s.739 - Dispute resolution

Northern SEQ Distributor - Retailer Authority Trading AS Unitywater

Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)]

• [1] On 23 May 2024, the Ms Sarah Smith (Ms Smith / the Applicant) made an application to the Fair Work Commission (the Commission) under s.739 of the Fair Work Act 2009 (the Act) to deal with a dispute. Northern SEQ Distributor - Retailer Authority Trading AS Unitywater is the Respondent in the matter (UnityWater).

• [2] The matter was listed for a private conference on 5 June 2024 and a subsequent conference on 22 July 2024. The matter was then adjourned for several months to allow the parties to continue discussions.

• [3] On 22 January 2025, the Applicant contacted Chambers again to seek a further conference as elements of the application remained in dispute. The matter was listed on 21 February 2025 and did not resolve at conference. The parties agreed for the Commission to move to the arbitration stage of the Dispute Resolution Procedure and hear the matter on the papers.

• [4] The dispute currently before the Commission is about the terms of the Unitywater Water Industry Indoor/Salaried Staff Employees Enterprise Agreement No. 2 (No.2 Agreement).

• [5] On 5 April 2024, the Unitywater Water Industry Indoor/Salaried Staff Employees Enterprise Agreement No. 3 (No.3 Agreement) was approved by Deputy President Dobson. It succeeded the No. 2 Agreement. The provisions relevant to the controversy in this matter are identical.

• [6] The Applicant was employed by the Respondent on a maximum term contract for the period of 3 October 2023 to 11 October 2024 as a Control Room Officer, level 3.2.

• [7] At the time the Applicant commenced employment, her base rate of pay was $42.9225 per hour. For all ordinary hours of work, the Applicant was entitled to be paid her base rate of pay plus a 40% annualised percentage loading, pursuant to clause 3.2.3 of the Agreement, totalling $60.0915 per hour.

• [8] In 2024 it came to Unitywater's attention that Control Room employees were being incorrectly paid for ordinary hours of work. Upon further investigation Unitywater determined that from 1 July 2017 to 13 October 2024, Control Room employees' annualised salaries were mistakenly calculated on the basis that Control Room employees worked an average of 36.25 hours per week over a 10-week roster cycle, instead of an average of 42.8 hours.

• [9] Unitywater subsequently undertook an extensive reconciliation exercise. As part of this reconciliation exercise, Unitywater ensured that Control Room employees were paid their base rate of pay plus the 40% annualised percentage loading for all ordinary hours worked during their roster cycle (ie 42.8 ordinary hours per week) and overtime rates for all hours worked over and above their rostered hours in accordance with clauses A3.2.5 and A3.2.6 of the Agreements.

• [10] Remediation payments were made to both current Unitywater employees and to those who no longer remain employed with the organisation. The Applicant received a rectification payment of $23,306.70 following the completion of the review.

• [11] At the conference on 21 February 2025, parties agreed that the issue for determination was whether or not under the terms of the Unitywater Water Industry Indoor/Salaried Staff Employees Enterprise Agreement No. 2 (the Agreement), Control Room Operators are entitled to overtime pay after 36.25 hours or 42.8 hours or whatever other roster that applies at the relevant time.

5.1.1 The ordinary hours of work for employees, other than shift workers, or Control Room employees engaged under Appendix 3, shall be 36.25 hours per week, worked averaged over a roster cycle or period of up to 28 days, whichever is the greatest in one of the following ways:

(a) By working up to 7.25 hours per day, 5 days per week (Monday to Friday), within a spread of hours of 6.00am to 7.00pm with no rostered days off (RDOs); or

(b) Subject to sub-clause (i) below and clause 5.3.1, by working up to 7.63 hours per day Monday to Friday, inclusive of RDO accruals across 19 working days in each four (4) week work cycle, within a spread of hours of 6.00am to 7.00pm. including on work rosters, during weekends and on public holidays.

This clause shall not apply to Control Room employees engaged under Appendix 3 (Note: The rates in relation to clause 5.2.3 and 5.2.4 are included in the Control Room employees' annualised salary, and clauses 5.2.5 and 5.2.6 continue to apply to Control Room employees).

(a) A full time Employee is an employee other than a part time employee or a casual employee who works 36.25 ordinary hours per week.

Appendix 3 of the Agreements sets out the following relevant parameters for rostering of Control Room employees:

A3.1.1 Employees will work a shift roster made up of shifts of up to 12.5 hours.

A3.1.2 The minimum period of engagement for a shift will be no less than four (4) hours unless by agreement between the Supervisor/Team Leader and the employee/s.

A3.1.4 There shall be a roster which shall provide for rotation unless it is agreed otherwise by the Employer and majority of affected employees.

A3.1.5 In the absence of agreement, by the giving of 28 days' notice by the Employer to the employees concerned a roster shall be implemented after consultation has occurred.

A3.1.6 After a roster is implemented, employees may only request changes in accordance with the following sub-clauses:

(a) Where a request for a roster change is submitted by the employee, the change should be requested in writing with a minimum two (2) working days' notice and submitted during normal business hours where the change impacts one (1) swing.

(b) Any requests for greater time periods than one (1) rostered swing require 28 days' notice in writing, or a shorter time by agreement.

A3.2.3 The annualised percentage loading that is included in the annualised salary for these shift workers shall be 40%. This does not include penalty rates for additional hours required for unexpected absences or additional staffing requirements which will be paid separately.

A3.2.5 Overtime is payable at the rates set out in A3.2.6 to Operations Services employees in the following circumstances:

(a) Where an employee works in excess of the hours of their rostered shift; or

(b) Where an employee is required to work on a day that is not rostered, provided that overtime will not be payable where the employee agrees to swap their shift with another employee.

A3.2.6 Overtime is paid at the following rates calculated on the hourly rates set out in clause 9 (Salaried staff based on 36.25-hour week with no RDO):

(a) Monday to Saturday at the rate of time and a half for the first two (2) hours and double time thereafter;

(c) Public holidays at the rate of double time and a half.

• [12] The Respondent submitted that clause 5.1.1 expressly provides that the ordinary hours of work of 36.25 per week, does not apply to Control Room employees. Accordingly, the ordinary hours for Control Room employees are not 36.25 hours per week.

• [13] The Respondent also relied on clause 5.2, which expressly provides that the average of 38 ordinary hours of work over an 8-week roster cycle which applies to shiftworkers does not apply to Control Room employees. Accordingly, the ordinary hours for Control Room employees are not 38 ordinary hours averaged over an 8-week roster cycle. The ordinary hours for a Control Room employee are to be determined by reference to their roster as set in accordance with Appendix 3.

• [14] The Applicant submitted that the Agreement does not explicitly define Control Room employees' ordinary hours. However, in the absence of such specificity, she contended that it is reasonable to rely on other Agreement provisions that define standard working hours, such as:

• Clause 3.1.1 Full-time Employment: A full-time Employee is an employee other than a part- time or casual employee who works 36.25 ordinary hours per week.
• Clause 9, Appendix 1 - Classification on and Rates of Pay: Salary is calculated based on a 36.25-hour week, with no RDO.

• [15] The Respondent submitted that during the Applicant's employment, Control Room employees were rostered to work an average of 42.8 hours over a 10-week roster cycle as follows:

(a) Weeks 1 to 8: 4 on/4 off, consisting of 2 x 12.25-hour day shifts followed by 2 x 12.25-hour night shifts (including work on Saturdays, Sundays and public holidays), then 4 days off;

(b) Weeks 9 to 10: 5 x 8.5-hour day shifts (Monday to Friday only).

• [16] It contented that this roster has been in place for a number of years, and at least during bargaining and voting for the Agreements. Control Room employees are provided with their roster 12 months in advance. Any changes to the roster are made by agreement between the Control Room employee and Unitywater. Therefore, a Control Room employee's ordinary hours of work are an average of 42.8 hours over a 10-week roster cycle.

• [17] The Applicant submitted that her letter of offer detailed calculations based on a 36.25-hour workweek at the agreed rate of $60.0915 per hour. She stated that she was also informed of the 10-week roster cycle. However, to the best of her knowledge, she had never worked through a full 10-week cycle without deviations or prior consultation. These deviations were not at her request. She submitted that throughout her employment, she recalled only two instances of shift swaps - one due to a leave application being declined because of staff shortages.

• [18] It was the Applicant's contention that in approximately 4 out of 10 weeks, staff are rostered to work 48.84 hours per week. If followed without deviation, this would equate to an hourly rate of $44.601, including the 40% loading. Without loading, this equates to $31.8579 per hour - lower than the Classification Level 1.1 rate of $34.2898 per hour.

• [19] She submitted that a roster cannot unilaterally dictate working hours without restrictions or guidelines, as this could compel employees contracted for 36.25 hours to work 48+ hours per week without fair compensation. This issue is particularly concerning for shift workers who often commute up to an hour each way.

• [20] The Respondent submitted that to the extent that the Applicant complains that in some weeks she worked in excess of 48 hours, there is nothing peculiar or unusual about those types of hours in the context of a rotating roster. Indeed, it is not unusual for employees in the resources sector, by way of example, to work in excess of 80 hours in a week on a 7 on/7 off rotating roster. By virtue of the very nature of a rotating roster, the Applicant worked more than 42.8 hours some weeks and less than 42.8 hours in other weeks.

• [21] The Applicant argued that an average of 42.8 hours is unreasonable, making the actual hourly rate of pay $50.89. Her assertion was that while 42.8 hours may seem like a minor increase over 36.25 hours, this represents nearly an additional full workday every week - without proper overtime compensation. She maintained the position that averaging is not an acceptable approach when an employee is required to work 48.8 hours in a given week.

• [22] The Applicant also made reference to clause A3.2.3 where she noted that the annualised percentage loading that is included in the annualised salary for these shift workers shall be 40%. This does not include penalty rates for additional hours required for unexpected absences or additional staffing requirements, which will be paid separately.

• [23] In response, the Respondent submitted that the hours in excess of 38 worked by employees in the Control Room were reasonable and asserted that the 40% loading provided in clause 9, Appendix 3 compensated employees for shift loadings, weekend penalties, annual leave loading and public holiday penalties.

• [24] The Respondent submitted that overtime for Control Room employees is payable in two scenarios in accordance with clause A3.2.5, namely:

(a) where the employee has worked in excess of the hours of their rostered shift; and

(b) where the employee works on a day that is not rostered (excluding as a result of an agreed shift swap).

• [25] It continued, where overtime is triggered in accordance with clause A3.2.5, the overtime rates in clause A3.2.6 apply. Where a Control Room employee has worked in excess of their rostered shift or worked on a day that is not rostered, the Respondent has paid the employee overtime in accordance with clause A3.2.5 and A3.2.6.

• [26] The Respondent noted that the Applicant contended that because her annualised salary was calculated on an average of 36.25 hours per week, that all hours in excess of 36.25 should be payable at overtime rates.

• [27] The Respondent noted that it does not cavil with the fact that the Applicant's annualised salary was calculated incorrectly. As noted above, the Respondent has undertaken a remediation process for employees whose annualised salaries were miscalculated. It submitted that the fact that an error was made does not change the clear and unambiguous terms of the Agreement.

• [28] The Applicant's contention was that the provisions in A3.2.6 clearly entitled Control Room employees to overtime payments for hours exceeding their ordinary workweek.

• [29] The Applicant submitted that A3.2.3 specifically states that "additional staffing requirements" will be paid separately, which applies when a roster is structured to require more staff than available. The existing roster requires 16.4 full-time employees to meet operational demands. Factoring in recreational leave, a minimum of 17.8 staff would be required to sustain the business needs. However, there are only 15 Control Room staff positions.

• [30] She submitted that as a result, the roster is inherently structured to impose additional hours due to "additional staffing requirements." According to A3.2.3, these additional hours should be paid separately - yet they were not.

• [31] It was her contention that historically, a previous Control Room roster had a deficit of hours, requiring staff to work an extra shift or attend meetings to bring their total up to 36.25 hours per week. This precedent demonstrates Unitywater's acknowledgment that Control Room employees should work a standard 36.25-hour week.

• [32] In reply, the Respondent submitted that to the extent that the Applicant contends that the Control Room roster was inherently structured to impose additional hours due to "additional staffing requirements", this is incorrect. The Control Room roster has been consistent since mid-2017. Further, any hours worked outside of rostered hours (other than shift swaps) have been, and will continue to be, paid as overtime. For the avoidance of doubt, the review conducted in 2024 considered hours worked outside of rostered hours to ensure that overtime had been paid correctly.

• [33] Whilst clause 3.1.1 appears to say the ordinary hours for all full time employees is 36.25 hours, The Agreement makes plain by the more specific terms of clause 5, that Control Room Operators are expressly excluded from the application of the 36.25 ordinary hours provision. That exclusion in combination with the terms of Appendix 3 results in the Agreement providing that the ordinary hours of work for Control Room operators are set by their roster. This conclusion is supported by the language in Appendix 3 clause A3.2.5, stating overtime rates are payable to Control Room Operators where they work in excess of the hours of their rostered shift; or where they are required to work on a day that is not rostered, provided that overtime will not be payable where the employee agrees to swap their shift with another employee.

• [34] Appendix 3 also makes clear the annualised percentage loading of 40% does not include penalty rates for additional hours required for unexpected absences or additional staffing requirements which will be paid separately. This language further bolsters the interpretation set out above.

• [35] In short, the Respondent's interpretation is correct.

• [36] As stated above the question for arbitration was whether or not under the terms of the Unitywater Water Industry Indoor/Salaried Staff Employees Enterprise Agreement No. 2 (the Agreement), Control Room Operators are entitled to overtime pay after 36.25 hours or 42.8 hours or whatever other roster that applies at the relevant time.

In regard to the specific facts as they pertain to the Applicant in this dispute application, the answer is that the Applicant was entitled to overtime pay after 42.8 hours. Whilst it is strictly unnecessary to say any more to resolve this dispute, it is clear from the terms of the Agreement that at the relevant times, Control Room Operators were working to a roster that provided for an average of 42.8 ordinary hours across the roster cycle. To conclude, overtime would apply to other Control Room Operators in the same way whilst the existing rostering arrangement remains in place.

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