Fair Work Act 2009

s.602 - Application to correct obvious error(s) etc. in relation to FWC's decision

"Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU); Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia,

Application to correct obvious error(s) etc. in relation to FWC's decision

• [1] On 17 May 2024, I determined a dispute about calculating annual leave for shift workers covered by the Manildra Bomaderry Site Agreement 2022 (the Agreement) under s.739 of the Fair Work Act 2009 (the Act) (the Decision[1]).

• [2] Manildra Energy Australia Pty Ltd (Manildra) has applied under s.602 and s.603 of the Act for the Commission to correct an obvious error, defect or irregularity in the Decision or to vary the Decision on discretionary grounds. The applications are resisted by the "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU) and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU). Separately, the AMWU and the CEPU have applied for permission to appeal the Decision on matters that do not strictly arise in the application before me, although there appears to be some overlap in relation to the impugned text of the Decision (ground 3 of the Notice of Appeal).

• [3] I have decided to vary the Decision to correct an obvious defect. These are my reasons.

• [4] Section 602 of the Act deals with correcting obvious errors, defects or irregularities in relation to decisions of the Commission. It provides:

"(1) The FWC may correct or amend any obvious error, defect or irregularity (whether in substance or form) in relation to a decision of the FWC (other than an error, defect or irregularity in a modern award or national minimum wage order).

Note 1: If the FWC makes a decision to make an instrument, the FWC may correct etc. the instrument under this section (see subsection 598(2)).

Note 2: The FWC corrects modern awards and national minimum wage orders under sections 160 and 296.

(2) The FWC may correct or amend the error, defect or irregularity:

• [5] Section 603 of the Act provides for the variation or revocation of Commission decisions. It provides:

"(1) The FWC may vary or revoke a decision of the FWC that is made under this Act (other than a decision referred to in subsection (3)).

Note: If the FWC makes a decision to make an instrument, the FWC may vary or revoke the instrument under this subsection (see subsection 598(2)).

(2) The FWC may vary or revoke a decision under this section:

(ii) if the kind of decision is prescribed by the regulations--a person prescribed by the regulations in relation to that kind of decision.

(3) The FWC must not vary or revoke any of the following decisions of the FWC under this section:

(a) a decision under Part 2-3 (which deals with modern awards);

(b) a decision under section 235 or Division 4, 7, 9 or 10 of Part 2‑4 (which deal with enterprise agreements);

(c) a decision under Part 2‑5 (which deals with workplace determinations);

(d) a decision under Part 2‑6 (which deals with minimum wages);

(e) a decision under Division 3 of Part 2‑8 (which deals with transfer of business);

(f) a decision under Division 8 of Part 3‑3 (which deals with protected action ballots);

(g) a decision under section 472 (which deals with partial work bans);

(h) a decision that is prescribed by the regulations.

Note: The FWC can vary or revoke decisions, and instruments made by decisions, under other provisions of this Act (see, for example, sections 447 and 448)."

• [6] The impugned text of the Decision is found in paragraph [4], reproduced in full below:

"[4] The questions for determination, and my answers, are these:

Question 4(a): How is the rate of pay for annual leave calculated pursuant to clause 32.3.1(a) of the Agreement?

Answer: The rate of pay for annual leave in clause 32.3.1(a) of the Agreement is calculated by following these steps:

Step 1: Calculate gross annual earnings for the previous financial year and deduct any amounts paid as annual leave, cashed in RDOs, cashed in annual leave, sick leave bonus payments and any other "extraordinary payments".

Step 2: Deduct the number of weeks of annual leave taken by an employee in the previous financial year from 52.

Step 3: Divide the amount calculated in Step 1 by the number of weeks calculated in Step 2.

Step 4: Divide the amount calculated in Step 3 by 38. This gives an averaged gross hourly rate.

Step 5: Calculate the loaded classified rate in accordance with clause 32.3.1(b) (see answer to Question 4(c) below).

Step 6: Compare the hourly rates ascertained by Steps 4 and 5. The higher of the two is the hourly rate of pay for annual leave. Use this rate for single days of annual leave.

Step 7: Multiply the higher rate of pay (see Step 6) by 38 to obtain the weekly rate of pay for annual leave. Use this rate for one-week blocks of annual leave.

Question 4(b): How is the rate of pay for annual leave calculated pursuant to clause 32.3.2(a) of the Agreement?

Answer: The rate of pay for annual leave in clause 32.3.2(a) is calculated by following these steps:

Step 1: Add the amounts the employee would have been paid if they had worked during the period of their annual leave, including:

1. all‑purpose allowances,
2. loadings paid for all purposes of the Agreement,
3. penalties paid for all purposes of the Agreement,
4. first aid allowance, and
5. any other wages payable under the employee's contract of employment for work in the period of annual leave.

Step 2: From the amount calculated in Step 1, deduct any overtime that would have been worked in the same period (but do not deduct rostered overtime that forms part of the shift worker's ordinary 12‑hour shift roster).

Step 3: Compare the amount calculated in Step 2 with the rate calculated in accordance with clause 32.3.2(b) (classified rate multiplied by 128% multiplied by the number of rostered working hours in the annual leave period) (see answer to Question 4(d) below). The higher of the two amounts is payable for the annual leave period.

Question 4(c): How is the rate of pay for annual leave calculated pursuant to clause 32.3.1(b) of the Agreement?

Answer: Multiply the employee's "classified rate" by 128%. To enable an appropriate comparator with the rate of pay in clause 32.3.1(a), use the hourly "classified rate" for the employee.

Question 4(d): How is the rate of pay for annual leave calculated pursuant to clause 32.3.2(b) of the Agreement?

Answer: Multiply the employee's "classified rate" by 128%. To enable an appropriate comparator with the rate of pay in clause 32.3.2(a), use the classified rate that corresponds to the amount of leave taken. That is, for a single day of leave, use the hourly classified rate. For a one‑week block of leave, use the weekly classified rate.

Question 5: In determining the amount to be paid to a shift worker under each of the clauses referred to above for annual leave taken, does clause 32.6 require the rate payable to be multiplied by 54 or 38?

Answer: Neither. Clause 32.6 does not contain a relevant multiplier. The rate of pay for annual leave is prescribed by clause 32.3."

• [7] It is the last three words of the answer to Question 4(d) above that Manildra seek to correct or vary. Specifically, Manildra seek that the words "weekly classified rate" be replaced with the words "hourly classified rate multiplied by 38". Manildra submits that this would give effect to the agreement reached between the parties on the day of hearing of the substantive dispute about how the words "classified rate" would be applied for the purpose of the Agreement. In short summary, the parties agreed that Manildra would treat "classified rate" as the rate under the column titled "hourly rate" as contained in the relevant and applicable wage tables in Appendix D and E to the Agreement. It is uncontroversial that the hearing proceeded on this basis.

• [8] The AMWU and the CEPU oppose any correction or variation of the Decision in the context of the present applications. They submit that if there is error in the Decision, it is an error of reasoning rather than an inadvertent error or one that should be corrected on discretionary grounds. They further submit that Manildra is seeking to relitigate its case because it does not agree with the Decision, and that the appropriate forum for it to do so is by way of an appeal or cross-appeal.

• [9] I am persuaded that the answer to Question 4(d) is affected by an obvious defect. The defect becomes apparent when regard is had to the answer given to Question 4(b) of the Decision (also in paragraph [4]).

• [10] Question 4(b) was answered by a three‑step process, and the third step was described as follows:

"Step 3: Compare the amount calculated in Step 2 with the rate calculated in accordance with clause 32.3.2(b) (classified rate multiplied by 128% multiplied by the number of rostered working hours in the annual leave period) (see answer to Question 4(d) below). The higher of the two amounts is payable for the annual leave period."

• [11] As can be seen, the answer to Question 4(d) is embedded in the answer to Question 4(b). After referring to clause 32.3.2(b), the relevant rate was found to be calculated as "classified rate multiplied by 128% multiplied by the number of rostered working hours in the annual leave period".

• [12] The same level of precision does not appear in answer to Question 4(d), and the choice of words implies more than one type of "classified rate" for the purposes of the Agreement. When regard is had to the answer to Question 4(b), however, it is plain that reference to "weekly classified rate" in relation to Question 4(d) is short‑hand for the answer given in relation to Question 4(b), as adjusted for the scenario of a one-week block of leave. This observation is reinforced by the fact that not all classifications have a relevant "weekly" rate of pay in the wage tables in Annexures D and E to the Agreement.

• [13] Although I agree that the Decision is affected by an obvious defect in this respect, I do not agree with the proposed solution put forward by Manildra. As stated at paragraph [24] of the Decision, the rate at which annual leave is to be paid for shift workers does not rely on the concept of a 38‑hour week and looks instead to what employees work and earn on the shift work roster.

• [14] In the circumstances, it is appropriate to correct the Decision under s.602 of the Act to remove any uncertainty resulting from two differently worded answers to the same question.

• [15] An order (PR778009) is issued separately to this Decision.

R Gall of Counsel for Manildra Energy Australia Pty Ltd.

[1] [2024] FWC 1294 (17 May 2024).

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