approach.

(e) Situations where in a roster cycle there are clocking records available but they do not account for the whole cycle. The FWO's position is that the employee should be taken to have worked on the number of shifts obtained by summing the number of shifts implied by the clocking records with the number of shifts implied by the roster records. Coles accepts this in principle but says that the number of shifts thereby derived should not exceed the number of shifts in the roster. The same debate occurs at the level of hours. Although neither party really explained this, I took the FWO's position to be that the hours worked by an employee would be taken to be the number of hours worked as revealed by the clocking records added to the number of hours of work in the roster. I take Coles' position to be that this is acceptable but should be subject to a cap consisting of the total number of hours of work appearing in the roster.

(f) Public holidays and annual leave. In the situations arising in (e), Coles also seeks to have deducted from the number of shifts in a fortnight any days on which a public holiday fell or on which leave was taken. It was not clear to me what the FWO's position on this issue was. For the reasons I give below I prefer Coles' position.

[625]

He then subtracted 8.043 from 9.099 to arrive at the conclusion that the clocked shifts were 1.06 hours longer than the rostered shifts. It will be observed that Mr Klousia did not try to connect any given clocking record with a given roster record. Rather the approach was global and involved dumping all of the records into an unalloyed mass and performing the bulk calculation in the table.
Mr Klousia also assumed that overtime was not triggered merely because an employee worked outside their rostered shift but instead approached the matter on the basis that overtime was triggered when they worked in excess of those hours. It will be recalled that earlier in these reasons I have rejected the FWO's submission that overtime was triggered merely by working outside roster hours. Mr Klousia's assumption is consistent with that conclusion.
The only controversy concerns one of the filters applied in Mr Klousia's second step, known as the 7.75 hour filter. This filter excluded from the data any shift which was less than 7.75 hours in duration. Mr Klousia's reason for this in his initial evidence was that he did so in order to exclude part-time employees. In his subsequent evidence he changed his position on this. His final position was that he thought it appropriate to exclude shifts below 7.75 hours because they were anomalous for the salaried employees whose typical shift pattern was 8 hours. He thought the anomalies would include part-time employees who tended to work shorter shifts but also the effects of public holidays and split shifts.
This makes no sense to me and I do not understand it. The task at hand it to determine what the average number of overtime hours for those employees for whom there are both roster records and complete clocking records. A large proportion of these will be standard 8 hour shifts. But there will be employees who worked shorter and longer shifts than 8 hours. Since the apparent task is to calculate the average overtime worked by employees for whom there are clocking and roster records, I do not understand why shifts of any particular length should be removed from the data set.
Mr Klousia thought they were to be removed because they were anomalous. They are certainly anomalous in the sense that employees working less than 8 hours were not the usual situation. But I do not see why that kind of anomaly means that the overtime behaviour of employees working shifts shorter than 7.75 hours are to be ignored. Presumably, employees who worked shift of more than 8 hours are just as anomalous under Mr Klousia's approach, but he did not suggest that their shifts should be removed from the data set. Further, as Ms Friend points out, the 7.75 hour filter tends to remove from the data set shifts where no overtime had been worked and therefore has an upward effect on the average figure.
I therefore agree with Ms Friend that the 7.75 hour filter is not appropriate. When Ms Friend removed the 7.75 hour filter and carried out the same calculation as Mr Klousia had above, the figure she arrived at was 0.87. I have set out Mr Klousia's method of calculation above.
I have emphasised that Ms Friend carried out the same calculation as Mr Klousia to dispel the FWO's criticism that Ms Friend had used the concept of negative overtime in her approach. When calculating the 0.87 figure, Ms Friend did not use a concept of negative overtime. She merely took the roster shift records and clocking records and performed the same calculation as Mr Klousia did. The only difference was that she did not apply Mr Klousia's 7.75 hour rule to the data set.
It is true that she did refer to a concept of negative overtime in her (now irrelevant) debate with the FWO's witness Mr Kemp illustrated in Table 2.2 in the Joint Expert's Report dated 24 May 2023. But that table has nothing to do with the number 0.87 Ms Friend derived using Mr Klousia's method (without the 7.75 hour filter). It is thus not necessary to enter upon the debate between the FWO and Coles about whether negative overtime is appropriate given that negative overtime has nothing to do with the manner in which Ms Friend derived the 0.87 figure.
For completeness, I do not think that the position of full-time and part-time employees should be distinguished.
I find that:

[685]

These reasons are sufficient for the very large number of questions posed by the parties to be answered although in some cases the answer will be that the question does not arise. I do not think however that their efforts should be directed at answering those questions based on my reasoning. The parties' conflicting lists of issues have been a distinct hindrance in this litigation and it were best if perhaps the Full Court were not troubled by them. Rather, the parties should now do what I have indicated at the start of these reasons which is to identify for each conclusion a person for whom that conclusion has a concrete effect. There need only be a single such effect, i.e., the fact may be as narrow as the overtime entitlement on a single shift.
Subject to the views of the parties, the course I would propose to take is that once one such person is identified for each issue I have resolved, I will make appropriate declarations in respect of that person and their relevant entitlement. I do not see that there can be any disagreement about facts of this kind. That being so, the parties should agree the terms of the declarations. Those declarations will then provide a clear platform for any appeals or cross-appeals.
There will of course be other issues about the future conduct of the proceedings. These can be discussed at a case management hearing on Monday 27 October 2025 at 9.30am.
I would make these final observations. The conduct of two regulatory actions which are partially representative in nature alongside similar but not identical class actions raises unique procedural challenges. Whilst I would not wish to definitive about how litigation of this kind might be handled in the future I am confident that they should not be handled the way these four cases were. What the parties in this case substantively wanted was the resolution of construction issues in the Award. There should never have been sample employees. The construction issues should have been identified in a single list and facts should have been agreed about actual employees which made those questions real. No attempt should have been made to move beyond the construction issues. Had that been done, the case would have been heard much faster and judgment delivered more quickly. Armed with what the Award meant, the parties could coherently have moved to questions of quantification. By permitting quantification into the picture, the proceedings became unacceptably complex. This should not be done again.

Fair Work Ombudsman v Woolworths Group Limited; Fair Work Ombudsman v Coles Supermarkets Australia Pty Ltd; Baker v Woolworths Group Limited; Pabalan v Coles Supermarkets Australia Pty Ltd [2025] FCA 1092

At a glance

Court

Decision date

Before

Source

Judgment (686 paragraphs)

Legislation Cited (5)

Cases Cited (4)