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[2002] AIRC 245
respondent. The Commission held that the production employees working a rotating three-shift system are engaged in shift work and are entitled to a 15% shift loading for each shift worked, irrespective of...
When employees are rostered on a rotating shift system, they are 'shift workers' even if one of the rostered shifts falls during normal day hours. Such employees must be paid the 15% shift loading for every shift they work, unless a specific 30% higher loading exception applies. The clause listing 'afternoon', 'night' and 'early' shifts does not limit what counts as a shift. The Commission preferred the union's interpretation and ordered payment accordingly. [15], [22]–[23]
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1,698 words · generated 05/07/2026
Midland Milk Pty Ltd deployed a new production roster after winning a substantial supply contract. Production at the Shepparton plant increased markedly and the employer moved production workers from day-only rosters to a rotating three-shift system. The three core rostered periods were approximately 10.00–18.00, 14.00–22.00 and 02.00–10.00. One of those rostered periods fell within the Agreement's day-work spread (4.00 am to 7.00 pm), but the employees rotated through all three periods. The Company took the position that the Agreement required no shift loading where work fell within the day-work spread; the National Union of Workers (NUW) contended that employees engaged in the rotating shift system were 'shift workers' and thus entitled to the 15% shift loading for each shift worked (subject to the 30% exceptions). The Company notified an industrial dispute under s.99 of the Workplace Relations Act 1996 and, pursuant to the Agreement's dispute resolution clause (Clause 30(d)), the Australian Industrial Relations Commission (Senior Deputy President Williams) was asked to determine the proper construction of Clause 13(e) and resolve entitlement to loading. [1]–[12]
1 cited instrument linked from this judgment.
The Tribunal's decision turns on textual and contextual construction of the Agreement, applying orthodox interpretive tools set out in the judgment. The starting point was that ordinary and natural meaning governs, and that a provision must be read in context of the whole agreement; extrinsic aids are used only if ambiguity is found. The Commission adopted a functional definition of 'shift work' (para 15): a system of work regularly carried out at hours outside the normal spread in addition to work within the spread, such that continuous work is handed from one employee or crew to another. Applying that definition to the Shepparton roster, the Tribunal concluded the employees were plainly engaged in shift work because the roster involved continuous production covered by rotating crews. [13], [15]
Two discrete interpretive consequences followed. First, the listing of particular shift types in Clause 13(e)(2) (afternoon, night, early) was not treated as exhaustive; those subparagraphs define certain shift types but do not 'define the shifts' generally so as to exclude other periods from being shifts. The absence of a labelled 'day shift' in the list did not mean that rostered work falling into the day spread could not be a shift when performed as part of a shift system. [25]
Second, the exceptions that trigger a 30% loading were read in context. The Commission rejected the employer's narrow grammatical reading that the 30% exception only contemplated rotation to 'day work' in a different sense. Instead the phrase 'another shift or day work' was read to accept that 'another shift' in a rotating system may include a day shift. Taken together, the Tribunal found employees engaged on the rotating three-shift system were entitled to the 15% loading for each shift worked, irrespective of the hours in which a particular shift fell, save where the Agreement's higher-loading exceptions applied. [26], [23]
To support interpretive choices, the Tribunal cited dictionary meanings of 'shift' (Shorter Oxford and Macquarie) and relevant authority on interpretive approach to awards and agreements (City of Wanneroo v Holmes; Short v F W Hercus), and it relied on the Bridgestone decision (National Union of Workers v Bridgestone Earthmover Tyres) insofar as it explained the ordinary meaning and colloquial usage of 'shift'. The dictionaries and Bridgestone reinforced that 'shift' commonly denotes a segment of continuous work and that a rostered rotation of crews is the quintessential example of shift work. [18]–[21], [19]
Before the decision the Agreement expressly distinguished between 'day workers' and 'shift workers' and provided specific shift-loading entitlements for employees 'whilst engaged in shift work' (Clause 13(e)). However, there was a plausible competing reading: that the Agreement's explicit day-work spread created a class of hours for which no shift loading could be payable even if employees were engaged in a broader rotating roster.
After the Commission's decision, the legal position under the Agreement is clarified: classification as a 'shift worker' depends on the system of work and rostered pattern rather than solely on whether a particular shift falls within the day-work spread. Where employees are engaged in a rotating shift system, each rostered shift constitutes a shift for loading purposes, and the 15% loading must be paid for each shift worked unless the Agreement's specified exceptions to 30% apply. The decision therefore narrows an employer's ability to avoid shift-loading liabilities by reliance on time-of-day labels where rotation and continuous handover demonstrate a genuine shift system. [15], [22]–[23], [26]
Paragraph 15 (definition of 'shift work')
Paragraph 22 (effect of a shift falling inside the day spread)
Paragraph 23 (dispositive conclusion)
Paragraph 25 (on defined shift types)
The reasoning in this decision will be engaged where:
The Midland Milk decision itself does not contain material about subsequent judicial or arbitral treatment. The judgment cites and relies on established interpretive authorities (City of Wanneroo v Holmes; Short v F W Hercus) and a decision applying the ordinary meaning of 'shift' (Bridgestone). To determine how later tribunals or courts have treated Midland Milk would require subsequent research in case reports and industrial decisions after 6 March 2002. The present decision stands as a binding construction of the certified Agreement before the Commission, subject to appeal or later authority. [13], [19]
There are several areas the decision does not fully explore and which could generate further disputes:
Practical takeaway for employers and advisers: when introducing rotating rosters that include periods inside a 'day spread', treat the rostered employees as potential shift-workers for loading entitlements unless the agreement clearly provides otherwise. If employers intend to exclude particular periods from shift-loading, that exclusion should be expressed clearly in the Agreement and not left to inference from a list of example shift types. When in doubt, seek to resolve by consultation under the agreement's dispute clause, or obtain a declaratory ruling, because the functional character of the roster, not the time label alone, determines entitlement.
s.99 Notification of industrial dispute
SENIOR DEPUTY PRESIDENT WILLIAMS MELBOURNE, 6 MARCH 2002
Interpretation of loading provisions of an agreement
[1] This matter originally came before the Commission as a result of a notification by Midland Milk Pty Ltd (the company) under s.99 of the Workplace Relations Act 1996 (the WR Act) of an alleged industrial dispute between the company and the National Union of Workers (the NUW) over the "interpretation of the shift loading provisions of the Agreement applying to the parties" at the company's Shepparton operations. The agreement in question is the Midland Milk Pty Ltd Agreement 1999 (the Agreement).[1]
[2] During a brief hearing and conference before me on 26 November 2001, it became apparent that no industrial action was being threatened by the NUW or the employees concerned. The matter was adjourned to 5 February 2002 for a hearing to be conducted pursuant to Clause 30(d) of the Agreement. Clause 30 sets out a procedure for dealing with "any dispute or claim" and sub-clause (d) provides that if, after the completion of the steps set out in sub-clauses (a)-(c), the matter in dispute "is still not settled, it shall be submitted to the Australian Industrial Relations Commission for decision which shall, subject to any appeal in accordance with the Act, be final".
[3] The Agreement was certified by the Commission on 9 December 1999. Clause 8 provides for it to operate from 16 July 1999 and remain in force until 15 July 2002.
[4] By virtue of Clause 5 of the Agreement, the Agreement "shall take the place of the parent award", which is the Food, Beverages and Tobacco Industry - Retail Dairies - Victoria - Award 1996[2] and the company is obliged to "operate exclusively under this Agreement within the boundaries of Clause 4 - Incidence of Agreement."
[5] Clause 13 of the Agreement provides as follows -
Each employee shall be entitled to at least one (1) clear day off in each pay week.
The parties to this Agreement agree to a greater flexibility in the Fostering of personnel to meet the demands of operational requirements on a departmental basis.
This process may include the changing of shift rosters and, furthermore give the Company the ability to use fixed Fostering systems on a year round basis.
An employee's roster may be altered without the 7 days notice ordinarily required if the employee voluntarily agrees to the Company's request for such an alteration.
The Company shall not be required to the give the 7 days notice of roster change in the event of an unforseen emergency which will have a major impact on production or distribution.
Subject to the following paragraphs hereof, the ordinary hours of work shall be an average of 38 hours per week to be worked on one of the following bases:
(i) 38 hours within a work cycle not exceeding seven consecutive days; or
(ii) 76 hours within a work cycle not exceeding fourteen consecutive days; or
(iii) 114 hours within a work cycle not exceeding twenty-one consecutive days; or
(iv) 152 hours within a work cycle not exceeding twenty-eight consecutive days; or
(v) 190 hours within a work cycle not exceeding thirty-five consecutive days; or
(vi) 228 hours within a work cycle not exceeding forty-two consecutive days; or
(vii) 266 hours within a work cycle not exceeding forty-nine consecutive days.
However, not exceeding 12 ordinary hours per day.
The ordinary hours of work shall be between the hours of 4.00 am and 7.00 pm on up to any 6 days of the week between Monday and Sunday inclusive and shall average 38 hours per week- however not less than 5 hours and not exceeding 12 ordinary hours work on any day.
Employees, whilst engaged in shift work, shall be paid 15 per cent more than the appropriate rate prescribed in Clause 9 of this Agreement, for each shift worked.
during a period of engagement on shift works night only; or
remains on night shift for a period longer than four consecutive weeks;
or alternate with another shift or day work so as to give the employee at least one third of the employee's working time off night shift in each shift cycle;
shall during each engagement period or cycle be paid 30 per cent more than the appropriate rate prescribed in Clause 9 of this Agreement for each shift worked.
"Afternoon Shift" means any shift finishing after 7.00 pm and at or before midnight.
"Night shift" means any shift finishing subsequent to midnight and at or before 6.00 am.
"Early Shift" means any shift commencing between 1.00 am and 4.00 am.
Prior to the implementation of shift work an official of the National Union of Workers shall be notified. Any issue arising from the implementation of shift work shall be dealt with in accordance with Clause 30, Settlement of Disputes. Both parties acknowledge that operational requirements at any site and the flexibility provisions of Clause 13(b) are the paramount considerations.
[6] Prior to August/September 2000, production workers were employed within the spread of hours referred to in Clause 30(d) of the Agreement. It is not contested that, as such, they were employed as day workers. Some employees in the external despatch area did, however, work on a rotating shift basis. When these latter employees worked on day work as part of the rotating shift system, they were not paid any shift work allowance for such work.
[7] In August 2000, the company secured a new contract to supply market milk to the Safeway retail organisation. The effect of this new contract was to almost triple production at the Shepparton facility, from 100,000 litres per day to 280,000 litres per day. The production increase required the engagement of new employees and an expansion in production hours. In particular, the increase brought about a new working arrangement in that production workers were to be employed on a rotating shift basis.
[8] The system of work put in place for production employees involves staggered start times with the core periods of work being 10.00 a.m. - 6.00 p.m., 2.00 p.m. - 10.00 p.m. and 2.00 a.m. - 10.00 a.m. The first of these periods will be seen to fall within the spread of hours for day work (Clause 30(d)), the second falls within the definition of afternoon shift (Clause 30(e)(2)) and the third fall within the definition of early shift (Clause 30(e)(2)). The employees are rostered on a regular basis to rotate through each of these periods of work.
[9] Shortly before the new contract commenced, discussions were held between management and the NUW delegate about shift arrangements and shift payments. According to the evidence of Wayne Bernhardt, the company's Plant Manager, specific Agreement was reached with the delegate that, under the Agreement, a 15 per cent shift loading was payable for work performed outside the spread of hours specified in the Agreement for day work (i.e. for work performed outside the hours of 4.00 a.m. to 7.00 p.m.) but no loading was payable for work performed within that spread of hours. The evidence of Terry Murphy, the NUW delegate, was that, whilst he agreed in principle to the shift arrangement proposed by the company, he did not agree that no loading was payable for work performed during the spread of hours specified for day work and that he had advised the company that he would be referring the company's proposals to the NUW organiser.
[10] The parties agree that the issue of shift allowances was subsequently raised with the company's management by the NUW organiser, Brad Dobson. Mr Bernhardt's evidence was that the issue raised by Mr Dobson concerned whether or not a 30 per cent loading was payable for night shift rather than any question of the appropriate payment for day work. Mr Murphy's evidence was that Mr Dobson raised the issue of the appropriate payment for work performed between the spread of hours prescribed for day work. Mr Dobson was not called to give evidence.
[11] Whatever issue was in fact raised by Mr Dobson, on 19 December 2000, Martin Pakula, the Assistant Branch Secretary of the NUW wrote to the company in the following terms -
I refer to the above matter and to your recent discussions with Organiser Brad Dobson.
In response to your query about the way shift work is paid, the dairy industry is somewhat different to, say, the provisions which exist in the Metal Industry award. An employee is considered to be either a day worker or a shift worker. In the industry, continuous and 7 day shift work has been common and is provided for in Awards.
On that basis there are effectively 2 categories of employees - those that work "shifts" and those that do not. If an employee is one who fall [sic] into the category of working shifts, then that employee "shall be paid fifteen per cent more than the appropriate rate ... for each shift worked".
I hope this clears the matter up. If you have any queries please contact me on 92871777.
[12] Mr Pakula's "hope" did not materialise. The matter of the proper payment for work performed during the "day work" spread of hours by production employees performing work on a rotating shift basis remains in dispute. The company maintains that the Agreement does not provide for any loading to be paid for such work. The NUW contends that a loading is payable.
[13] The determination of this dispute between the parties requires the Commission to construe the provisions of sub-clause (e) of Clause 30 of the Agreement. A fundamental principle in the interpretation of any enactment or document is the application of the ordinary and natural meaning of the words in question. It is only if some ambiguity is found that recourse is had to extrinsic materials. In general these principles apply to the interpretation of awards and Agreements.[3] However, a particular provision in an award or Agreement cannot be read without reference to the document as a whole and the context in which the provision appears.[4]
[14] The sub-clause in question requires that, with certain stated exceptions, a shift allowance of 15 per cent is to be paid "for each shift worked" to employees "whilst engaged in shift work". The exceptions concern situations in which the allowance is to be 30 percent.
[15] The qualification for the payment of the allowance is engagement in shift work. For so long as the employee is engaged in shift work, she/he qualifies for payment of the allowance. In my view, "shift work" may be properly defined as a system of work which is regularly carried out at hours outside the normal spread of hours in addition to work within the spread, so that work performed by one employee or group of employees during a period of continuous work is continued by another employee or group of employees for the following period of continuous work. Applying that definition, I have no doubt that the employees in question are engaged in shift work.
[16] Such an approach is consistent with the fact that Clause 30 distinguishes between day workers and shift workers. It is clear, in my view, that day workers are those employees who are employed to perform work on a regular and consistent basis wholly within the spread of hours prescribed in Clause 30(d). Employees employed on a regular and consistent basis to perform work in accordance with a shift work system are shift workers.
[17] That the Agreement distinguishes between "day workers" and "shift workers" is supported by reference to the provisions of Section D of Clause 20 of the Agreement which prescribes an entitlement for an extra week's annual leave for "shift workers who are rostered to work regularly on Sundays and holidays". Further, the evidence of Mr Bernhardt was that, for the purposes of annual leave entitlements, the employees in question were treated as seven day shift workers.
[18] The Shorter Oxford Dictionary relevantly defines "shift" as meaning -
A relay or change of workmen; or, the length of time during which such a set of men work.
[19] In National Union of Workers v Bridgestone Earthmover Tyres Pty Ltd[5], Munro J described "[t]he literal and ordinary meaning of "shift"" as being "caught" by the alternative meanings contained in that definition and went on to state -
Those meanings correspond with the colloquial use of the term to indicate differential work teams, or working times; "shifts" are present only if the workforce is segmented into teams or crews which have different working times. It is also compatible with that ordinary meaning to refer to a Saturday or Sunday shift. Such a shift may cover a distinct crew and length of working time within a roster of ordinary working time.
[20] The Macquarie Dictionary relevantly defines "shift" as meaning -
the portion of the day scheduled as a day's work when a factory, etc., operates continuously during 24 hours, or works both day and night; a group of workers so employed.
[21] The dictionary definitions, in my view, support the word "shift" as being appropriately construed as a period of continuous work during a working day, denoted by length and/or by the time during which it takes place.
[22] The relevant system of work at the company's Shepparton operations is a rotating three shift system. One of those shifts happens to be worked within the spread of hours prescribed for day workers. The fact that this is the case does not mean that, whilst performing work during that spread of hours, the employees concerned cease to be "engaged in shift work" nor does it mean that the hours so worked do not constitute a "shift".
[23] It follows, in my view, that the relevant employees are engaged in shift work and are entitled, subject to situations in which the 30 per cent loading is payable, to a 15 per cent loading for each and every shift worked irrespective of the hours within which the work is performed.
[24] It was contended on behalf of the company that, for the purposes of the term "each shift worked", the provisions contained in sub-paragraph (2) of Clause 30(e) "define the shifts". It was submitted that the shifts defined in that sub-paragraph -
are each of the shifts that might be worked according to the introductory paragraph of (e)(1) whereupon the 15 per cent loading becomes payable and that if work does not fall within the definitions there in (e)(2) for afternoon, night and early shift, then that work must be day work. It must fall within (d) and if it is day work, it is not shift work, because the two areas are treated separately and deliberately so and your Honour will see from comparisons later that that is also the case in most awards. There is a distinction drawn between shift work and day work.[6]
[25] The provisions of sub-paragraph (2) of Clause 30(e) do not "define the shifts". They merely define certain types of shifts. There is in the sub-paragraph no reference to or definition of "day shift". It does not follow, however, from the absence of any such reference or definition, that the work performed during the spread of hours prescribed in Clause 30(d) by workers engaged on a rotating shift operation is not performed on or in the course of a "shift". It merely means that the work so performed is not performed on or in the course of any one of the shifts defined in sub-paragraph (2).
[26] The company also drew attention to the exceptions contained in sub-paragraph (1) of Clause 30(e). The grammar and punctuation of those exceptions leaves much to be desired. However, as I understand the company's submission, the particular exception referred to by it should be read as meaning that a 30 per cent allowance is payable when -
an employee is required by the Company ... [to work] on a night shift which does not rotate or alternate with another shift or day work so as to give the employee at least one third of the employee's working time off night shift in each shift cycle.
It is contended by the company that this exception contemplates rotation to day work, not rotation to day shift. I do not agree. The exception contemplates rotation to "another shift" or to "day work". In a rotating shift operation, such "another shift" may include a day shift.
[27] I reiterate that, in my view, the construction contended for by the NUW is correct. Under the Agreement, the production employees working on the rotating shift system currently operated by the company are engaged in shift work and are entitled, except in situations in which the 30 per cent loading is payable, to a 15 per cent loading for each and every shift worked irrespective of the hours within which the work is performed.
E. Curnow, M. Pakula and T. Murphy for the National Union of Workers.
2 AW781417. The award is now known as the Food, Beverages and Tobacco Industry - Retail Dairies - Victoria - Award 2000.
3 City of Wanneroo v Holmes [1989] FCA 369; (1989) 30 IR 362.
4 See Short v F W Hercus Pty Ltd [1993] FCA 51; (1993) 40 FCR 511, 46 IR 128.
Printed by authority of the Commonwealth Government Printer
Midland Milk Pty Ltd
National Union of Workers re Midland Milk Pty Ltd Agreement 1999 - PR914993 [2002] AIRC 245;
(1989) 30 IR 362
(1993) 40 FCR 511
The Commission held that the production employees working a rotating three-shift system are engaged in shift work and are entitled to a 15% shift loading for each shift worked, irrespective of whether a particular shift falls within the Agreement's day-work spread, subject to specified exceptions where a 30% loading applies. The NUW position was accepted and the company's contrary interpretation rejected. [15], [22]–[23], [26]