Moran Health Care Group (WA) Pty Ltd v Liquor Hospitality and Miscellaneous Union WA Branch [2005] FCA 1529 (31 August 2005)

Last Updated: 25 November 2005

FEDERAL COURT OF AUSTRALIA

Moran Health Care Group (WA) Pty Ltd v Liquor Hospitality
and Miscellaneous Union WA Branch [2005] FCA 1529

WORKPLACE RELATIONS – award – construction of award – loading for employees who work on ‘any public holiday or day observed in lieu thereof’ – whether applicable to additional public holiday created on Monday when designated public holiday falls on Saturday or Sunday – Christmas Day, Boxing Day, New Year’s Day – whether limited to public holiday designated in substitution for public holiday on Saturday or Sunday – approach to construction – ordinary meaning of words – apparent policy of provision – loading extending to additional public holidays created where designated public holiday falls on weekend – underpayment established – appeal against Industrial Magistrate’s decision dismissed




Public and Bank Holidays Act 1972 (WA)



Nursing Assistants Award 2002





MORAN HEALTH CARE GROUP (WA) PTY LTD v LIQUOR, HOSPITALITY AND MISCELLANEOUS UNION, WA BRANCH
WAD 170 OF 2005


FRENCH J
31 AUGUST 2005
PERTH

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	WAD 170 OF 2005

On Appeal from the Industrial Magistrates Court of Western Australia

BETWEEN:	MORAN HEALTH CARE GROUP (WA) PTY LIMITED APPELLANT
AND:	LIQUOR, HOSPITALITY AND MISCELLANEOUS UNION, WA BRANCH RESPONDENT
JUDGE:	FRENCH J
DATE OF ORDER:	31 AUGUST 2005
WHERE MADE:	PERTH

THE COURT ORDERS THAT:

1. The appeal be dismissed.




Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	WAD 170 OF 2005

On Appeal from the Industrial Magistrates Court of Western Australia

BETWEEN:	MORAN HEALTH CARE GROUP (WA) PTY LIMITED APPELLANT
AND:	LIQUOR, HOSPITALITY AND MISCELLANEOUS UNION, WA BRANCH RESPONDENT

JUDGE:	FRENCH J
DATE:	31 AUGUST 2005
PLACE:	PERTH

REASONS FOR JUDGMENT

Introduction

1 Melissa Leanne Banfield is a member of the Liquor Hospitality and Miscellaneous Union, Western Australian branch (the Union). In December 2004 and January 2005, she was employed by Moran Health Care Group (WA) Pty Ltd (the Moran Group) as a second year nursing assistant at the Greenmount Gardens Nursing Centre. She was employed as a casual employee. She attended and completed rostered shifts on 27 and 28 December 2004 and 3 January 2005, all of which were observed in the State of Western Australia as public holidays by reason of the fact that each of 25 December 2004, 26 December 2004 and 1 January 2005 fell on a Saturday.

2 Ms Banfield was paid at the normal rate for the Monday attendances, albeit the Mondays were, in each case, public holidays under the provisions of the Public and Bank Holidays Act 1972 (WA). On 31 January 2005, the Union lodged a claim in the Industrial Magistrates Court naming the Moran Group as the respondent. In its statement of claim, the Union said that, for the pay period ending on 4 January 2005 which included 27 and 28 December 2004 and 3 January 2005, Ms Banfield was paid 54 hours at the ordinary rate of pay. It alleged that the Moran Group failed to pay her at the correct rate prescribed by cl 27.1 of the Nursing Assistants Award 2002 (the Award) and was thus in breach of the Award. Specifically, the Union complained that on 27 and 28 December 2004 and on 3 January 2005, Ms Banfield was entitled to a 50% loading by virtue of cl 27 of the Award. The industrial magistrate found the Union’s claim made out. He awarded a penalty and required the Moran Group to pay Ms Banfield the shortfall for the days in question, plus interest. The Moran Group now appeals against the industrial magistrate’s decision. For the reasons which follow, in my opinion, that appeal should be dismissed.

The Terms of the Award

3 The Award is in terms a variation of the Nursing Assistants Interim Award 1996. Clause 4 of the Award states that it binds, inter alia, the employers named in Schedule (a) and one of those is Moran Health Care Australia Pty Ltd. It is not in dispute that the present appellant was bound by the Award. The Award also binds private hospitals and residential care facilities, the Union and its members in the State of Western Australia. It is apparent from its terms that it applies specifically to people working in the relevant capacities in Western Australia.

4 Clause 27 of the Award deals with rates of pay on public holidays and is in the following terms:

‘27.1 An employee who works on any public holiday herein or day observed in lieu thereof, shall be paid a loading of 50% of the ordinary wage for the time worked in ordinary hours on that day.

27.2 For the purposes of this clause the following days shall be public holidays: New Year’s Day, Australia Day, Good Friday, Easter Monday, Anzac Day, Labour Day, Foundation Day, Sovereign’s Birthday, Christmas Day and Boxing Day.’

It is also necessary to have regard to the provisions of cl 18, which deal with shift and weekend penalties, and cl 19, which deals with calculation of penalties. Clause 18.2 provides:

‘All work performed during ordinary hours on a Saturday shall be paid at the rate of time and one half and on a Sunday at the rate of time and three quarters.’

Clause 19 provides:

‘Where an employee works hours which would entitle that employee to payment of more than one of the penalties payable in accordance with clause 16 - Overtime, clause 18 - Shift and weekend penalties and clause 27- Public holidays only the highest of any such penalty shall be payable.’

By way of example of their application these provisions have the effect that, if Christmas Day were to fall on a Saturday, an employee who worked on that Saturday would only be entitled to time and a half and not an extra 50% loading by reason of the fact that it was also Christmas Day.

The Industrial Magistrate’s Reasons for Decision

5 The Magistrate, in reasons for decision which were given on 15 June 2005, following a hearing on 8 June 2005, referred to the provisions of the Award and the submissions put to him by the Moran Health Care Group, which he characterised as follows (at 3-4):

‘The Respondent says that the loading prescribed by clause 27.1 of the Award does not apply to work on 27 December 2004, 28 December 2004 or 3 January 2005, because clause 27.2 stipulates the days which shall be public holidays for the purpose of clause 27 which are respectively Christmas Day (25 December), Boxing Day (26 December) and New Year’s Day (1 January).

In the alternative the Respondent argues that the Second Schedule of the State Act recognises Christmas Day (25 December), Boxing Day (26 December) and New Year’s Day (1 January) as public holidays. However it also provides that when New Year’s Day or Christmas Day falls on a Saturday or Sunday, the next following Monday is also a public holiday and when Boxing Day falls on a Sunday or Monday, the next following Tuesday is also a public holiday. It is the case therefore that the State Act provides for holidays in addition to the Christmas Day and New Year’s Day holidays when the holidays fall on a weekend and for a holiday in addition to Boxing Day when that holiday falls on a weekend or on a Monday. The Respondent contends that given that the State Act does not provide for holidays "in lieu" of the Christmas Day, Boxing Day and New Year’s Day holidays, clause 27.1 of the Award has no application to holidays under the State Act falling on 27 December 2004, 28 December 2004 and 3 January 2005. Accordingly the Respondent argues that the words, "or day observed in lieu thereof," contained in clause 27.1 of the Award are necessarily repugnant and of no effect. The Respondent argues that the words remain as a vestige of the former state award that has no application in the context of its current state as a federal award.’

6 The learned magistrate referred to the Union’s submissions and the fact that the particular days Ms Banfield worked were public holidays observed for Christmas Day, Boxing Day and New Years Day. He said (at 5):

‘The fact is that, by virtue of the State Act, Christmas Day 2004, Boxing Day 2004 and New Year’s Day 2005 were all observed as holidays on days other than the actual day on which they fell. It is obvious that clause 27.1, when read in conjunction with clause 27.2 as applied by virtue of the State Act is intended to enable employees to celebrate a public holiday on a week day for any Christmas, Boxing or New Year’s Day feast day occurring on a Saturday or Sunday. Such approach will give meaning and effect to the words contained in clause 27.1. The clause, in my view, is demonstrative of a substitution clause, which recognises that the public holiday associated with the feast day is sometimes observed on a day other than the feast day. That does not derogate from the actual observance of the feast day, but rather augments the feast day by enabling its celebration on a weekday rather than a weekend.’

7 The learned magistrate found the claim proved and subsequently made orders as follows:

‘1. The claim is proved.

2. A penalty of 5 penalty units ($550.00) is imposed upon the respondent which shall be paid to the claimant.

3. There is no order as to costs.

4. The respondent shall pay Ms Banfield, the subject person of the claim, the sum of $87.87 being the total underpayment payable plus interest thereon at the rate of 6% per annum calculated from 4 January 2005 to 15 June 2005 inclusive in the sum of $2.35.

5. The respondent is to pay to the claimant the sum of $40.00 being the value of the disbursement incurred in bringing its claim.’

A certified copy of that order was issued on 16 June 2005.

Grounds of Appeal

8 The Moran Group appeals against the learned magistrate's decision and relies upon a substituted appeal ground and particulars, which are in the following terms.

‘The learned Magistrate erred in law in finding that the Appellant breached the Nursing Assistants Award 2002 ("the Award") by its failure to pay the Respondent's member a loading pursuant to clause 27.1 of the Award for working on 27 December 2004, 28 December 2004 and 3 January 2005.

Particulars

(i) Clause 27.1 of the Award provides in terms that an employee who works on any public holiday herein or day observed in lieu thereof, shall be paid a loading of 50% of the ordinary wage for the time worked in ordinary hours on that day. Clause 27.2 provides that certain days are public holidays for the purposes of clause 27, which days include Christmas Day, Boxing Day and New Year’s Day.

(ii) The meaning of s 5 and the Second Schedule of the Public and Bank Holidays Act 1972 (WA) (the" State Act") is that 27 and 28 December 2004 and 3 January 2005 (days on which the Respondent's member relevantly worked) were public holidays in addition to, rather than in lieu of, the public holidays for Christmas Day, Boxing Day and New Year’s Day respectively.

(iii) The State Act is not inconsistent with the Workplace Relations Act 1996, the Award, or any other law of the Commonwealth, and accordingly section 109 of the Commonwealth Constitution is inapplicable.

(iv) To the extent that s 152 (1) of the Workplace Relations Act 1996 may be in its terms applicable by reason of the State Act, "dealing with a matter dealt with" in the Award (which is not admitted,) it is an invalid exercise of the legislative power of the Commonwealth Parliament and therefore does not operate to invalidate the State Act in relation to the matters dealt with by the State Act, or at all.’

Whether the Award was Breached

9 In my opinion, this case involves no question of inconsistency or constitutional law. It is simply a matter of the proper construction of the terms of cl 27.1 and 27.2 of the Award. Before turning to that construction, I have regard to the provisions of the Public and Bank Holidays Act 1972 (WA). Section 5 of that Act provides:

‘Subject to this Act, the several days specified, or appointed under the power, in the Second Schedule shall be public holidays and bank holidays throughout the State.’

The Second Schedule to the Act sets out a list in the following terms:

‘New Year’s Day (1st January).
Australia Day (26th January or, when that day falls on a Saturday or Sunday, the first Monday following the 26th January).

...

Christmas Day (25th December).
Boxing Day (26th December).

When New Year’s Day, Anzac Day or Christmas Day falls on a Saturday or Sunday the next following Monday is also a public holiday and bank holiday.

When Boxing Day falls on a Saturday, the next following Monday is also a public holiday and bank holiday.

When Boxing Day falls on a Sunday or Monday the next following Tuesday is also a public holiday and bank holiday.’

10 There is no published statement of reasons from the Australian Industrial Relations Commission relating to the Award. Nor is there a statement of reasons by the Commission in any decision bearing directly upon cl 27 of the Award. Counsel for the Moran Group did, however, refer to a decision of the Commission in a matter relating to the Electrical Power Industry, which was given on 4 August 1994 by Senior Deputy Presidents Hancock and MacBean and Commissioner O'Shea. In the course of that decision there was discussion about the provision that should be made for public holidays in an award. The Commission referred to the case presented on behalf of employees by a representative of the ACTU and other unions, that a standard for public holidays should form part of an award "safety net". The Commission was referred to the structure and objects of the Industrial Relations Act 1988 which were said to favour the determination of wages and conditions by bargaining but with a safety net of award prescribed terms. The safety net, it was said, should include provisions to ensure that employees had an entitlement to leisure or payment in lieu thereof on an adequate number of days loosely designated as "public holidays".

11 The union’s claims in that case sought a minimum of 10 prescribed public holidays plus one additional public holiday in each State as a safety net standard for workers covered by Federal awards. The 10 named days included New Year’s Day, Christmas Day and Boxing Day. The union also submitted that whenever New Year’s Day, Australia Day, Christmas Day or Boxing Day fell on a Saturday or Sunday a substitute holiday would be provided.

12 The case against the union claims was generally supported by the Commonwealth in the Australian Capital Territory and opposed by the States, the Northern Territory and most other interests. The Commission acknowledged that the major argument pertained to the autonomy of the States and Territories and the appropriate limits to the Commission’s exercise of its jurisdiction. The Commission was told that it did not have the authority to declare public holidays. That was a responsibility of parliaments and governments. Although it might prescribe leave with pay and require higher payments when an employee had worked at certain times, the Commission’s practice had been to recognise public holidays determined by the appropriate authorities and in various way to incorporate them in its awards. It was submitted to the Commission in the Electrical Workers’ case that the traditional approach was a proper one which ought to be continued.

13 The Commission agreed with the union's submission that a safety net perspective was appropriate and it went on to say (at 19):

‘We also accept that the declaration of public holidays, by whatever legal instrument, is prerogative of the various Governments. There is a need, therefore, to reconcile, if possible, the Commission's "safety net" function with the authority of the Governments. There are certain days which do not require any action by the States to permit their identification in the Commission's awards. No State law is necessary to define Christmas Day as 25 December, Boxing Day as 26 December or New Year’s Day as 1 January. ... The Commission, at its discretion, may prescribe any of these days to be holidays - just as it may make award provisions about "Saturdays" and "Sundays".’

And further (at 19):

‘Further, the Commission does not trespass on the States’ authority if it prescribes that, when a specified day such as Christmas Day or Australia Day falls on a Saturday or Sunday, there will be a holiday on the next Monday in lieu of the "actual" day. Such a prescription is limited, of course, to the Commission's awards.’

The Commission concluded (at 20):

‘Though there are some variations between States, we think that a prescription of ten days (excluding Easter Saturday) gives reasonable effect to the criterion of minimum change. With that standard in mind, we think that award provisions at this time should normally provide: -

. that holidays (or payment in lieu) be observed in respect of New Year’s Day, Good Friday, the Monday thereafter, Anzac Day, Christmas Day and Boxing Day;

. that holidays (or payment in lieu) be observed also in respect of the days specified in the relevant States and Territories as Australia Day, the Queen’s Birthday and Labour Day;

. for an additional holiday (or payment in lieu) which may be a day identified by a governmental prescription (for example, Melbourne Cup Day) or a day otherwise specified (for example, for a union picnic); and ;

. that when a prescribed holiday, other than Anzac Day, falls on a Saturday or Sunday, a substitute day is provided.’

The Commission went on to say:

‘We do not, however, accede to the union request that where "extra" public holidays - above the safety net standard - have existed in the past but are eliminated by a State or Territory, their continued observance should be enforced by the Commission. The Commission’s commitment is to the safety net, not the status quo (however defined). In effect, our decision allows for State or Territory autonomy, subject to meeting, as a minimum, the safety net standard.’

The Commission attached to its decision a draft order which provided, inter alia, that:

‘(b) (i) When Christmas Day is a Saturday or a Sunday, a holiday in lieu thereof shall be observed on 27 December .

(ii) When Boxing Day is a Saturday or Sunday, a holiday in lieu thereof shall be observed on 28 December.

(iii) When New Year’s Day or Australia Day is a Saturday or Sunday, a holiday in lieu thereof shall be observed on the next Monday.

(c) Where in a State, Territory or locality, public holidays are declared or prescribed on days other than those set out in (a) and (b) above, those days shall constitute additional holidays for the purpose of this award.’

14 I refer to the Electrical Worker’s decision by way of background. Nevertheless in the construction of the Award, as in statutory construction, the ordinary meaning of the words must be the point of departure. That is not say that regard may not be had to their industrial context and to intrinsic material which may explain their purpose and assist construction where there is more than one constructional choice open.

15 There are two ways of construing the term, ‘day observed in lieu thereof’ in cl 27 of the Award. One of those is to say that it applies on a limited basis to the circumstance in which a public holiday prescribed for one day is moved to another which is observed as the public holiday in lieu of the original date. That is the way that Australia Day is dealt with in the second schedule of the State Act. An alternative approach is to say that it is a term which is directed to the effective operation of a State law which prescribes a public holiday or sets up an alternative public holiday where the first public holiday, for example, falls on a Saturday. The State Act deals with Christmas Day, Boxing Day and New Years Day where they fall on a Saturday or Sunday, by declaring the following Monday to be, ‘also a public holiday’.

16 The Moran Group contends that the mechanism used in the Second Schedule to the State Act, amounts to the creation in each case of an additional public holiday rather than, as in the case of Australia Day, a substitute public holiday. In my opinion, that is nice parsing which undercuts the evident purpose and spirit of the provisions of the Award. Whether the Act nominally creates an additional public holiday on the Monday or simply shifts the day designated as the public holiday from a Saturday to a Sunday to a Monday, as with Australia Day, the Monday, in each case, can properly be said to be a day observed ‘in lieu’ of the public holiday.

17 There is, in my opinion, no policy reason underpinning the application to cl 27 of the distinction sought to be made on behalf of the Moran Group. When regard is had to the ancestry of this kind of provision which appears from the Electrical Power Industry Award, it is consistent with the approach that I have mentioned. The construction adopted by the industrial magistrate was correct. It accords with the ordinary meaning of the language of the Award. It accords with its effective operation and it accords with its evident policy.

18 There is, in my respectful opinion, no merit in the alternative construction. It goes without saying that there is no question of inconsistency or any constitutional issue that arises. This is a case in which the Award simply picks up the provisions of State law relating to public holidays albeit it confines the relevant public holidays to which the clause applies by reference to the lists set out in cl 27.2.

19 For these reasons, the appeal will be dismissed.

I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French.

Associate:

Dated: 2 September 2005

Counsel for the Appellant:	Mr RL Hooker and Ms JJ Furey
Solicitor for the Appellant:	Jacqueline J Furey
Counsel for the Respondent:	Mr A Gill with Mr Swinbourne
Solicitor for the Respondent:	Andrew Gill
Date of Hearing:	31 August 2005
Date of Judgment:	31 August 2005