Fair Work Act 2009

s.604 - Appeal of decisions

Appeal against decision [2024] FWC 1706 of Commissioner Cirkovic at Melbourne on 12 July 2024 in matter number C2023/5155 - Interpretation of enterprise agreement - Where employees required to have clear break from work of 12 hours between shifts - Whether a 'shift' refers only to a period of ordinary hours and not a period of overtime - Where agreement provides for capacity to reduce duration of break from 12 hours to 10 hours by mutual agreement - Whether employees required to be paid at the appropriate overtime rate if a shorter break is agreed - Whether Commissioner erred in failing to consider industrial history - Decision of Commissioner correct - Permission to appeal granted - Appeal dismissed.

[1] Metcash Trading Limited T/A Metcash (Metcash or the appellant) seeks permission to appeal and to appeal from a decision of Commissioner Cirkovic made on 12 July 2024.[1] That decision arose from an application brought by the United Workers' Union (the UWU or the respondent) under s 739 of the Fair Work Act 2009 (Cth) (the Act) asking the Commission to deal with a dispute under an enterprise agreement.

[2] The dispute concerned the interpretation and application of the Metcash Trading Limited Victoria Perishable Warehouse Operations Enterprise Agreement 2022 (the Agreement). More specifically, the parties disagreed on the proper interpretation of clause 9.6 of the Agreement, which deals with breaks between shifts. The Commissioner ultimately identified two questions which were required to be answered in arbitration of the dispute. The two questions were in the following terms:[2]

1. Is Metcash required by clause 9.6(1) of the Metcash Trading Limited Victoria Perishable Warehouse Operations Enterprise Agreement 2022 to provide an employee with a clear break from work of 12 hours between shifts irrespective of whether the period of work is in excess of, or outside of, the ordinary hours of work prescribed by clauses 6(1), 6(2), 6(3), and 7 of the Agreement? (Question 1)

2. If the answer to question 1 is yes, is Metcash required by clause 9.6(3) to pay an employee at the appropriate overtime rate until they are given a 12-hour break, even if mutual agreement has been reached to reduce the break to a break of less than 12 hours under clause 9.6(2)? (Question 2)

[3] In the proceedings before the Commissioner, the parties filed an agreed statement of facts. Amongst other things, the agreed statement of facts recorded that Metcash has not provided overtime as part of an established rostering arrangement during the period of operation of the Agreement. Instead, overtime is performed on an ad hoc basis, as required and with the agreement of individual employees. The practice of Metcash was the same under the preceding two enterprise agreements.

[4] Although there was not clear evidence before the Commissioner in relation to the regularity or prevalence of the practice, it appears that Metcash has not necessarily ensured that all employees received a clear break of 12 hours between the conclusion of a period of overtime and the employee recommencing work. Since the dispute was first raised by the UWU in April 2023, Metcash has taken steps to ensure all employees receive a 12-hour break between two periods of duty, regardless of whether that duty is being performed as ordinary hours or overtime.

[5] The UWU submitted to the Commissioner that both questions identified above should be answered in the affirmative. It submitted that Metcash is required by clause 9.6(1) of the Agreement to provide a clear break of 12 hours between any period of work, whether it be ordinary hours or overtime. It further submitted that clause 9.6(3) of the Agreement requires that an employee be paid overtime rates in all circumstances in which he or she does not receive a 12-hour break, including a circumstance in which there is agreement to reduce the length of the break in accordance with clause 9.6(2).

[6] Metcash, on the other hand, submitted that both questions should be answered in the negative. It submitted that clause 9.6(1) operates only to limit the manner in which ordinary hours are to be worked and has no application in respect of overtime. It said that the word 'shift' only refers to a period of ordinary hours. With respect to Question 2, Metcash submitted that it is not required by clause 9.6(3) to pay an employee at overtime rates until they are given a 12-hour break if mutual agreement has been reached to reduce the break to a period of less than 12 hours under clause 9.6(2).

[7] The Commissioner largely accepted the submissions of the UWU and answered both questions in the affirmative. The Commissioner determined that the word 'shift' in clause 9.6(1) simply refers to a continuous period of work and not just rostered shifts of ordinary hours.[3] In relation to clause 9.6(3), the Commissioner concluded that, when an employee does not have a 12 hour break, Metcash is required to pay the appropriate overtime rate until an employee is given such a break, even in circumstances in which there is agreement to a break of less than 12 hours in accordance with clause 9.6(2).[4]

[8] Metcash seeks permission to appeal and, if permission is granted, to appeal from the decision of the Commissioner. For the reasons that follow, the construction adopted by the Commissioner is correct. Permission to appeal should be granted, but the appeal dismissed.

[9] The Agreement covers employees of Metcash employed in relevant classifications who perform work within Metcash's cold storage logistics operations in Victoria.[5] The only worksite where this work is currently performed is in Laverton North. The Agreement is to be read in conjunction with the National Employment Standards, but operates to the exclusion of the relevant modern award.[6]

[10] The parties referred to a number of provisions of the Agreement said to be relevant to the construction of clause 9.6. Clause 6 makes provision with respect to hours of work as follows:

The ordinary hours of work for day workers shall be an average of 38-hours per week over a four-week period, to be worked by means of four x 9.5-hour days:

(1) Between the hours of 06:00 and 17:00 Monday to Friday by employees employed before 11 May 1998; and

(2) Between the hours of 0600 and 1930 Monday to Saturdays in accordance with clause 8 by new employees employed on or after 11 May 1998.

(3) The maximum number of ordinary hours on any day or shift for all employees shall be nine and a half. The minimum engagement on any day or shift shall be four hours.

[11] Clause 7 deals with shift work. Clause 7.1 provides as follows:

(1) The Company may require any employee to perform his or her work in shifts, Monday to Friday worked as four x 9.5 hour days.

(2) The commencing and finishing times of shifts shall be fixed by the Company and shall not be altered except by one weeks' notice given by the Company.

[12] Clause 7.2 then defines an 'afternoon shift' and 'night shift' and prescribes the loadings to be paid with respect to an afternoon shift and night shift. Clause 7.3 provides that 'a paid meal break of thirty minutes shall be allowed to shift workers on all shifts to be taken as near as possible in the middle of the shift'.

[13] Clause 8 provides for work rosters. Clause 8.1 provides as follows:

(1) The work rosters selected by the present permanent employees namely Roster 1 to 5 and the current Monday to Friday 38-hour week roster, are accepted:

06:00 to 19:30 Monday to Saturday Day Shift (6 Day Roster)

20:00 to 07:00 Sunday to Saturday Night Shift (6 Day Roster)

[14] The critical provisions are found within clause 9 which has the heading 'Overtime'. Clause 9.1 makes general provision with respect to overtime as follows:

(1) For the purpose of this Agreement, all work performed in excess of or outside the ordinary hours of work prescribed by this Agreement or in excess of a part-time employee's agreed hours shall be overtime.

(2) Overtime shall be paid at the rate of time and a half the ordinary hourly rate for the first two hours and double the ordinary hourly rate thereafter.

(3) No employee shall be required to work more than 14 hours in any one day.

(4) No employee shall be required to work more than 12 hours overtime in any one week.

(5) For the purpose of calculating overtime, each day or shift worked will stand alone.

[15] Clause 9.2 then deals with weekend overtime. Notably, clause 9.2(3) provides that, for employees engaged as shift workers, 'a shift that finishes either after 01:00 on Saturday and/or before 21:15 on Sunday, will be paid at double time'. Clause 9.3 provides for work during meal breaks, clause 9.4 for time off in lieu of overtime and clause 9.5 with voluntary work on an RDO. Clause 9.6 is the provision at issue and provides:

(1) An employee shall have a clear break from work of 12 hours between shifts.

(2) An employee may by mutual agreement with the Company, return to work after a break shorter than 12 hours but not less than 10 hours.

(3) If an employee does not have a 12-hour break between shifts they shall be paid at the appropriate overtime rate until they are given that break.

[16] Finally, clause 12.1 makes provision for meal allowances in the event an employee works overtime. Clause 12.1(4) provides as follows:

• (4) A separate meal allowance must be paid where overtime is worked both before and after the employee's shift.

[17] The central provision at issue in the dispute is, obviously enough, clause 9.6. The other provisions set out above were referred to in the parties' submissions primarily to the extent that the parties claimed they assist in understanding what is meant by the term 'shift' as it appears in clause 9.6(1) of the Agreement.

[18] The notice of appeal contains four grounds of appeal. The grounds are as follows:

[A] plain reading of clause 9.6(1) clearly and inexplicably requires an employee to "have a clear break from work of 12 hours between shifts" irrespective of whether the "shift" is ordinary hours or overtime, and Question 1 is to be answered in the affirmative.

The Commission misconstrued the Agreement and erred in so doing.

b. The Commissioner erred at [35] by deciding to not have any regard to predecessor enterprise agreements to interpret the Agreement. In so doing, the Commissioner did not adhere to the required principles of interpretation of enterprise agreements.

c. The Commissioner erred at [36] by deciding that regard to the terms of predecessor enterprise agreements to interpret the Agreement, constituted reliance on "extrinsic material" and was not instead relevant material which identified the context and purpose of the disputed provision.

[63] On the basis of the material before me, I am satisfied that the Respondent is required by clause 9.6(3) to pay an employee at the appropriate overtime rate until they are given a 12 hour break, even if mutual agreement has been reached to reduce the break to a break of less than 12 hours under clause 9.6(2), and Question 2 is to be answered in the affirmative.

The Commission misconstrued the Agreement and erred in so doing.

[19] Grounds 1, 2 and 3 relate to the construction of clause 9.6(1) of the Agreement and ground 4 relates to the construction of clause 9.6(3). Grounds 2 and 3 allege errors in the approach adopted by the Commissioner to the task of interpretation and are related to ground 1 in that Metcash submits that the errors in approach contributed to the error alleged in the conclusion of the Commissioner as to the interpretation of clause 9.6(1).

[20] The ordinary position under s 604 of the Act is that a person aggrieved by a decision of the Commission may only appeal with permission. However, when dealing with a dispute pursuant to a dispute settlement procedure in an enterprise agreement, the Commission is acting as a private arbitrator. The nature and extent of the function to be undertaken by the Commission is dictated by the agreement of the parties, including the availability and nature of any appeal. The parties may agree that there will be a right of appeal or remove or modify the requirements ordinarily applicable to an appeal under s 604 of the Act, including the need for permission to appeal to be obtained.[7]

[21] Clause 38(4) of the Agreement provides as follows:

• (4) If the matter is still not settled it shall be submitted to the Fair Work Commission (FWC) for conciliation, failing which arbitration. FWC's decision shall, subject to any rights of appeal or review, be final and will be accepted by the parties. A matter before the FWC shall entitle the parties the right to be represented at all times.

[22] In our opinion, the reference to 'any rights of appeal or review' in clause 38(4) should be understood as referring to any right of appeal or review which the parties may have outside of the express terms of the agreement itself.[8] The clause does not confer an unqualified right of appeal, but refers to any right of appeal that would ordinarily exist with respect to a decision of the Commission. That is the appeal procedure in s 604 of the Act. An appeal under s 604 may only be brought with the permission of the Commission.

[23] Permission to appeal will not necessarily be granted in an arbitration undertaken under s 739 of the Act simply because a decision involves the interpretation of an enterprise agreement to which the correctness standard applies.[9] There may be good reason in a particular case not to grant permission to appeal. This may be so if, for example, the appeal lacks utility or the question at issue affects only an individual employee or a limited number of employees and insufficient doubt exists as to the correctness of the decision at first instance.

[24] In this matter, we are persuaded that permission to appeal should be granted. The appeal raises at least one issue in relation to the proper approach to the interpretation of an enterprise agreement. On one view of the decision, the Commissioner did not address the submissions advanced by Metcash concerning the history of the agreements applying at the workplace on the basis that the meaning of clause 9.6 is clear from a plain reading of the clause. The conventional approach to interpretation now requires context, including any relevant history of the instrument being construed, to be considered in the first instance and not only in circumstances in which the instrument is found to be ambiguous.

[25] That aspect of the Commissioner's decision justifies permission to appeal being granted to permit the Full Bench to consider whether the Commissioner's decision is correct.

[26] Ground 1 concerns the proper construction of clause 9.6(1) of the Agreement. Metcash contends that the Commissioner erred in concluding that the term 'shift' as it appears in clause 9.6(1) refers to any continuous period of work and not just rostered shifts of ordinary hours. Metcash submits that clause 9.6(1) only requires a clear break between rostered periods of ordinary hours. Metcash submits that the clause does not require a 12-hour break between periods of actual work undertaken by an employee, at least if the work involves a period paid at overtime rates.

[27] It is appropriate to start with the text of clause 9.6 itself. The language of clauses 9.6(1) and 9.6(2) do not, in our opinion, support Metcash's submissions. Clause 9.6(1) requires that an employee shall have a clear break 'from work' of 12 hours between shifts. Clause 9.6(2) provides that an employee may 'return to work' after a break of shorter than 12 hours by mutual agreement. The express provision that the 'clear break' which an employee must have is a break 'from work' and mutual agreement is required for an employee to 'return to work' after a shorter break supports the conclusion that the break is intended to be from the performance of work and not merely between rostered shifts of ordinary hours.

[28] That language cannot be reconciled with construing the word 'shift' in clause 9.6(1) of the Agreement as only referring to a period of ordinary hours. If Metcash's construction were correct, clause 9.6(1) would not ensure that an employee had a clear break of 12 hours 'from work' at all and an employee could 'return to work' after a period of shorter than 12 hours with or without mutual agreement (or, indeed, after a break of shorter than 10 hours). That outcome could arise whenever an employee performs work outside his or her ordinary hours and then recommences work without having a clear break of 12 hours.

[29] Metcash submitted that the construction adopted by the Commissioner gives the words 'between shifts' no work to do. It is ordinarily to be assumed that the framers of an instrument will not have intended for words included in the instrument to be ineffectual.[10] However, we do not accept the construction adopted by the Commissioner gives the words 'between shifts' no work to do. It is logical for the clause to refer to a break being between two events. In this case, the break is to be 'between shifts'. The question is what is meant by the word 'shifts' in the context of clause 9.6(1). Construing the clause as contended for by the UWU does not give the words 'between shifts' no work to do.

[30] A significant aspect of Metcash's case is the submission that the word 'shift' is used consistently throughout the Agreement to denote a period of work which includes ordinary hours only and this meaning should be applied in clause 9.6(1). In the context of statutory construction, it is generally presumed that a word or phrase has the same meaning throughout an Act.[11] However, even when the task involves the construction of a statute, the presumption is not difficult to displace and 'readily yields to the context'.[12] The presumption of consistency of meaning of the same word or phrase in a statute represents no more than a sensible working hypothesis which can be rebutted by context, purpose, or surrounding text.[13]

[31] An examination of how a word or phrase is used throughout an enterprise agreement may also assist, in some cases, when construing a particular provision. However, the presumption that words are used consistently throughout an instrument is likely to have less force in the case of an enterprise agreement than it will in relation to a statute. Enterprise agreements 'are not always drafted carefully by lawyers or professional drafters' and the framers of the agreement may not have paid attention to 'legal niceties and jargon'.[14] It is perhaps an understatement to say that the drafters of an enterprise agreement might not always pay scrupulous attention to consistency in the use of language.

[32] Enterprise agreements also are frequently an amalgam of language drawn from preceding agreements, a current or historical award or adopted from an employer's policies or procedures. Where that is the case, the language in a particular provision may reflect that adopted in the source document rather than rigorous adherence to consistency in language throughout the agreement. The text of an enterprise agreement may have evolved over successive rounds of bargaining with changes made to some terms which are in contest in the most recent bargaining exercise, but other terms 'rolled over' without regard being given to how the new and existing terms interact.

[33] We do not accept that the word 'shift' is used consistently in the Agreement to refer only to a period of ordinary hours. It is necessary to refer to a number of provisions of the Agreement to assess Metcash's submission in this regard. Clause 6 is entitled 'Hours of Work' but deals only with the number and pattern of ordinary hours. The first sentence of clause 6(3) sets the maximum number of ordinary hours on any 'day or shift' but does not necessarily mean that work on any day or shift is limited to ordinary hours. The second sentence of clause 6(3) in setting the minimum engagement on any day or shift omits any reference to 'ordinary hours' and arguably supports the view that reference to a 'shift' might include overtime because, otherwise, there would be no minimum engagement on an overtime shift. However, that clause is, in our opinion, neutral in relation to the question raised in this appeal. Metcash points out the minimum engagement periods for overtime or work on an RDO are dealt with in clauses 9.2(6), 9.5(2) and 10.3(3).

[34] In some clauses, the term 'shift' might be said to refer only to a period of ordinary hours. Clause 7.1 deals with the capacity of Metcash to require an employee to perform his or her work in 'shifts' and for the fixation of the commencing and finishing times of 'shifts'. That clause is consistent with the word 'shift' being used to refer to rostered ordinary hours. Clause 12.1(4) provides for a separate meal allowance 'where overtime is worked both before and after the employee's shift'. In the context of that clause, a distinction is drawn between the 'shift' and overtime.

[35] Other clauses use the word 'shift' in a manner that suggests it is not limited to a period of ordinary hours. Clause 7.2(2) prescribes the loadings to be paid for 'ordinary hours' on any afternoon or night shift and, when read in conjunction with clause 7.2(1), leaves open the possibility that a shift may include time which is not 'ordinary hours'. Clause 9.2(3) provides that 'a shift that finishes either after 01:00 on Saturday and/or before 21:15 on Sunday, will be paid at double time'. In our opinion, a 'shift' in that clause must refer to any period of work including overtime. If it were otherwise, an employee could be paid at a higher rate for ordinary hours than he or she would be paid for overtime on a shift within the time periods set out in the clause. That is unlikely to have been intended. It is also relevant that the provision is part of a clause which deals with weekend overtime.

[36] For those reasons, we do not believe that the term 'shift' is used consistently throughout the Agreement. Most critically, for the reasons we have explained, construing the word 'shift' in clause 9.6(1) to mean only a period of ordinary hours is incongruous with the text of clause 9.6 itself. The fact that the clause provides for a break 'from work' and for the break to connote a period prior to an employee's 'return to work' suggests that, in clause 9.6 at least, the term 'shift' includes all work and not only rostered ordinary hours. The other aspects of the Agreement referred to by Metcash do not dictate a different conclusion.

[37] Metcash also submits that a 'critical problem' arises from the Commissioner's construction which she ignored. It says that, on the Commissioner's construction, there is no mechanism to recognise ordinary hours not worked as a result of a 12-hour break being given following the performance of overtime. According to the submission, if clause 9.6 applies to overtime hours worked, the 12-hour break might lead to a shortfall in the requisite number of ordinary hours required to meet the definition of a full-time employee or the agreed pattern of work required for a part-time employee.[15] Metcash points out the modern award provisions requiring a minimum break after the performance of overtime commonly make provision for the impact on ordinary hours of affording the minimum break.[16]

[38] We do not accept that the problem identified by Metcash exists or provides a basis for construing clause 9.6(1) in the manner it contends. It is unclear why clause 9.6(1), as construed by the Commissioner, could cause a shortfall of ordinary hours of work. As the UWU submitted, if an employee recommences work to undertake his or her ordinary rostered hours of work without receiving a 12-hour break, that period of work remains part of the employee's ordinary hours. By reason of clause 9.6(3), the employee is entitled to be paid 'at the appropriate overtime rate'. The fact that the overtime rate is payable does not mean the period is not part of the employee's ordinary hours of work.

[39] If, on the other hand, an employee is directed not to attend for work for part of his or her rostered ordinary hours to ensure the employee receives a 12-hour break after working overtime, that period does not cease to constitute a period of ordinary hours. An employee who is directed to stay at home nonetheless earns wages even though he or she does not perform actual work.[17] Wages 'may be payable according to the terms of a contract of employment even though the employee is not called upon to, and does not, in fact, render service'.[18] A permanent employee generally remains entitled to be paid the amount due in respect of ordinary hours each week even if no work is available or the employer does not require work to be performed.[19] Accordingly, if an employee is directed not to attend work for a period of his or her ordinary hours, the employee is nonetheless providing the service the employer has required. Metcash did not explain why that period would not remain part of the employee's ordinary hours of work for the purposes of the Agreement and fulfilling the employee's obligations as a full-time or part-time employee. We believe it would.

[40] The text of the Agreement does not, in our opinion, support Metcash's submissions. The better construction is that a 'shift' for the purposes of clause 9.6(1) is simply any continuous period of work. However, before reaching a final conclusion in relation to the construction of clause 9.6(1) it is necessary to consider the submissions advanced by Metcash in relation to the history of the Agreement. That issue is addressed by grounds 2 and 3.

Grounds 2 and 3 - Predecessor enterprise agreements

[41] Grounds 2 and 3 contend that the Commissioner erred by deciding not to have regard to predecessor enterprise agreements to interpret the Agreement and in deciding that the terms of predecessor enterprise agreements constitute 'extrinsic material' rather than constituting relevant material which identifies the context and purpose of the disputed provision.

[42] Metcash submitted that, where a clause in an enterprise agreement 'is the product of a history, out of which it grew to be adopted in its present form, only a kind of wilful judicial blindness could lead the court to deny itself the light of that history, and to prefer to peer unaided at some obscurity in the language'.[20] It submits that the Commissioner's failure to properly engage with this well-established principle of construction was wrong and the Commissioner incorrectly ignored important context that supported Metcash's construction.

[43] The modern approach to statutory construction is that regard should be had to context and to purpose, whether or not there is some ambiguity to be resolved.[21] In SZTAL v Minister for Immigration & Border Protection [2017] HCA 34; (2017) 262 CLR 362, Kiefel CJ, Nettle and Gordon JJ explained (at [14]) (footnotes omitted):

The starting point for the ascertainment of the meaning of a statutory provision is the text of the statute whilst, at the same time, regard is had to its context and purpose. Context should be regarded at this first stage and not at some later stage and it should be regarded in its widest sense. This is not to deny the importance of the natural and ordinary meaning of a word, namely how it is ordinarily understood in discourse, to the process of construction. Considerations of context and purpose simply recognise that, understood in its statutory, historical or other context, some other meaning of a word may be suggested, and so too, if its ordinary meaning is not consistent with the statutory purpose, that meaning must be rejected.

[44] The same is true in relation to the interpretation of industrial instruments. The interpretation of an enterprise agreement 'turns upon the language of the particular agreement, understood in the light of its industrial context and purpose'.[22] In Amcor Ltd v Construction, Forestry, Mining and Energy Union [2005] HCA 10; (2005) 222 CLR 241, Kirby J described a contextual approach to the interpretation of a workplace agreement in the following way (at [66]) (footnotes omitted):

All of these are useful details of a background character. All are relevant in the construction of the Agreement's critical clause, the meaning of which is primarily in issue in these appeals (cl 55.1.1). In the interpretation of the Constitution and of legislation, Australian courts have passed beyond the age of the magnifying glass. No longer do courts (or industrial tribunals) seek to give meaning to contested language considered in isolation from the context in which the words are used and the purpose for which the words were apparently chosen. Nowadays, the same insistence on context, as well as text, permeates the approach to interpretation that is taken to legally binding agreements. Indeed, before this approach became normal in the courts, in the interpretation of contested instruments it was often the approach adopted for the construction of industrial texts. This was in keeping with an inclination of such tribunals towards practical, as distinct from purely verbal, constructions in that area of the law's operation.

[45] When engaged in the task of construing an industrial instrument, relevant context is not confined to the words of the instrument surrounding the expression to be construed.[23] It may extend to '... the entire document of which it is a part, or to other documents with which there is an association' and may include '... ideas that gave rise to an expression in a document from which it has been taken'.[24] However, the Commissioner was correct to observe that consideration of context cannot justify rewriting an agreement.[25] Context is to be considered as an aid to the construction of the text. Interpretation is always a text-based activity.[26]

[46] To the extent that the Commissioner suggested that it was unnecessary for her to consider Metcash's submissions in relation to the history of the Agreement and the source of the disputed term given her findings as to the text of clause 9.6,[27] that involved an error of approach. The context provided by the history of the Agreement and the content of the predecessor agreement was capable of being considered as part of the process of interpretation of the text of clause 9.6. Having said that, it not entirely clear that the Commissioner did disregard Metcash's submissions in relation to the operation of the predecessor agreement. The Commissioner went on to indicate that she was not 'prepared to draw the inferences urged by [Metcash] as to the operation of the 2019 Agreement and its application to the interpretative analysis before me'. Arguably, the Commissioner did consider the submissions made by Metcash.

[47] It is unnecessary for the Full Bench to resolve that question because we have considered for ourselves the submission advanced by Metcash arising from the history of the disputed provisions and the content of the predecessor agreement. We do not accept that the history supports Metcash's construction.

[48] Clause 9.6 of the Agreement is identical to clause 25.1 of the Metcash IGA Distribution Victoria Enterprise Agreement 2019 (the 2019 Agreement) aside from a change in the title of the clause and that the text has now been separated into subclauses. Metcash submits that the 2019 Agreement contained two sources of protection from insufficient breaks from work, the first in clause 25.1 of the 2019 Agreement itself and the second in clause 24.4 of the Storage Services and Wholesale Award 2010 (the Storage Services Award) which was incorporated by reference into the 2019 Agreement by operation of clause 4.1.

[49] Clause 24.4 of the Storage Services Award then provided as follows:

(a) Wherever reasonably practicable overtime will be arranged so that employees have at least 10 consecutive hours off duty between the work of successive days.

(b) Where an employee works so much overtime that there are fewer than 10 hours between finishing overtime on one day and commencing ordinary work on the next day, the employee will be released until the employee has had at least 10 consecutive hours off without loss of pay for ordinary working time occurring during such absence.

(c) If, on the instructions of the employer, an employee resumes work or continues work without having had 10 consecutive hours off duty, the employee will be paid at the rate of double time until released from duty and will then be absent until the employee has had 10 consecutive hours off duty without loss of pay for ordinary working time occurring during such absence.

[50] Metcash submits that clause 24.4 of the Storage Services Award clearly applied to the working of overtime and imposed a requirement for '10 consecutive hours off duty' where 'an employee works so much overtime that there are fewer than 10 hours between finishing overtime on one day and commencing ordinary work on the next day'. Metcash suggests that, having regard to this context, clause 25.1 of the 2019 Agreement must have been intended to cover a different area, namely, a rostering protection to ensure that ordinary hours are not rostered in a way that encroaches on a break of 12 hours.

[51] We do not accept that an inference should be drawn that clause 25.1 of the 2019 Agreement was intended to cover a different field to clause 24.4 of the Storage Services Award. Clause 4.1 of the 2019 Agreement provided that the 2019 Agreement was to be read in conjunction with the Storage Services Award in the following terms:

4.1 This Agreement shall be read in conjunction with the National Employment Standards (NES) and the Storage Services and Wholesale Award 2010 (the Award). In the event of any inconsistency between the terms of this Agreement and the terms of the Award, the terms of this Agreement shall prevail. In the event of any inconsistency between the terms of this Agreement and the NES, the NES shall prevail.

[52] As will be apparent, clause 4.1 provides that, in the event of any inconsistency between the 2019 Agreement and the Award, the terms of that Agreement were to prevail. The clause contemplated that the 2019 Agreement and the Storage Services Award might both deal with the same subject and do so in a manner that was inconsistent. There is no basis to infer that clause 25.1 of the 2019 Agreement and clause 24.4 of the Storage Services Award addressed different subjects. Viewed objectively, it is equally likely that clause 25.1 of the 2019 Agreement was intended to provide a more beneficial entitlement with respect to the same subject dealt with in clause 24.4 of the Award. That is, to provide for a minimum break period of 12 hours rather than 10 hours (unless there was mutual agreement to reduce the period to 10 hours). The re-positioning of clause 25.1 of the 2019 Agreement to its current place at clause 9.6 of the Agreement - being one of six provisions falling under the heading 'Overtime' - provides further support for this proposition.

[53] For those reasons, an examination of the 2019 Agreement does not assist in understanding the true operation of clause 9.6(1). Having considered the context put forward by Metcash in support of its construction, we have concluded that the Commissioner's construction of clause 9.6(1) is correct. The term 'shift' in clause 9.6(1) refers to a continuous period of work and not just rostered shifts of ordinary hours. The clause requires that an employee have a clear break of 12 hours between periods in which the employee performs work whether ordinary hours or as overtime (unless there is mutual agreement for the employee to return to work after a shorter break of not less than 10 hours).

[54] Ground 4 concerns the construction of clause 9.6(3) of the Agreement. As we have observed, the Commissioner concluded that, if an employee does not have a 12-hour break from work, clause 9.6(3) requires Metcash to pay an employee at the appropriate overtime rate until he or she is given such a break, even if mutual agreement has been reached to reduce the break to less than 12 hours under clause 9.6(2).

[55] Metcash submits that this conclusion is wrong. It submits that the Commissioner erred in three ways: first, by construing clause 9.6(1) as a strict obligation which mandates an absolute prohibition against an employee commencing work within 12 hours from when he or she completed work; second, by failing to read clause 9.6(2) as a facilitative arrangement which, if applied, creates a consequential adjustment to the stipulated break periods in clause 9.6(1) and 9.6(3) which, it says, is 'a notorious and well understood effect of facilitative arrangements of this type'; and, third, by failing to have appropriate regard to the context of the provision as informed by features of the Agreement and the 2019 Agreement.

[56] We do not accept those submissions. Clause 9.6(1) imposes a requirement that an employee 'shall have' a clear break from work of 12 hours between shifts. The language of the clause is characteristic of a mandatory obligation. Unlike the comparable provisions in the modern awards referred to by Metcash, the requirement that an employee have a break from work of 12 hours is not moderated by provision that the break be provided 'wherever reasonably practicable'. The language of the clause suggests an absolute obligation. Clause 9.6(2) supports that view by providing that an employee may 'return to work' after a break of shorter than 12 hours only by mutual agreement. Clause 9.6(2) supports the view that the requirement in clause 9.6(1) that an employee shall have a clear break of 12 hours is absolute.

[57] The more difficult question is whether clause 9.6(3) requires an employee who has not received a 12-hour break to be paid at the appropriate overtime rate until he or she is given that break even if mutual agreement is reached for a shorter break under clause 9.6(2). We have some sympathy for the position of Metcash that it might be said to make sense that the overtime entitlement should not apply if there is agreement for a shorter break. However, a court or tribunal construing an industrial instrument is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the instrument.[28]

[58] Clause 9.6(2) provides an exception to the obligation to ensure an employee has a break from work of 12 hours in clause 9.6(1). It does so expressly by providing that an employee may return to work after a break of shorter than 12 hours by mutual agreement. The difficulty for Metcash is that clause 9.6(2) does not provide an exception to clause 9.6(3). Rather, immediately after the reference to a shorter break being agreed in clause 9.6(2), clause 9.6(3) explicitly provides, in an unqualified way, that an employee who does not have a 12-hour break between shifts 'shall be paid' at the appropriate overtime rate until they do. Metcash's construction of clause 9.6(3) can only be achieved by disregarding the express and unqualified language of the clause or by reading additional words of limitation into the provision which are not there. We do not believe that course is justified.

[59] Furthermore, if clause 9.6(1) is understood as imposing an absolute obligation to give an employee a 12-hour break from work, the only circumstance in which an employee should have a shorter break is if agreement is reached under clause 9.6(2). Accordingly, if the Agreement is complied with, the only circumstance in which clause 9.6(3) could operate is if a shorter break is agreed under clause 9.6(2). In that context, clause 9.6(3) should not be construed as not applying in such a case. Although clause 9.6(3) is capable of applying in circumstances of non-compliance with clause 9.6(1), it is difficult to accept that the Agreement was drafted with an expectation that its provisions would be contravened.

[60] As we have indicated, we accept that some might think it would have been sensible for the Agreement to provide that the overtime entitlement in clause 9.6(3) does not apply if there is mutual agreement for a shorter break period. However, we do not regard the construction adopted by the Commissioner as leading to an outcome that can be described as absurd. As the UWU submitted, it is possible to envisage rational reasons why the parties may have intended that overtime would be payable even where a shorter break period is agreed. The UWU suggested that the clause operates to create a financial disincentive for Metcash to request an employee to reduce their break and to financially reward an employee who agrees to reduce their break period.

[61] For these reasons, the Commissioner's construction of clause 9.6(3) is correct. Clause 9.6(3) requires Metcash to pay an employee who has not had a 12-hour break at the appropriate overtime rate until he or she is given that break, even if there is mutual agreement to reduce the break period under clause 9.6(2).

[62] For these reasons, permission to appeal should be granted but the appeal dismissed. The Full Bench makes the following orders:

• (a) Permission to appeal is granted; and

• (b) The appeal is dismissed.

Matthew Minucci, counsel, instructed by Kingston Reid for the Appellant.

Sheldon Oski, Lead Industrial Officer, UWU for the Respondent.

[1] United Workers' Union v Metcash Trading Limited T/A Metcash [2024] FWC 1706.

[2] [2024] FWC 1706 at [4].

[3] [2024] FWC 1706 at [32], [33] and [37].

[4] [2024] FWC 1706 at [63].

[7] See, for example, Victoria Police Force v Police Federation of Australia [2009] AIRCFB 146; (2009) 178 IR 275 at [13]; Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Silcar Pty Ltd [2011] FWAFB 2555; (2011) 208 IR 33 at [28].

[8] DP World Brisbane Pty Ltd v Maritime Union of Australia [2013] FWCFB 8557; (2013) 237 IR 180 at [51]; FreshFood Management Services Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2023] FWCFB 97 at [27]; Opal Packaging Australia Pty T/A Opal Fibre Packaging v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2024] FWCFB 330 at [13].

[9] Linfox Armaguard v Transport Workers' Union of Australia [2024] FWCFB 373 at [36]

[10] See, for example, CMP Manufacturing Pty Ltd v Barbieri [2018] FCA 622; (2018) 275 IR 465 at [39] (Bromberg J).

[11] Registrar of Titles (WA) v Franzon [1975] HCA 41; (1975) 132 CLR 611 at 618 (Mason J); Tabcorp Holdings Ltd v Victoria [2016] HCA 4; (2016) 90 ALJR 376 at [65] (French CJ, Kiefel, Bell, Keane and Gordon JJ); Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2021] HCA 19; (2021) 273 CLR 21 at [25].

[12] Clyne v Deputy Federal Commissioner of Taxation (1981) 150 IR 1 at 15 (Mason J); Federal Commissioner of Taxation v Australian Building Systems Pty Ltd (in liq) [2015] HCA 48; (2015) 257 CLR 544 at [27] (French CJ and Kiefel J).

[13] Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union and Others (The Laverton North and Cheltenham Premises Case) [2018] FCAFC 88; (2018) 262 FCR 473 at [3] (Allsop CJ).

[14] Kucks v CSR Ltd (1996) 66 IR 182 at 184 (Madgwick J); Ridd v James Cook University [2021] HCA 32; (2021) 274 CLR 495 at [17] (Kiefel CJ, Gageler, Keane, Gordon and Edelman JJ); Hempel (Wattyl) Australia Pty Ltd v United Workers' Union [2024] FCAFC 298 at [64]- [66] (Rangiah, Snaden and Abraham JJ).

[16] See, for example, Storage Service and Wholesale Award 2010, clause cl. 24.4(b), Manufacturing and Associated Industries and Occupations Award 2020, clause 32.12(c), General Retail Industry Award 2020, clause 16.6(c), Food, Beverage and Tobacco Manufacturing Industry Award 2020, clause 23.10(b), Clerks - Private Sector Award 2020, clauses 22.3(b) and 30.4(b).

[17] Warramunda Village Inc v Pryde [2002] FCA 250; (2002) 116 FCR 58 at [17] (Lee J) and [36]-[37] (Finkelstein J).

[18] Graham v Baker [1961] HCA 48; (1961) 106 CLR 340 at 345 (Dixon CJ, Kitto and Taylor JJ).

[19] Vehicle Builders Employees Federation of Australia v British Motor Corporation (Aust) Pty Ltd (1966) 8 FLR 70 at 74-75; Coal & Allied Mining Services Pty Ltd v MacPherson [2010] FCAFC 83; (2010) 185 FCR 383 at [15] (Marshall and Cowdroy JJ); United Voice v Phillip Cleaning Service Pty Ltd [2017] FCA 392 at [24]- [26] (Jagot J).

[20] Relying on Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at 518 (Burchett J), James Cook University v Ridd [2020] FCAFC 123; (2020) 278 FCR 566 at [65] (Griffiths and SC Derrington JJ) and King v Melbourne Vicentre Swimming Club Inc [2020] FCA 1173 at [126]- [129] (Wheelahan J).

[21] CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408 (Brennan CJ, Dawson, Toohey and Gummow JJ); Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 35; (1998) 194 CLR 355 at [69] (McHugh, Gummow, Kirby and Hayne JJ); SZTAL v Minister for Immigration & Border Protection [2017] HCA 34; (2017) 262 CLR 362 at [14] (Kiefel CJ, Nettle and Gordon JJ).

[22] Amcor Ltd v Construction, Forestry, Mining and Energy Union [2005] HCA 10; (2005) 222 CLR 241 at [2] (Gleeson CJ and McHugh J) and [66] (Kirby J); Transport Workers' Union of Australia v Coles Supermarkets Australia Pty Ltd [2014] FCAFC 148; (2014) 245 IR 449 at [42]- [44] (Siopis, Buchanan and Flick JJ).

[23] City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union [2006] FCA 813; (2006) 153 IR 426 at [53] (French J).

[24] Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at 518; Australian Municipal, Administrative, Clerical and Services Union v Treasurer of the Commonwealth [1998] FCA 249; (1998) 82 FCR 175 at 178.

[25] Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Berri Pty Ltd [2017] FWCFB 3005; (2017) 268 IR 285 at [65].

[27] [2024] FWC 1706 at [35].

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