INDUSTRIAL LAW - Calculation of basic periodic rate of pay -- whether criteria in definition fulfilled.

INDUSTRIAL LAW - Set off - whether calculable on evidence.

WORDS AND PHRASES - "specified" - "specified number" - "specified number of hours per week" - "specified number of hours over a period".

Evidence Act 1995 (Cth), s.55

Workplace Relations Act 1996 (Cth), ss.173, 178, 201-222, 228, 229, 232, 233, 235(2), 245, 246, 507, 612

AFMEPKIU v BHP Billiton Iron Ore Pty Ltd [2006] WAIR Comm 5467

Andersen v Umbakumba Community Council (1994) 126 ALR 121

Australian Glass Manufacturers Co Pty Ltd & Ors v The Amalgamated Engineering Union & Anor (1960) 1 FLR 302

Australian Licensed Aircraft Engineers Association v Glyndale Pty Ltd (2009) 179 IR 102; [2009] FMCA 188

Byrne & Frew v Australian Airlines Limited [1995] HCA 24; (1995) 185 CLR 410

CFMEU v BHP Coal Pty Ltd (2008) 173 IR 56; [2008] AIRC 391

Coca-Cola Amatil (Aust) Pty Ltd v LHMU [2009] AIRC 438

Copperart Pty Ltd v Federal Commissioner of Taxation (1994) 28 ATR 119 Gibson v Bosmac Pty Ltd (1995) 60 IR 1

McMorran v A. E. Marrison (Contractors) Ltd [1944] 2 All ER 448

Mukesh v Refined Sugar Pty Ltd PR 966177; [2006] AIRC 176

Reid v Dawson (1955) 1 QB 214; [1954] 3 All ER 498

Re Kutner [1921] 3 KB 93

Re Metal, Engineering and Associated Industries Award 1998, Part 1 (2000) 110 IR 247

Rogers v Millenium Inorganic Chemicals Ltd & Anor (2009) 178 IR 297; [2009] FMCA 1

Tucker v Tucker [2008] FMCAfam 254

White v Whitcher (1927) 44 TLR 113

Williams v Macmahon Mining Services Pty Ltd [2009] FMCA 511

The Oxford English Dictionary (2nd edn) (Oxford: Clarendon Press 1989)

(1) That the respondent pay the applicant the sum of $8067.69 for untaken accrued annual leave by 4.00pm on 14 September 2009.

Introduction - previous judgment, declarations and orders

1. In Williams v Macmahon Mining Services Pty Ltd[1] delivered on

28 May 2009 this Court made the following declarations: * (1) Mr Williams was: * (a) not a casual employee for the purposes of s.227 of the WR Act; and * (b) subject to declaration (2) below, entitled to annual leave payment for accrued annual leave on termination of employment in accordance with ss.232 and 235(2) of the WR Act. * (2) Macmahon Mining is entitled to set-off any sum of money appropriated from the casual loading paid to Mr Williams in lieu of annual leave against any entitlement Mr Williams has to annual leave payment for accrued annual leave on termination of employment in accordance with ss.232 and 235(2) of the WR Act. 2. The matter was adjourned to a directions hearing on 12 June 2009. At that directions hearing the following orders were made: * 1. The applicant file and serve submissions in relation to the number of hours accrued annual leave by close of business on 15 June 2009. * 2. The respondent file and serve submissions in relation to the number of hours accrued annual leave and set-off by close of business on 19 June 2009. * 3. The applicant file and serve a reply in relation to set-off by close of business on 24 June 2009. * 4. The matter be listed for hearing at 2:15pm on 29 June 2009. 3. Submissions have been filed by the applicant, Mr Williams, and the respondent, Macmahon Mining Services Pty Ltd,[2] in accordance with orders 1-3 made on 12 June 2009.

1. The following issues now require determination:

1. the quantum of annual leave accrued by Mr Williams; 2. what, if any, monies paid to Mr Williams as a casual loading can be set-off against the annual leave entitlement; and

1. a further issue which arises in relation to the two issues in a) and b), that is: What is the basic periodic rate of pay at which annual leave is to be paid?

1. Sections 229 and 232 of the Workplace Relations Act 1996 (Cth)[3] provide as follows:

Employees employed to work a specified number of hours

(1) For the purposes of this Division, if an employee is employed by an employer to work a specified number of hours per week, the number of nominal hours worked, by the employee for the employer during a week, is to be worked out as follows:

(ii) if the specified number of hours is more than 38 hours - 38 hours;

(i) the number of hours (if any) in the week when the employee is absent from his or her work for the employer on leave which does not count as service;

(ii) the number of hours (if any) in the week (other than hours mentioned in subparagraph (i)) in relation to which the employer is prohibited by section 507 from making a payment to the employee.

Note: The actual hours worked from week to week by an employee who is employed to work a specified number of hours per week may vary, due to averaging as mentioned in section 226 or to some other kind of flexible working hours scheme that applies to the employee's employment.

(2) If an employee is employed on a full-time basis, but the terms and conditions of the employee's employment do not determine the number of hours in a week that is to constitute employment on a full-time basis for the employee, the employee is, for the purpose of subsection (1), taken to be employed to work 38 hours per week.

(3) If an employee is employed to work a specified number (the number of non-week specified hours) of hours over a period (the non-week period) that is not a week (for example, a fortnight), then, for the purpose of subsection (1), the employee is taken to be employed to work the number of hours per week determined, subject to the regulations (if any), in accordance with the formula:

Employees not employed to work a specified number of hours

(4) For the purposes of this Division, if subsection (1) does not apply to the employment of an employee by an employer, the number of nominal hours worked, by the employee for the employer during a week, is the lesser of the following:

(i) start with the number of hours (if any) in the week that the employee both works, and is required or requested to work, for the employer;

(ii) add the number of hours (if any) in the week when the employee is absent from his or her work for the employer on leave that counts as service;

(iii) deduct the number of hours (if any) in the week in relation to which the employer is prohibited by section 507 from making a payment to the employee;

(b) the number of nominal hours the employee would be taken to have worked for the employer under subsection (1) during the week if the employee were employed to work 38 hours per week.

(4A) For the purposes of subparagraphs (1)(b)(i) and (4)(a)(ii), a period of authorised unpaid leave or unauthorised leave does not count as service in relation to an employee except:

(i) a term or condition of the employee's employment; or

(ii) a law, or an instrument in force under a law, of the Commonwealth, a State or a Territory; or

Note: For whether leave guaranteed under this Part counts as service, see subsections 238(2) (annual leave), 260(2) (paid personal leave), 261(2) (unpaid carer's leave) and 316(2) (parental leave).

Note 1: The regulations may prescribe a different definition of nominal hours worked for piece rate employees (see section 231).

Note 2: An employee's hours of work may be varied (by number or time) in accordance with a workplace agreement, award or contract of employment that binds the employee and his or her employer.

Note 4: Because of the definition of hour in subsection (5), an employee's nominal hours worked may be a number of hours and part of an hour.

(1) For the purposes of this Division, annual leave means leave to which an employee is entitled under this Subdivision.

(2) An employee is entitled to accrue an amount of paid annual leave, for each completed 4 week period of continuous service with an employer, of 1/13 of the number of nominal hours worked by the employee for the employer during that 4 week period.

Example: An employee whose nominal hours worked for a 12 month period were 38 hours per week would be entitled under this subsection to 152 hours of annual leave (which would be the equivalent of 4 weeks of annual leave if his or her nominal hours worked remained unchanged).

(3) An employee is also entitled to accrue an amount of paid annual leave, for each completed 12 month period of continuous service with an employer, of 1/52 of the number of nominal hours worked by the employee, for the employer, as a shift worker during that 12 month period.

Example: A shift worker whose nominal hours worked for a 12 month period were 38 hours per week, and who worked as a shift worker throughout that period, would be entitled under this subsection to an additional 38 hours of annual leave (which would be the equivalent of one week of annual leave if his or her nominal hours worked remained unchanged).

1. Mr Williams' submissions in relation to the quantum of annual leave accrued are as follows:

1. he was employed from 9 November 2006 until 16 December 2007, a period of 57 weeks, incorporating four completed four week periods; 2. he was employed to work a shift arrangement comprising

14 consecutive days of 12 hour shifts and seven days off, being a shift cycle of 21 days, with total hours worked being 168 hours;

1. section 229(3) applies because Mr Williams was employed to work on the 14 day on, 7 day off, shift arrangement resulting in 168 hours being worked over 21 days, being a specified number of hours over a period that is not a week;

1. applying the formula in s.229(3) of 168 hours multiplied by seven days divided by 21 equals 56 hours; 2. section 229(1)(a)(ii) therefore applies and the nominal hours worked are 38 per week; 3. there are no relevant deductions to be made under s.229(1)(b); 4. if s.229(3) does not apply then s.229(2) applies and because Mr Williams was employed on a full-time basis the nominal weekly hours are still 38; 5. applying s.232(2) the entitlement is calculated as follows:

1. 14 completed four week periods multiplied by 152 nominal hours each four week period divided by 13, equalling 163.69 hours;

1. under s.232(3) add 38 hours for shift work, equalling 201.69 hours; and 2. multiply 201.69 hours by Mr Williams' rate of pay of $40.00 per hour to arrive at a monetary entitlement for annual leave accrued of $8,067.69.

1. Macmahon Mining's submissions in relation to the quantum of annual leave accrued are as follows:

1. the entitlement to paid annual leave under s.232(2) and (3) is based on nominal hours worked by an employee, "nominal hours worked" having the meaning given by s.229; 2. section 229 prescribes a formula for calculating the number of "nominal hours worked" by an employee during a week, and starts with a consideration of the specified number of hours per week that an employee is employed to work,[4] and does not presume: 1. full-time employment, as that is covered by s.229(2); 2. indefinite employment, s.229(1) being able to apply to a fixed period employee; or 3. continuous service, that being the benchmark for the calculation in s.232(2);

1. section 229(1) only applies to a week in which an employee actually works, and: * (i) a separate calculation must be done for each week of employment in which a specified number of hours is worked;[5] and * (ii) the formula in s.229(1) can result in variation of the number of nominal hours worked from week to week, even though there be no change in the specified number of hours per week that an employee is employed to work;[6]

1. section 229(1)(b)(i) emphasises that the calculation must be done for each week of employment because it prescribes that the number of hours in any particular week of unpaid leave, even if authorised, must be deducted when doing the calculation;[7] 2. section 229(2) and (3) provide alternative means of deriving the specified number of hours per week for which an employee is employed to work, with: 1. section 229(2) applying to full-time employees; and 2. section 229(3) applying to employees who work blocks of time that are not a week; 3. section 229(4) applies to an employee not employed to work a specified number of hours, with the formula prescribed in s.229(4)(a) taking into account hours in a week: 1. when an employee does some work at the requirement or request of the employer;[8] 2. when an employee is absent on leave that counts as service, such as paid authorised leave;[9] and 3. for which an employee cannot be paid because of the prohibition in s.507;[10] 4. if the formula prescribed in s.229(4)(a) results in a figure greater than that prescribed in s.229(4)(b) then the latter figure is to be used, that is, the nominal hours in that week that an employee would have worked if they were employed to work 38 hours in that week; 5. as with s.229(1), a separate calculation must be done in accordance with s.229(4) for each week of employment in which the matters set out in either s.229(4)(a)(i) or (ii) or (iii) arise; 6. Mr Williams was employed to work 168 hours over a period of a fortnight calculated by reference to his working 168 hours in a block of two consecutive weeks when he was rostered on following which he was rostered off for a period of one week during which he was not required to work; 7. section 229(3) applies to determine the specified number of hours per week for the two week period that Mr Williams was employed to work, and that for each of the two weeks on

Mr Williams was taken to be employed for 84 hours per week;[11] 8. by reason of s.229(1)(a)(ii), 38 hours is the prescribed number of hours, from which must be deducted the number of hours prescribed by s.229(1)(b);

1. section 229(1)(b)(i) is inapplicable to the weeks worked by

Mr Williams, the evidence being that he was not absent from work during rostered weeks on;[12] and there is no evidence of any hours attracting the operation of s.229(1)(b)(ii);

1. for each of the two weeks on Mr Williams' nominal hours worked are 38 hours a week; 2. section 229(1) did not apply to Mr Williams' employment during his one week off because Mr Williams was not employed to work any hours in that week, and the application of s.229(4)(a)(i), (ii) and (iii) produces a zero result because: 1. Mr Williams was not at work during a rostered week off;[13] 2. Mr Williams' one week off was unpaid, and therefore cannot be regarded as leave that counts as service;[14] and 3. there is no evidence of any hours attracting the operation of s.229(4)(a)(iii),

and as the formula produces a zero result the number of nominal hours worked by Mr Williams was zero for a week when the applicant was rostered off;

• Mr Williams' pattern of nominal hours worked a week in the first 12 week period, that is three completed four week periods of continuous service, before the pattern started repeating itself was as follows:

1. for every three completed four week periods of continuous service, the applicant's nominal hours were 304 hours,[15] and for a 52 week (one year) period of continuous service, Mr Williams' nominal hours worked were 1216 hours (304 hours multiplied by 4) plus a further 114 hours for the 13th four week period of continuous service, constituting 1330 nominal hours for a 52 week period;
2. for the 57 week period agreed to constitute continuous service, there are 14 completed four week periods of continuous service, and Mr Williams' nominal hours worked were 1330 plus 114 for the 14th completed four week period of service, giving a total of 1444 hours;
3. for the 14 completed four week periods of continuous service the applicant accrued 1444 hours divided by 13 in accordance with s.232(3) of the WR Act to give 111.07692 hours of paid annual leave;
4. Mr Williams was entitled to additional paid annual leave as a shift worker for every completed period of 12 months service, calculated in accordance with s.232(3), by dividing 1330 nominal hours worked in 52 weeks by 52 hours, giving a total of 25.576923 hours accrued annual leave for shift work;
5. Mr Williams' total entitlement to paid annual leave was therefore 136.65384 hours; and
6. at a basic periodic rate of pay of $33.33 per hour, Mr Williams' paid annual leave entitlement on termination was $4,554.67.[16]

1. In reply, Mr Williams says that Macmahon Mining's submissions are inconsistent with and contrary to the plain meaning and intent of s.229 having regard to its overall purpose and structure.

1. Before considering the application of ss.229 and 232 it is necessary to reiterate the factual position found by the Court concerning the hours worked by Mr Williams. In Macmahon Mining Services (No.1) the Court said:
   • 7. The hours of work set out in the Contract of Employment were:

• You will work 12 hours (sic) shifts on a 2 weeks on/1 week off roster. You are entitled to 1 meal breaks (sic) of 30 minutes duration whilst on this work pattern and they are paid. * The employee is required to perform such duties as required by the Company.... * The employee agrees to work a shift roster system as determined from time to time to be appropriate to the operations and to working reasonable amounts of overtime. The rostered hours for a site may include:

• A requirement to be rostered to work on either day or night shift * A requirement to be rostered to work on a Saturday, Sunday or Public holiday.
  • 8. Mr Williams worked 12 hour shifts on a two weeks on/one week off roster, that is seven consecutive night shifts, then seven consecutive day shifts, and then seven days off, for the entire period of the employment, save for the first three months when he worked day shifts only on his two weeks on. The only exception to this arrangement was in about May or June of 2007 when Mr Williams wished to attend his son's naval graduation ceremony. On this occasion Mr Williams filled out a leave form asking to have seven day shifts off and then to resume work at the end of that period. That request was granted. The effect was to swap work days for days off so no work time was lost. Otherwise, Mr Williams did not take any paid leave during the period of his employment and did not receive any pay for any accrued untaken leave on termination.
  • 9. Mr Williams worked in one of three crews at Argyle. He was on "C" crew. For most of the time that he was employed he worked on mobile plant (such as a loader known as an IT), and which the project manager described as "Equipment Operator ... for miscellaneous underground construction activities." The crews followed on from each other on each shift performing the same type of work on the job or jobs then underway. The work within the mine was subject to strict safety requirements. Work had to be co-ordinated with mine workers and their supervisors from time to time.
  • 10. For the 2008 calendar year Mr Williams was provided with a "CRE 2008 C Crew Roster" which set out his crew's night and day shifts and flight times for the charter flights to and from Argyle for that 12 months.[17]
  • ...
  • 36. The Court finds that there was an expectation that Mr Williams would be available, on an ongoing basis, to perform the duties required of him, in accordance with the roster, until such time as the Contract of Employment came to an end. This was not a Contract of Employment where the availability of work was the subject of significant fluctuation from one day, or one week, or one month, to the next so as to make the work, and hours of work, irregular and uncertain. Rather, the work was performed in accordance with a stable, organised and certain roster, with certainty of working hours, ongoing until the Contract of Employment was ended, either for some cause or because the head contract between Argyle and Macmahon Mining had come to an end. In this case, Mr Williams' Contract of Employment was terminated for cause by Macmahon Mining, and the work, and the availability of work, continued on as it had prior to his termination. Thus, the employment was regular, and was work in accordance with a roster published in advance, and in this case, significantly in advance. Macmahon Mining argued that it was necessary to have a roster published significantly in advance and to make that available to employees because of the fly-in/fly-out nature of the work, the remote location and the nature of the work concerned. True that may be, but it does little more than reinforce the fact that the work was regular and ongoing and more consonant with permanent full time employment than casual employment.
  • 37. There was, in the Court's view, mutual expectation of continuity of employment subject only to termination of employment for cause, or termination as a consequence of the head contract ending. In that regard, Mr Williams' Contract of Employment was subject to constraints of the same nature as those of any employee. Any contract of employment might be terminated for cause (eg: by reason of the misconduct of the employee, or because that particular employee is no longer allowed on site by a head contractor or principal with control of access to the site), or may come to an end as a consequence of a contract or a project concluding. There is nothing in the nature of that situation which points towards Mr Williams being a "casual employee" and, if anything, it points away from him being a "casual employee".
  • 38. Mr Williams had, in accordance with the roster, regular work, and consistent starting and finishing times. This was not a case of an employee working for short periods of time on an irregular basis with hours varying from day to day and week to week. Those factors point to Mr Williams' employment being other than casual in nature.[18]
  • ...
  • 63. Section 638 of the WR Act seeks to exclude casual employees engaged for a short period from certain minimum entitlements on termination. However, that exclusion does not apply to casual employees, who like eligible casual employees for the purposes of parental leave, have been "engaged by a particular employer on a regular and systematic basis for a sequence of periods of employment during a period of at least 12 months". Again, the Parliament takes the concept of a casual employee as traditionally defined and redefines it for particular purposes, namely the exclusion from certain entitlements under the minimum entitlements on termination, except where the casual employee turns out to be, again looking retrospectively, an employee who has become employed on a regular and systematic basis for a sequence of periods of employment.
  • 64. In the Court's view, the Parliament has not in ss.264 and 638 of the WR Act redefined what constitutes a "casual employee" under the traditional definition of that phrase, but rather qualified it, looking retrospectively at the employment where it has been on foot for a period of 12 months or more, but then only for certain purposes, and in particular, parental leave and minimum entitlements on termination. It is significant that the Parliament has not defined "casual employee" in a manner different to the traditional definition of "casual employee", or qualified it (as it as done for parental leave and minimum entitlements on termination) in s.227 of the WR Act for the purposes of the guaranteed entitlement to annual leave. It would have been easy for it to do so, but it did not.
  • 65. The qualified definitions of casual employee in ss.262 and 638 of the WR Act assume that the person concerned commences as a casual employee within the meaning of that phrase under the traditional definition of "casual employee". Mr Williams' case is clearly distinguishable in that regard. Based on the traditional definition of "casual employee" he did not, for reasons set out above, commence employment as a casual employee.
  • 66. Mr Williams was also not employed for a sequence of "periods" of employment. His employment commenced on the basis that there would be a single ongoing period of employment, and that he would work in accordance with a roster which was known and certain at the time of commencement. Subsequently, he did work for a single continuous period of employment (and Macmahon Mining accept that his service was continuous) and therefore there was not "a sequence of periods of employment" within the meaning of the qualified definitions of "casual employee" in ss.262 and 638 of the WR Act. Thus, even if Macmahon Mining are correct in their contention that s.638(11) of the WR Act reflects Parliament's intention as to what constitutes a casual employee, Mr Williams does not meet that definition because he was only employed for a single period of employment, not a sequence of periods of employment over a period of 12 months or more.
  • 67. The Court also notes that a person who commences employment on the basis that that employment is to be regular and systematic, but not full-time, will not necessarily be a casual employee, but may be a part-time employee. Such a part-time employee would not be entitled to a casual loading under ss.185 and 186 because they would not be a casual employee.[19]

2. Under s.232(2) an employee is entitled to accrue an amount of paid annual leave, based on "nominal hours worked" during "each completed four week period of continuous service". For the relevant period in this case, 57 weeks, Macmahon Mining Services concedes there was continuous service.[20] The entitlement is to "1/13 of the number of nominal hours worked ... during that 4 week period."
3. The nominal hours therefore have to be worked out first. The nominal hours are then applied to each completed four week period of continuous service. They are not applied to each week in that period depending upon whether the employee did or did not work, or depending upon how many hours were worked, save where the specific provisions of s.229(1)(b) and s.229(4)(a) require additions and deductions.
4. Under s.229(1)-(3) the meaning of "nominal hours worked" is to be determined by reference to whether:
   1. an employee works a specific number of hours per week for the purposes of s.229(1); or
   2. if the employee does not work a specified number of hours per week, then the employee "is taken" for the purposes of s.229(1) to have nominal hours calculated which are:
      1. referable to the specified number of hours the employee was employed to work over a period;[21] or
      2. if the hours are not able to be determined but the employee is employed on a full-time basis, then the specified hours are 38 hours per week.[22]
5. Therefore, s.229(1)-(3) deals with employees who are to work:

1. specified hours per week: s.229(1); 2. full-time without specified hours: s.229(2); or

and in the latter two cases, the hours are nominated, at 38, under s.229(2), and calculated under s.229(3), and are taken to be the specified number of hours for the purposes of s.229(1). Thus s.229(1) is taken to apply to employees to whom s.229(2) and (3) apply.

1. Section 229(4) applies to an employee only if s.229(1) does not apply to the employment of the employee. Because s.229(1) is taken to apply to employees to whom s.229(2) and (3) apply, s.229(4) does not apply to an employee if the employee is caught by s.229(2) or (3).
2. The Court therefore needs to initially determine whether any one of s.229(1), (2) or (3) applied to Mr Williams' employment.
3. Section 229(1) is directed to a circumstance where an employee "is employed ... to work a specified number of hours per week". The wording of this provision makes it apparent that what is in issue is whether the employee "is employed" to work those specified hours, not whether the employee actually does work those specified hours. That interpretation is consistent with the concept of "nominal hours worked". Likewise, s.229(3) relates to the hours the employee is employed to work, rather than the hours that the employee actually does work. Section 229(2) is different because it does not envisage determination of the number of hours worked, but rather requires that the employee be employed on a full-time basis.
4. To determine whether or not Mr Williams was employed for a "specified number of hours" consideration must be given to what is meant by "specified". That which is "specified" is that which:
   • Is or has been definitely or specifically mentioned, determined, fixed or settled.[23]

Mention particularly; to make specific; to set down as required".[24]

1. In White v Whitcher[25] "specified age" in the Income Tax Act, 1918 (UK) was held to mean an age expressed by a definite number of years. It was not an age ascertainable by reference only to some other occurrence, such as the death of a testatrix who, in that case, had directed that an accumulated fund be paid to a beneficiary 20 years after her death and where, under the terms of the will, persons not born at the time of her death might be beneficiaries. Age was said to be of the essence under the statute.[26]
2. In Reid v Dawson[27] the United Kingdom Court of Appeal held that an agricultural tenancy created under an agreement for a term commencing on November 1 in one year and terminating on October 30 in the next year, was an agreement for a "specified period of the year", namely, 364 days.[28] In response to a submission that a "specified period of the year" under s.2(1) of the Agricultural Holdings Act, 1948 (UK) included periods of the year "which had some significance in agriculture such as the haymaking season or the summer grazing or the winter grazing"[29] Lord Justice Denning found that that construction was "impossible to put ... accurately into words"; whereas a period of days was "a specified period of the year" whether it be 364 days, 200, 250 or 350 days.[30] Lord Justice Morris found that although the period was not set out in express terms in the relevant contract (the contract having been orally renewed on the terms of an earlier written contract) the renewed term as to the period could be implied, and was therefore specified.[31]
3. The suspension of a bankruptcy order until a bankrupt had paid

15 shillings in each pound was held to be a suspension of the bankruptcy for an indeterminate time, not a "specified time" within the meaning of the Bankruptcy Act, 1914 (UK).[32] 4. In McMorran v A. E. Marrison (Contractors) Ltd[33] it was held that in order to specify a person it was not necessary to give the person's name, provided the person was "unambiguously identified".[34] It was also held that the specification of a class required no more than "to designate a group of persons by reference to some common characteristic, which may be positive or negative."[35] Examples of specification of a class were given as: * "All barristers who have chambers in the Temple."

"All persons working in the Temple, except barrister's clerks."[36]

1. In Andersen v Umbakumba Community Council[37] the Industrial Relations Court of Australia, applying Reid and Re Kutner, held that a "specified period of time" was a certain period of time, and that a contract of employment was for a "specified period of time" where the time of commencement and the time of completion were unambiguously identified by a term in the contract, by stating definite dates, or by stating the time or criterion by which one or other end of the period was to be fixed, and by stating the duration of the contract of employment. The contract was not for a "specified period of time" if either party had the right to terminate the contract by notice at any time between the commencement date and the nominal cessation date.[38]
2. Was Mr Williams employed to work a "specified number of hours per week" for the purposes of s.229(1)? The Contract of Employment refers to shifts under a roster based on a two weeks on/one week off cycle, and not the hours to be worked each week. The provisions of the Contract of Employment do not specify the hours to be worked each week, nor do they unambiguously identify what hours are to be worked each week. In order to do so the Contract of Employment would have to say that Mr Williams was to work, for example, "38 hours each week" or "five shifts each of 10 hours each week". The hours specified, must also be "per week" in order to meet the criterion prescribed by s.229(1). There is nothing in the Contract of Employment, or in the roster arrangements applicable to Mr Williams, which constitutes the specification of a number of hours "per week". Neither the criterion of a "specified number" of hours, nor the criterion that the number of hours specified be "per week", are met in Mr Williams' case. Therefore, s.229(1) does not, of itself, apply.
3. Section 229(1) can however apply, if Mr Williams meets the criterion established by s.229(2) or (3), because the meeting of the criterion for s.229(2) or (3), is "for the purpose of subsection (1)" of s.229.
4. Continuing with those statutory provisions related to a specific number of hours the question becomes: Was Mr Williams employed to work a "specified number ... of hours over a period ... that is not a week" for the purposes of s.229(3)?
5. It is first necessary to identify the "period ... that is not a week", or "non-week period" under s.229(3). In this case it is the three week roster block of "2 weeks on/1 week off". That is because the Contract of Employment says that Mr Williams "will work ... on a 2 weeks on/1 week off roster" and thus expressly prescribes the non-week period, which in this case is the shift cycle.
6. The arrangement under which Mr Williams was employed provided for him to work 12 hour shifts on a two week on/one week off roster. That is not a roster which expressly specifies the number of hours to be worked in the "non-week period" of three weeks. Although

Mr Williams did in fact work 14 consecutive 12 hour shifts before then having a week off, the Contract of Employment does not expressly specify that he was required to work 14 12 hour shifts. Further,

Mr Williams agreed to work under a shift roster system determined from time to time to be appropriate to the operations, and to work reasonable amounts of overtime. In circumstances where:

1. the number of 12 hour shifts to be worked during the non-week period is not specified; 2. the number of hours to be worked during the non-week period of three weeks is not specified;

1. the shift roster system may be changed from time-to-time; and

1. reasonable amounts of overtime had been agreed to be worked, but the hours of overtime to be worked are not specified,

it can be argued that Mr Williams was not employed to work a specified number of hours during the three week, or non-week, period. It might also be argued that because Mr Williams had to work a shift roster system which could be changed from time to time, he was not employed for a specified number of hours over a period.[39] Such an argument might be sought to be reinforced by the considerable variety of shift roster systems in existence. A brief review of judgments and decisions of courts and tribunals shows for example:

1. 12 hour shifts: 4 days on - 2 night shifts/2 day shifts, 3 days off (coal mining);[40]
2. an average of 152 hours per month on a continuous 6 day on - 6 day off roster, with the 6 days on comprising 2 morning shifts, followed by 2 afternoon shifts and then 2 night shifts, all shifts being 10 hours (aircraft engineering);[41]

1. a 16 week period of 12 hour night and day shifts followed by a period of leave (paint pigment manufacturing);[42]

1. 38 hours per week with summer and winter rosters (soft drink manufacturing);[43]
2. continuous 12 hour day shifts, 4 days on/4 days off (iron ore - rail operations);[44] and
3. 14 shifts, 7 days/7 nights, over a 28 day cycle, with each shift being 12 hours comprised of 10 ordinary hours plus 2 hours overtime (coal mining).[45]

1. Also, Mr Williams' agreement to work "reasonable amounts of overtime" might also support an argument that the number of hours is not specified, particularly as what is "reasonable" is not specified. What constitutes "reasonable amounts of overtime" might vary in the view of the employer and the employee, and it might vary from week to week or non-week period to non-week period depending upon circumstances related to the employee or the conduct of the operations. In Gibson v Bosmac Pty Ltd the then Chief Justice of the Industrial Relations Court of Australia observed that the extent of an employee's duty to work reasonable overtime required consideration not only of the employer's needs, but also "any obligations and personal interests of the employee."[46] In Australian Glass Manufacturers Co Pty Ltd & Ors v The Amalgamated Engineering Union & Anor it was held that "reasonable overtime" was not confined to work essential for the maintenance of plant and production.[47] In Mukesh v Refined Sugar Pty Ltd a Senior Deputy President of the Australian Industrial Relations Commission held that it was not reasonable for an employee to be asked "[a]t times" to "work an additional half shift either at the end or the beginning of his rostered shift", especially where his salary arrangements were structured differently to other employees who were prepared to work what the Senior Deputy President considered to be "excessive overtime", and even though there were staffing problems for the employer (but which were a consequence of the working patterns and arrangements adopted by the employer).[48]
2. What constitutes reasonable overtime is a matter capable of significant variation and complexity, and will almost always be dependent upon the particular circumstances of the case. It is therefore not a matter ordinarily capable of fixed specification as to the hours of overtime which are reasonable.
3. The above arguments lend weight to the argument that Mr Williams had no specified hours for the non-week period, both on the basis of a lack of specificity as to the number of hours to be worked, and the possibility of the hours being varied, in any event, by a shift roster change or the requirement to work reasonable hours.
4. The Court has already found that Mr Williams' "work was performed in accordance with a stable, organised and certain roster, with certainty of working hours, ongoing until the Contract of Employment was ended", [49] and that "he would work in accordance with a roster which was known and certain at the time of commencement."[50]
5. There are counter arguments. Although the number of shifts and the hours to be worked during the three week non-week period are not specified in the Contract of Employment, they were specifically fixed or settled, in particular by the roster which was set a year in advance. The evidence supports this argument because it shows that

Mr Williams' hours were fixed or set at 14 successive shifts of 12 hours duration followed by seven days off, giving 168 hours of work during the three week non-week period. Mr Williams' roster unambiguously identified what hours he had to work. It seems clear on the authorities that, perhaps except where taxation is involved,[51] subject matter can be specified by means of criteria, formula or positive or negative reference to a common characteristic.[52] 6. In this case the roster specified the hours Mr Williams was to work in each non-week period. 7. The fact that the hours were specified by the roster is reinforced by the evidence that there was no change to the roster system during

Mr Williams' employment with Macmahon Mining. Further, there was, seemingly, no requirement to work any overtime, let alone reasonable overtime. 8. Even if there had been a change of roster, and the roster had changed to a different non-week period, or to a per weekly roster, it would not have altered the pre-existing position, but rather would have led to a different factual matrix to which the provisions of s.229 would have to have been applied. 9. The argument as outlined above that this roster establishes a specified number of hours over a non-week period which Mr Williams was employed to work is, in the Court's view, the preferable one, subject to consideration of a number of issues raised by Macmahon Mining which are considered below. 10. The fact that s.229(1) applies, in its terms, to an employee working a specified number of hours per week, does not require a separate calculation to be done for each week worked by an employee whose hours worked are worked out in accordance with the formula in s.229(3), because the formula in s.229(3) takes account of, and incorporates, the "period" over which an employee is required to work, and must (bearing in mind the variety of roster arrangements which might apply to any given employee) incorporate those periods, which are sometimes days and not weeks, on which the employee is not working. In this case the period is three weeks for Mr Williams. It is only necessary to separately calculate the nominal hours worked by an employee in a particular week where deductions under s.229(1)(b) apply. In this case the deduction under s.229(1)(b)(i) for absence on leave which does not count as service does not apply, as there is no evidence that Mr Williams was absent on leave which does not count as service, and Macmahon Mining concedes that his service was continuous over the entire 57 weeks. In relation to s.229(1)(b)(ii) there is no evidence of there being any time worked to which a s.507 payment prohibition applies. By reason of the roster arrangements in place during the time that Mr Williams was employed the week period during the three week period when Mr Williams is not required to attend for work is simply time not worked. It is not unpaid authorised leave. 11. The approach taken by Macmahon Mining to the rostered week off, that is to exclude it from the period on the basis that it is unpaid leave, is to disaggregate the relevant period for the purposes of s.229(3). The relevant period during which Mr Williams' 168 hours are required to be worked is three weeks. In this respect it is important to observe that the Contract of Employment prescribes that Mr Williams "will work ... on a two weeks on/one week off roster." Given the variety of roster arrangements in place, and the variety of roster arrangements which might be put in place, it is difficult to conceive that the Parliament would pass legislation which would require periods of time not worked as a consequence of rostering arrangements to be disaggregated in the manner suggested by Macmahon Mining. 12. Finally, it must be observed that the result contended for by Macmahon Mining as to the quantum of annual leave accrued by Mr Williams is absurd, and cannot have been intended by the Parliament. Adopting the three concluded four week periods of continuous service pattern suggested by Macmahon Mining,[53] and inserting the actual hours worked by Mr Williams, gives the following table of actual hours worked:

1. This means that for every three completed four week periods of continuous service Mr Williams worked 672 hours, and for a 52 week (one year) period of continuous service, Mr Williams' actual hours were 2688 hours (672 multiplied by 4), plus a further 252 hours for the 13th four week period of continuous service, constituting 2940 actual hours worked for a 52 week period. A further 252 hours can then be added for the 14th completed four week period of continuous service, giving a total number of hours of 3192 actual hours worked in the 14 completed four week periods of continuous service. For this, Macmahon Mining contends that Mr Williams' total entitlement to paid annual leave is 136.65 hours, or less than four weeks leave at 38 hours per week, which totals 152 hours. Mr Williams would therefore receive less leave than a non-shift worker working from Monday to Friday for 7.6 hours per day or 38 hours per week or 1976 hours a year. He would also receive less leave than a shift worker working five 7.6 hour shifts in each week (or 38 hours per week or 1976 hours a year), such a shift worker being entitled to 190 hours (or five weeks) annual leave. For the reasons set out below, the Court considers that, in any event, Mr Williams is a full-time employee. He is also a shift worker. For him to receive less than four weeks leave when an ordinary full-time employee receives four weeks leave, and an ordinary full-time employee working shift work receives five weeks leave, is, in circumstances where Mr Williams is a full-time shift employee, manifestly absurd, and cannot have been intended to be the manner in which the Parliament intended the relevant provisions to apply.
2. For the above reasons, the Court concludes that Mr Williams was an employee required to work a specified number of hours over a

non-week period. Application of the formula in s.229(3) of the WR Act results in an outcome of 56 hours, and the application of s.229(1)(a)(ii) therefore means that Mr Williams' nominal hours worked were

38 hours per week. Applying s.232(2) to those nominal hours for

14 completed four week periods and adding 38 hours for shift work under s.232(3) gives a quantum of annual leave accrued for

Mr Williams of 201.69 hours, as calculated in Mr Williams' submissions. 3. For reasons set out above, because s.229(3) applies, s.229(4) can have no application to Mr Williams' employment. 4. However, if the Court's conclusion that Mr Williams was an employee required to work a specified number of hours over a non-week period under s.229(3) is wrong, the issue then becomes whether Mr Williams is employed on a full-time basis, but with terms and conditions of employment which do not determine the number of hours in a week that is to constitute employment on a full-time basis for him.[54] 5. The Court observed in Macmahon Mining Services (No.1) that

Mr Williams' "work was regular and ongoing and more consonant with permanent full-time employment than casual employment."[55] 6. For reasons set out above in relation to s.229(1) it is not possible to determine, on the basis of Mr Williams' terms and conditions of employment, the number of hours in a week that is to constitute employment on a full-time basis for him. It is quite clear however that the roster arrangements meant that he was a full-time shift employee. He worked 168 hours over a three week period, including seven day shifts and seven night shifts. In the first 52 weeks of employment he worked 2688 hours, or 712 hours more than a five day a week 38 hour a week full time employee. The fact that he had one week off in every three was a function of the roster system worked, and does not mean that he was not a full-time employee. It simply means that he had his time off in a block, whereas other full-time employees might have time off at different times and for different periods, depending upon which roster system might be worked.[56] 7. Therefore, the Court concludes that Mr Williams is an employee employed on a full-time basis for the purposes of s.229(2), and therefore, for the purpose of s.229(1), is taken to be employed to work 38 hours per week. Those were his nominal hours if he was a full time employee. Applying s.232(2) to those nominal hours for 14 completed four week periods and adding 38 hours for shift work under s.232(3) gives a quantum of annual leave accrued for Mr Williams of 201.69 hours, as calculated in Mr Williams' submissions. 8. For reasons set out above, if s.229(2) applies, s.229(4) can have no application to Mr Williams' employment. 9. Therefore, Mr Williams has an accrued annual leave entitlement of 201.69 hours.

1. Section 235(2) provides as follows:
   • (2) If the employment of an employee who has not taken an amount of accrued annual leave ends at a particular time, the employee must be paid a rate for each hour (pro-rated for part hours) of the employee's untaken accrued annual leave that is no less than the rate that, immediately before that time, is the employee's basic periodic rate of pay (expressed as an hourly rate).
2. The phrase "basic periodic rate of pay" is defined as having "the meaning given by s.178".[57] Section 178 defines "basic periodic rate of pay" as follows:
   • ... means a rate of pay for a period worked (however the rate is described) that does not include incentive-based payments and bonuses, loadings, monetary allowances, penalty rates or any other similar separately identifiable entitlements.
3. Section 173 provides as follows:
   • A term of a workplace agreement or a contract has no effect to the extent to which it purports to exclude the Australian Fair Pay and Conditions Standard or any part of it.
4. Section 233 provides as follows:

(1) An employee is entitled to forgo an entitlement to take an amount of annual leave credited to the employee by an employer if:

(a) a provision in a workplace agreement binding the employee and the employer entitles the employee to forgo the entitlement to the amount of annual leave; and

(b) the employee gives the employer a written election to forgo the amount of annual leave; and

(c) a provision in a workplace agreement binding the employee and the employer entitles the employee to receive pay in lieu of the amount of annual leave at a rate that is no less than the rate that, at the time the election is made, is the employee's basic periodic rate of pay (expressed as an hourly rate); and

(d) the employer authorises the employee to forgo the amount of annual leave.

Note: If, under this section, an employee forgoes an entitlement to take an amount of annual leave, the employee's employer may deduct that amount from the amount of accrued annual leave credited to the employee.

(2) However, during each 12 month period, an employee is not entitled to forgo an amount of annual leave credited to the employee by an employer that is equal to more than 1/26 of the nominal hours worked by the employee for the employer during the period.

(a) require an employee to forgo an entitlement to take an amount of annual leave; or

(b) exert undue influence or undue pressure on an employee in relation to the making of a decision by the employee whether or not to forgo an entitlement to take an amount of annual leave.

(4) If, under this section, an employee forgoes an entitlement to take an amount of annual leave, the employer must, within a reasonable period, give the employee the amount of pay that the employee is entitled to receive in lieu of the amount of annual leave.

1. Macmahon Mining's submissions on basic periodic rate of pay
2. Macmahon Mining submits that Mr Williams' rate of pay of $40.00 an hour for all work done during the period that he worked took express account of a number of entitlements including:

1. responsibilities, disabilities, allowances; 2. payment for all hours worked;

1. a loading in lieu of paid leave entitlements; and

1. compensation for shift, public holiday and weekend work,

under a clause in the Contract of Employment, set out in Macmahon Mining Services (No.1) as follows:

Macmahon Mining paid Mr Williams a "Flat Hourly Rate" of $40.00 per hour[58] under the Contract of Employment, which provided that:

• The rate of pay is all inclusive and takes into account all responsibilities, disabilities, allowances ... and includes payment for all hours necessary to undertake your rostered duties, and as a casual employee, a loading in lieu of paid leave entitlements. The rate includes compensation for any necessary shift, public holiday and weekend work.[59]

1. Macmahon Mining says that these entitlements must be deducted from the $40.00 an hour Flat Hourly Rate in order to arrive at Mr Williams' basic periodic rate of pay.
2. Macmahon Mining says that the casual loading is separately identifiable and can be taken to be at least 20% of the Flat Hourly Rate, that is an amount of $6.67 an hour. It relies on the evidence of Russell John Wood as follows:
   • 15. I believe that the Award, at that time, provided for a casual loading of 20%. The hourly rates paid by CRE Pty Ltd to its casual employees included that 20% loading.
   • 16. When CRE Pty Ltd was taken over by Macmahon Holdings, the hourly rates that had been paid to casual employees of Combined Resource Engineering Pty Ltd continued to apply.[60]

7. Based on my experience, it has been a long-standing condition (included in many industrial awards and agreements) for a casual to have a loading of between 15% to 25%, with 20% being the most common, applied to the rate of a similar permanent employee in lieu of the types of benefits that permanent employees are provided such as annual leave (and loading when that was applicable), sick leave, compassionate leave, jury service leave and public holidays.

8. Macmahon Contractors sometimes employs employees in mining and construction work on a casual basis. These employees are all paid a casual loading of 20% except at the Eaglefield Coal mine site in Queensland where Macmahon Contractors' casual employees are paid a 25% casual loading.[61]

1. Macmahon Mining therefore says that Mr Williams' basic periodic rate of pay was no more than $33.33 an hour.

Mr Williams' submissions on basic periodic rate of pay

1. Mr Williams' submits that there are two possible ways of applying the definition of basic periodic rate of pay to the Flat Hourly Rate.
2. The first way is to say that $40.00 an hour is not the basic periodic rate of pay because it includes, amongst other things, the casual loading. Because it is not the basic periodic rate of pay, and because no other rate is specified in the contract and there is no relevant APCS (because no award or agreement applied to Mr Williams),[62] then the basic periodic rate of pay for the purposes of Mr Williams' situation is simply unascertainable.
3. The second way, put in the alternative by Mr Williams, is that the definition of basic periodic rate of pay is such that it is to be worked out as proposed by Macmahon Mining, or in some similar way. That is, to disaggregate the $40.00 into its various parts to arrive at a rate which does not include those components which are excluded by the definition.
4. Mr Williams submits that whichever approach is adopted, the $40.00 per hour is the relevant rate, for the purposes of the calculation under s.235(2).
5. Mr Williams submits that if the basic periodic rate of pay is unascertainable then the $40.00 an hour rate is the only possible rate that can be used for the purposes of s.235(2). This is because Parliament could not have intended that an unascertainable basic periodic rate of pay would disentitle an employee to the guaranteed leave payment, and it must follow that $40.00 an hour is the only rate that can be applied. Further, Mr Williams submits that s.235(2) does not require payment for annual leave to be made at the basic periodic rate of pay. It requires it to be made "at no less than" that rate. Therefore, because the basic periodic rate of pay is unascertainable, and $40.00 is both the lowest and highest rate payable to Mr Williams, $40.00 an hour could not be less than the unascertainable basic periodic rate of pay.
6. If the second way of applying the definition of basic periodic rate of pay is applied then Mr Williams says that the rate of $40.00 an hour is "a rate of pay for a period worked (however the rate is described)."[63] From that must then be deducted "any incentive-based payments or bonuses, loadings, monetary allowance, penalty rates or any other similar separately identifiable instruments."[64] To be deducted an amount must fulfil three criteria:

1. it either is, or is similar to, the named payment; 2. it is something which is separately identifiable; and

1. it is an entitlement.
2. Mr Williams concedes that the loading in lieu of paid leave entitlements incorporated in the Flat Hourly Rate is a payment similar to the named payments, and therefore fulfils the first of the three criteria Mr Williams says must be fulfilled. However, Mr Williams says that the payment is neither separately identifiable nor is it an entitlement. It is argued that the requirement that the payment be separately identifiable means separately identifiable by quantum because the definition requires the making of a calculation by deducting the excluded payments to arrive at the basic periodic rate of pay. Therefore the requirement that the payments be separately identifiable must relate to quantum otherwise the required calculation cannot be made. It is then said that because the casual loading component of the Flat Hourly Rate is not separately identified it cannot be deducted, and, likewise, the other matters which compensation is said to be included in the Flat Hourly Rate cannot be deducted.
3. It is also argued that the so called casual loading is not relevantly an entitlement, because:

1. Mr Williams was not a casual employee and therefore there was no entitlement to casual loading under the WR Act or otherwise; 2. the casual loading itself was not an entitlement because it was, in terms, paid in lieu of the leave entitlement; and

1. the loading could not have been an entitlement because it is a payment specifically prohibited by ss.173, 232 and 233.
2. Therefore, Mr Williams says that the basic periodic rate of pay is $40.00 an hour.

1. There must be a basic periodic rate of pay. It cannot be unascertainable, as an employee is guaranteed annual leave, and payment for that annual leave under ss.232(2) and (3) and 235(2).
2. The issue in this case is whether the $40 an hour flat rate is the basic periodic rate of pay, or whether the basic periodic rate of pay can be calculated as some lesser sum.
3. Macmahon Mining submits that the basic periodic rate of pay is to be calculated by deducting a casual loading of 20%, being the casual loading referred to in the Flat Hourly Rate under the Contract of Employment. That approach ignores the fact that this Court has found that Mr Williams is not a casual employee,[65] and therefore is not a person to whom a casual loading (be it 20% or any other amount) could have been paid, or was payable. In short, there was no entitlement to a casual loading because Mr Williams was not a casual employee, notwithstanding that there was a sum paid in lieu of leave entitlements and which was ostensibly a casual loading. Furthermore, to the extent that the Contract of Employment purports to pay a loading in lieu of paid leave entitlements (which must include annual leave), the payment of the loading is a term that has no effect because of the provisions of s.173, read in conjunction with ss.232(2) and (3) and to 233.
4. Finally, the evidence relied upon by Macmahon Mining in relation to the quantum of casual loading is irrelevant for these purposes because the term as to the payment of the loading has no effect insofar as it purports to be in lieu of annual leave entitlements, and because it is irrelevant it is not admissible for this purpose.[66] Even if it were admissible the evidence is not such as to establish that a term that the quantum of any casual loading would be 20% ought to be implied.[67] The evidence is:
   1. not specific to Macmahon Mining, as opposed to other companies which seemingly have some association, albeit unexplained, with Macmahon Mining; and
   2. vague as to the quantum of casual loading which might be payable.
5. The evidence would be insufficient to establish, for example, that:

1. it is so obvious as to go without saying that the casual loading of 20% ought to be implied, or 2. a 20% total loading is necessary to give the Contract of Employment business efficacy, or

1. a 20% loading is so notorious that it constitutes a custom.[68]
2. Section 178 excludes from the basic period rate of pay "incentive based payments and bonuses, loadings, monetary allowances, penalty rates or any other similar separately identifiable entitlements."
3. Because s.178 speaks of "other similar separately identifiable entitlements" it follows that if entitlements to loadings, monetary allowances or penalty rates are included in Mr Williams' Flat Hourly Rate that they too must be "separately identifiable entitlements". There is nothing in the provisions of the Contract of Employment or the Flat Hourly Rate which makes any of the matters there referred to "separately identifiable entitlements". There is no specification of any of the matters referred to as an actual entitlement, save for the reference to paid leave entitlements which are also not specific as to what leave entitlements are included and the loading for which has no effect because of the provisions of s.173. Otherwise, it is not apparent what entitlement to allowances, or rates for shift, public holiday and weekend work Mr Williams actually had or which it was intended be compensated for. In the Court's view it is implicit that any of the entitlements referred to in s.178 as not being included in the rate of pay for the purposes of the basic periodic rate of pay must be quantifiable entitlements, otherwise a basic periodic rate of pay cannot be determined. Where, as here, there is neither specification nor quantification of any of the matters referred to, it cannot be an entitlement. The gist of an entitlement for these purposes is that an employee is to be paid a particular quantum. If that quantum is not, or cannot be, specified then there is no entitlement, or no entitlement which is payable.
4. For those reasons, the Court does not consider that the Flat Hourly Rate includes any loading, allowance or penalty rate, or other separately identifiable entitlement, for the purposes of s.178.
5. In any event, the provisions of s.235(2) do not require payment at the basic periodic rate of pay. Rather, they require payment at a rate "no less than" the basic periodic rate of pay. In those circumstances, Mr Williams' entitlement to paid annual leave can be met by payment at the Flat Hourly Rate.
6. As the Flat Hourly Rate is the only identifiable or quantifiable rate of pay in evidence, and because it cannot be "less than" the basic periodic rate of pay, it is appropriate that the Court use that rate of pay for calculation of the amount of annual leave payable to Mr Williams. The set-off claim

1. Macmahon Mining submits that Mr Williams worked 3,201 hours during the period of his employment, having been paid a total of $128,040 during that period, at the rate of $40 an hour.[69] Multiplying the number of hours worked by what Macmahon Mining says is the casual loading, namely the rate of $6.67 per hour, Macmahon Mining arrives at a sum of $21,350.67 paid to Mr Williams by way of casual loading.
2. Macmahon Mining argues that the 20% casual loading was paid to the applicant in lieu of paid leave entitlements only[70] and can therefore be taken to have been paid in lieu of annual leave, sick leave and public holidays. It is argued that the remainder of the rate of pay, namely $33.33 per hour is in consideration of the other matters referred to in the Flat Hourly Rate clause.
3. Macmahon Mining goes on to argue that the 20% casual loading can be disaggregated, assuming a full-time employee employed as a shift worker. Macmahon Mining Services argues that each of the entitlements to annual leave, sick leave and public holidays, pursuant to ss.232, 245 and 246, and 612 respectively, give an entitlement to five weeks, two weeks and two weeks leave respectively, and the proportion of total leave entitlements is therefore 55.5% to annual leave, and 22.225% to each of sick leave and public holidays. Applying that proportion of the total leave entitlements to the casual loading of $6.67 per hour results in $3.70 per hour for every hour that

Mr Williams was paid being appropriated for paid annual leave according to Macmahon Mining. 4. On the basis of the 3,201 hours worked Macmahon Mining says that $11,843.70 paid as part of the casual loading against the applicant's paid annual leave entitlement on termination is to be set-off against the claim for paid annual leave, which is $4,546.95, and that the paid annual leave entitlement has therefore been satisfied, there is therefore no breach as claimed, and the application must therefore be dismissed.

1. Mr Williams says that Macmahon Mining bears the onus of proving the amount paid as set-off which is a question of fact. Mr Williams says that Macmahon Mining cannot prove the amount of set-off because the Court has already found that there is no sufficient evidence to allow the Court to determine what sum might be allocated as a set-off, and therefore Macmahon Mining must be taken to have failed to establish its claim to set-off.[71]
2. Mr Williams also says that the alleged casual loading is not separately identifiable, and is not in any event, an entitlement.
3. Mr Williams says that the respondent proceeds on the false premise that the loading is a casual loading and can be taken to be at least 20% of the rate of $40 per hour.
4. Mr Williams says that the parties did not quantify the casual loading in the Contract of Employment, and having chosen not to do so, it is not now for the Court to do it for them. Further, the applicant says that there is no reason why 20% should be chosen as a figure to represent the casual loading. The applicant argues that the evidence contained in the affidavits of Wood and Ihlein is so generalised that it cannot provide a basis for the Court to re-write the contract of the parties to include an amount of 20% as the loading in lieu of paid leave entitlements.
5. Mr Williams notes that a casual loading is compensation for a loss of a basket of amenities and entitlements, including not only annual leave, sick leave and public holidays, but also personal, parenting and long service leave, redundancy pay, absence of security of employment and the inconvenience which accompanies casual employment. However, Mr Williams says that the loading in the contract is not a casual loading but a loading in lieu of paid leave only, and is therefore not a casual loading as traditionally understood nor as used in the WR Act.

Mr Williams argues that Macmahon Mining's analysis therefore proceeds on a false premise that the loading in the contract is a casual loading, which it is not. Further, Mr Williams argues that by claiming the 20% Macmahon Mining seeks credit for the whole of the notional payment which is intended to compensate for a much wider range of entitlements than annual leave, sick leave and public holidays, and points out that the WR Act is not the only source of paid leave entitlements for the applicant, and in particular, notes that no credit has been given to Mr Williams for loss of long service leave.

1. Following its judgment in Macmahon Mining Services (No.1) this Court made a declaration that:
   • Macmahon Mining is entitled to set-off any sum of money appropriated from the casual loading paid to Mr Williams in lieu of annual leave against any entitlement Mr Williams has to annual leave payment for accrued annual leave on termination of employment in accordance with ss.232 and 235(2) of the WR Act_._
2. Macmahon Mining's argument is that the casual loading can be disaggregated into entitlements in respect of annual leave, sick leave and public holidays for which Mr Williams would have been paid if he were not a casual employee on the basis that those entitlements equate to the casual loading, to which they have allocated a notional 20% loading. However, in the Court's view, the loading is not specifically a casual loading, and it does not identify particular paid leave entitlements which it is said to be in lieu of. Furthermore, it was not set at a specified amount. It is therefore not possible to accurately quantify the amount of the loading or the leave entitlements it was said to be in lieu of. The evidence therefore does not establish the essential building blocks for the claimed set-off.
3. In any event, Mr Williams now raises the argument that s.173 means that the term of the Flat Hourly Rate clause that provides that a loading is payable in lieu of paid leave entitlements is a term of no effect. The effect of s.173 was not a matter considered by the Court in Macmahon Mining Services (No.1). The Court accepts that s.173 has the effect of making the provision purporting to pay a loading in lieu of annual leave entitlements to be of no effect. A similar conclusion must follow insofar as the loading purports to be in lieu of sick leave entitlements.
4. Mr Williams is also correct in noting that a casual loading is compensation for the loss of a basket of amenities and entitlements, not limited to leave, but including, for example, termination and redundancy benefits.[72] In those circumstances, Macmahon Mining cannot allocate the notional 20% casual loading solely against annual leave, sick leave and public holidays. Proper allocation of any casual loading would require consideration of the wider basket of amenities and entitlements suggested by Mr Williams. And the difficulty with that course is that the evidence simply does not establish any basis on which those entitlements can be allocated in a specific way against specified quantums so as to allow the proper calculation of any set-off.
5. In all the circumstances, the set-off claim must fail.

1. Mr Williams was entitled to 201.69 hours of untaken accrued annual leave; 2. Mr Williams is entitled to be paid at the rate of $40 an hour for the 201.69 hours; and

1. there is no sum which can be set off against Mr Williams untaken accrued annual leave entitlement.
2. Therefore, Mr Williams is entitled to a payment of $8,067.69 for untaken accrued annual leave. There will be an order that Macmahon Mining pay Mr Williams that amount.

1. The Court will hear the parties as to orders to be made in respect of any required hearing as to penalty and costs.

I certify that the preceding ninety-three (93) paragraphs are a true copy of the reasons for judgment of Lucev FM

[1] [2009] FMCA 511 ("Macmahon Mining Services (No.1)").

[3] "WR Act". All subsequent references to sections in these Reasons for Judgment are to sections of the WR Act, unless otherwise specified.

[6] Citing the Explanatory Memorandum to the Work Choices Bill 2005, clauses 500 and 520.

[12] Macmahon Mining Services (No.1) at para.8 per Lucev FM.

[14] WR Act, s.229(4)(a)(ii), and see s.229(4A).

[15] 114 hours for each of the first two four week periods and 76 hours for the third four week period.

[16] The basis periodic rate of pay is in dispute, and is dealt with below: see especially paras.67-73 below.

[17] Macmahon Mining Services (No.1) at paras.7-10 per Lucev FM (footnotes omitted).

[18] Macmahon Mining Services (No.1) at paras.36-38 per Lucev FM.

[19] Macmahon Mining Services (No.1) at paras.63-67 per Lucev FM (footnotes omitted).

[20] Macmahon Mining Services (No.1) at para.66 per Lucev FM.

[23] The Oxford English Dictionary (2nd edn) (Oxford: Clarendon Press 1989) page 159.

[24] Chambers Concise Dictionary (Chambers, 1991) page 1026.

[25] (1927) 44 TLR 113 ("Whitcher").

[27] (1955) 1 QB 214; [1954] 3 All ER ("Reid").

[28] Reid QB at 218-219 per Denning LJ; All ER at 500 per Denning LJ; QB at 221 per Morris LJ; All ER at 501 per Morris LJ.

[29] Reid QB at 218 per Denning LJ; All ER at 500 per Denning LJ.

[30] Reid QB at 218-219 per Denning LJ; All ER at 500 per Denning LJ.

[31] Reid QB at 221 per Morris LJ; All ER at 501 per Morris LJ.

[32] Re Kutner [1921] 3 KB 93.

[33] [1944] 2 All ER 448 ("McMorran").

[35] McMorran at 450-451 per Asquith J.

[37] (1994) 126 ALR 121 ("Umbakumba Community Council").

[38] Umbakumba Community Council at 125-127 per von Doussa J.

[39] Cf. Umbakumba Community Council.

[40] Tucker v Tucker [2008] FMCAfam 254.

[41] Australian Licensed Aircraft Engineers Association v Glyndale Pty Ltd (2009) 179 IR 102; [2009] FMCA 188.

[42] Rogers v Millenium Inorganic Chemicals Ltd & Anor (2009) 178 IR 297; [2009] FMCA 1.

[43] Coca-Cola Amatil (Aust) Pty Ltd v LHMU [2007] AIRC 438.

[44] AFMEPKIU v BHP Billiton Iron Ore Pty Ltd [2006] WAIR Comm 5467.

[45] CFMEU v BHP Coal Pty Ltd (2008) 173 IR 56; [2008] AIRC 391.

[46] (1995) 60 IR 1 at 9 per Wilcox CJ.

[47] (1960) 1 FLR 302 at 303 per Spicer CJ and Eggleston J.

[48] PR 966177; [2006] AIRC 176 at paras.42-43 per Lacy SDP.

[49] Macmahon Mining Services (No.1) at para.36 per Lucev FM.

[50] Macmahon Mining Services (No.1) at para.66 per Lucev FM.

[51] See Whitcher. See also Copperart Pty Ltd v Federal Commissioner of Taxation (1994) 28 ATR 119 where the Commissioner's letter "specifying that an amount of tax is payable" was held to require an actual amount to be specified in the letter: at 124 per Davies J and 129 per Gummow J.

[55] Macmahon Mining Services (No.1) at para.36 per Lucev FM.

[56] See the examples cited in para.27 above.

[59] Macmahon Mining Services (No.1) at para.6 per Lucev FM.

[60] Affidavit of Russel John Wood affirmed 1 September 2008 at paras.15 and 16.

[61] Affidavit of Owen Leslie Ihlein sworn 1 September 2008 at paras.7 and 8.

[62] Australian Pay and Classification Standard: see ss.201-222.

[65] Macmahon Mining Services (No.1) at para.83(a) per Lucev FM.

[66] Evidence Act 1995 (Cth), s.55.

[67] Byrne & Frew v Australian Airlines [1995] HCA 24; (1995) 185 CLR 410 at 422 per Brennan CJ, Dawson and Toohey JJ ("Byrne").

[68] Byrne at 422-423 per Brennan CJ, Dawson and Toohey JJ.

[69] Affidavit of Ihlein, sworn 1 September 2008, annexures OI4 and OI5; Affidavit of Griffiths, sworn 29 August 2008, annexures HPLG4 and HPLG5.

[70] See the clause entitled "Flat Hourly Rate" set out in the Macmahon Mining Services (No. 1) at para.6 per Lucev FM.

[71] Citing Macmahon Mining Services (No.1) at para.77.

[72] Re Metal, Engineering and Associated Industries Award 1998, Part 1 (2000) 110 IR 247 at 314-315 per Munro J, Polites SDP and Lawson C.