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Federal Court of Australia - Full Court |
Last Updated: 23 March 2010
FEDERAL COURT OF AUSTRALIA
Woolworths Limited v Shop Distributive & Allied Employees Association (Queensland Branch) Union of Employees [2010] FCAFC 29
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Citation:
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Woolworths Limited v Shop Distributive & Allied Employees Association
(Queensland Branch) Union of Employees [2010] FCAFC 29
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Appeal from:
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Shop Distributive & Allied Employees Association (Queensland Branch)
Union of Employees v Woolworths Limited (ACN 000 034 819)
[2009] FCA 441
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Parties:
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File number(s):
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QUD 127 of 2009
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Judges:
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GRAY, EMMETT AND GRAHAM JJ
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Date of judgment:
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Catchwords:
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INDUSTRIAL LAW – long service leave
– rate of pay – collective agreement referring to provisions of
State Act – whether
"ordinary rate being paid" to employee includes
additional rates for regular non-rotating afternoon shifts, regular non-rotating
night shifts or regular Sunday shifts for employees rostered to work such
shifts
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Words and Phrases:
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"full pay" – "the ordinary rate being paid to the
employee"
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Legislation:
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Acts Interpretation Act 1901 (Cth), ss 8,
14A, 14B, 32A
Fair Work Act 2009 (Cth), ss 562, 570 Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth), Sch 1 s 2, Sch 2 cll 3, 11, Sch 3 cl 2 Industrial Relations Act 1999 (Qld), Sch 4, Sch 5, ss 4, 5, 43, 43(2), 43(6), 45, 46, 46(1), 46(2), 43(3), 46(12) Industrial Relations Bill 1999 Workplace Relations Act 1996 (Cth), Pt 2 Sch 8, Sch 8 cll 10, 13, 13(1), 13(3), 13(4), 14, 20, ss 4(1), 8, 824, 849, 849(2) |
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Cases cited:
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Glover v Tip Top Bakeries (1984) 8 IR 308
cited
Shop Distributive and Allied Employees’ Association v Woolworths Ltd [2006] FCA 616 (2006) 151 FCR 513 cited Shop Distributive & Allied Employees Association (Queensland Branch) Union of Employees v Woolworths Limited (ACN 000 034 819) [2009] FCA 441 cited |
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Place:
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Brisbane
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Division:
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FAIR WORK DIVISION
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Category:
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Catchwords
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Number of paragraphs:
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94
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Solicitor for the Appellant:
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Herbert Geer
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Counsel for the Respondent:
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Mr AK Herbert
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Solicitor for the Respondent:
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Sciacca’s Lawyers and Consultants
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AND:
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THE COURT ORDERS THAT:
2. There be no order as to the costs of the appeal.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal
Court Rules.
The text of entered orders can be located using Federal Law
Search on the Court’s website.
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ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA
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BETWEEN:
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WOOLWORTHS LIMITED
Appellant |
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AND:
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SHOP DISTRIBUTIVE & ALLIED EMPLOYEES ASSOCIATION (QUEENSLAND BRANCH)
UNION OF EMPLOYEES
Respondent |
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JUDGES:
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GRAY, EMMETT AND GRAHAM JJ
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DATE:
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22 MARCH 2010
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PLACE:
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BRISBANE
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REASONS FOR JUDGMENT
GRAY J:
The nature and history of the proceeding
1 This appeal raises the question of the appropriate rates of pay for certain employees of the appellant who work non-rotating rosters involving afternoon shifts, night shifts or Sunday work. The terms and conditions of employment of those employees of the appellant in south-east Queensland were governed by an agreement certified pursuant to the Industrial Relations Act 1999 (Qld) ("the IR Act"), called the Woolworths Limited Supermarkets Distribution Centres (South-East Queensland) Certified Agreement 2004 ("the Woolworths Agreement"). As a result of amendments to the Workplace Relations Act 1996 (Cth) ("the WR Act"), which came into operation on 27 March 2006, the Woolworths Agreement came to be a preserved collective State agreement and to be enforceable under the WR Act. The Woolworths Agreement does not contain detailed provisions about rates of pay for long service leave. Instead, it refers to the provisions of the IR Act, which use terms such as "full pay", "ordinary rate" and "ordinary time". At issue is the proper interpretation of the long service leave provisions of the IR Act, in conjunction with the provisions of the Woolworths Agreement relating to the employees in question.
2 In the proceeding at first instance, the respondent to this appeal, the Shop Distributive & Allied Employees Association (Queensland Branch) Union of Employees ("the Queensland SDA") was the applicant, and the appellant, Woolworths Limited ("Woolworths") was the respondent. The Queensland SDA was registered pursuant to the IR Act. On the coming into operation of the amendments to the WR Act on 27 March 2006, the Queensland SDA became a transitionally registered association, pursuant to the WR Act. The Queensland SDA and Woolworths are the parties to the Woolworths Agreement. The proceeding at first instance invoked the jurisdiction conferred on the Court by s 849(1)(b) of the WR Act (now repealed) to give an interpretation of a collective agreement on the application of an organisation or person bound by the agreement. Clause 20(1) of Sch 8 to the WR Act provided that a preserved collective State agreement may be enforced as if it were a collective agreement.
3 On 6 May 2009, the learned primary judge made a declaration in the following terms:
Clause 7.6 of the Woolworths Limited Supermarkets Distribution Centres (South East Queensland) Certified Agreement 2004 (No CA643 of 2004), being a Preserved State Agreement ("the PSA"), when read in conjunction with the terms of Chapter 2 Part 3 of the Industrial Relations Act 1999 (Qld) in relation to an entitlement to long service leave, grants an entitlement to an employee (whose employment is regulated by the PSA) engaged by the respondent on non-rotating afternoon shifts or night shifts, to payment for long service leave at a wage rate which includes amounts payable to that employee whilst at work, as set out in clauses 6.3.3(c), 6.3.3(d) and 6.8 of the PSA.
Her Honour’s reasons for judgment are published as Shop
Distributive & Allied Employees Association (Queensland Branch) Union of
Employees v Woolworths Limited (ACN 000 034 819) [2009] FCA 441.
The Woolworths Agreement
4 Clause 1.5 of the Woolworths Agreement contains a dictionary of definitions applicable to terms used elsewhere in the Woolworths Agreement. The following definitions are relevant:
1.5.1 An "Employee" shall be taken to mean and include all persons for whom wage rates are prescribed within this Agreement and who are involved in those duties detailed within clause 1.4 of this Agreement.
...
1.5.4 A "Weekly Employee" shall mean a full-time or part-time employee engaged on a weekly hire.
1.5.5 A "Full-Time Employee" shall mean a weekly employee who is engaged within any of the classifications defined in this Agreement and, within the parameters of Part 6 of this Agreement, works a maximum of one hundred and fifty-two (152) ordinary hours in each four (4) week cycle.
...
1.5.12 "Ordinary Time Earnings" shall mean the actual ordinary rate of pay the employee receives for the ordinary hours of work performed, excluding overtime, annual leave loadings, shift allowances or other penalty rates, fares and travelling time and other extraneous payments including bonuses and over-award payments.
1.5.13 "The Company" shall mean Woolworths Limited.
1.5.14 "The Union" shall mean the Shop, Distributive & Allied Employees Association, (Queensland Branch), Union of Employees.
1.5.15 "Day Shift" shall mean any shift which commences at or after 6.00 a.m. and ceasing at or before 6.00pm daily. Providing that ordinary hours may be commenced between (and including) 5.00am and 6.00am by mutual agreement. Mutual agreement is not required on the occasion of each shift so worked, but an employee may at any time revoke agreement to start work prior to 6.00am and return to the previous roster as soon as practicable, in no case more than 7 days after notice of revocation. "Nightshift" has precedence over job functions.
1.5.16 "Afternoon Shift" shall mean any shift commencing at or after 2.00 p.m. and ceasing at or before midnight.
1.5.17 "Night Shift" shall mean any shift that commences at or after 10.00 p.m. and ceasing at or before 7:30a.m.
5 Clause 5.2 of the Woolworths Agreement deals with wages. Clause 5.2.1 begins with the words "Adults - the ordinary weekly adult rates of pay shall be as follows". The rest of cl 5.2.1 consists of a table, setting out wage rates for positions graded from I to VI, the rates being applicable from three sequential dates, indicating the wage increases that had been agreed.
6 Clause 6.1.1 contains the following provisions relevant to a full-time employee who is a weekly employee:
(a) The weekly ordinary hours of all full-time employees may be rostered so as not to exceed an average of thirty-eight (38) hours per week in one (1) of the following forms:-
(i) Thirty-eight (38) hours in one (1) week; or
(ii) Seventy-six (76) hours in two (2) consecutive weeks; or
(iii) One hundred and fifty-two (152) hours in four (4) consecutive weeks.
(b) The ordinary time hours of all full-time employees shall not exceed eight (8)
hours per day;
Provided, that where there is mutual agreement between the Company and the individual employee, the ordinary time hours may exceed eight (8) hours but not exceed ten (10) hours per day, where an employee works a roster other than nineteen (19) days in a four (4) week cycle.
(c) Where an employee agrees to work nine (9) days in a two (2) week cycle, the week in which the majority of hours are worked shall not exceed forty-two and a half (421/2) hours.
(d) A maximum number of five (5) starts in any one (1) week
(e) No employee shall be required to commence work more than once per day.
7 Clause 6.2 deals with rostering arrangements. Clause 6.2.2 provides, so far as relevant:
(a) The ordinary time hours of all weekly employees may be rostered on up to five (5) days within the following constraints:-(i) Monday to Friday for all employees; or(ii) Monday to Saturday for all employees engaged after 1st January 1989 or by mutual agreement with existing employees at that time; or
(iii) Monday to Sunday for all employees engaged after 23rd September 1993 or by mutual agreement with existing employees at that time.
(b) The spread of shifts in which employees may work ordinary time hours will be as follows:-
Acacia Ridge
Day Shift - Monday to Sunday
Afternoon Shift - Monday to Sunday
Night Shift - p.m. Sunday to a.m. Sunday
Everton Park
Day Shift - Monday to Sunday
Richlands
Day Shift - Monday to Sunday
Afternoon Shift - Sunday to Saturday
Night Shift - p.m. Sunday to a.m. Sunday
Beenleigh Road
Day Shift - Monday to Sunday
Afternoon Shift - Monday to Sunday
Night Shift - p.m. Sunday to a.m. Sunday
8 Clause 6.3 contains provisions relating to shift work. Provision is made for the payment of additional amounts to employees working at times that might be considered to fall outside normal working hours in cl 6.3.3 as follows:
(b) Weekly employees required to work ordinary hours on a Saturday, will be paid a loading of twenty five percent (25%) of the applicable ordinary time rate.
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(c) Non Rotating Afternoon Shift - All employees who by direction of the Company work ordinary working hours on Afternoon Shift (as defined) without rotation shall be paid in addition to the appropriate weekly rate prescribed in clause 5.2 (Wages), an amount per ordinary time hour equal to the following:-
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(d) Non Rotating Night Shift - All employees who by direction of the Company work ordinary working hours on Night Shift (as defined) without rotation shall be paid in addition to the appropriate weekly rate prescribed in clause 5.2 (Wages), an amount per ordinary time hour equal to following:-
...
or such higher amount as may be determined by a General Ruling of the Queensland Industrial Relations Commission.
9 Clause 6.8.1(a) of the Woolworths Agreement provides:
All weekly employees engaged after 10th May 1996, who work a roster which includes Sunday as ordinary hours of work, shall be paid for all work performed on Sunday at the rate of 175% of their ordinary rate (ie 75% in addition to the ordinary time rate).10 Clause 7.6 is headed "Long Service Leave". It provides:
The entitlement of an employee to long service leave shall be as described in the provisions of Chapter 2 Part 3, of the Industrial Relations Act 1999, or as amended from time to time.The IR Act
11 Section 43 of the IR Act is found in Pt 3 of Ch 2. Section 43(2) provides:
An employee is entitled to long service leave on full pay of― (a) for the first 10 years continuous service--8.6667 weeks; and(b) if the employee has completed at least a further 5 years continuous service―another period that bears to 8.6667 weeks the proportion that the employee’s further period of continuous service bears to 10 years.
12 Section 43(6) provides:
An employee who is entitled to long service leave elsewhere than under this Act, is entitled to leave that is at least as favourable as the entitlement under this section.13 Section 46 of the IR Act is also found in Pt 3 of Ch 2. The provisions of s 46 relevant to this case are:
(1) The employer must pay the employee for long service leave at the ordinary rate being paid to the employee immediately before the leave is taken.
(2) However, if the employee is, immediately before taking the leave, being paid at a higher rate than the ordinary rate, the employer must pay the employee at the higher rate.
(3) An employer must not reduce an employee’s usual rate, before an employee starts long service leave, with intent to avoid the employer’s obligation under subsection (2).
By s 46(12), the phrase "usual rate" is defined for the purposes of s 46 as "the rate at which the employee is being paid for ordinary time, being a rate that is higher than the ordinary rate."
14 There is no definition of the phrase "ordinary time" in the IR Act.
The facts
15 Because what was sought was an interpretation of the Woolworths Agreement, it is not necessary to have regard to very many facts. All that is necessary to know, and it is common ground, is that Woolworths employs full-time employees who are weekly employees, who meet their obligations to work an average of 38 ordinary hours per week by working non-rotating afternoon shifts (as contemplated by cl 6.3.3(c) of the Woolworths Agreement), non-rotating night shifts (as contemplated by cl 6.3.3(d) of the Woolworths Agreement), or rosters including Sunday as ordinary hours of work (as contemplated by cl 6.8.1(a) of the Woolworths Agreement). It has been the practice of Woolworths to pay employees their long service leave at the ordinary weekly adult rates of pay prescribed in the table in cl 5.2.1 of the Woolworths Agreement.
The primary judge’s reasons for judgment
16 At [26] of the primary judge’s reasons for judgment, her Honour said:
The clear tension in these proceedings arises from the different terminology used in s 43 and s 46 of the State Act, and the resolution of those differences in determining the entitlement of relevant employees to the current rate of pay on long service leave.17 At [29], her Honour identified as a "key plank" of the case for Woolworths the proposition that payment at the "ordinary rate" for the purposes of s 46 of the IR Act was payment at the ordinary weekly adult rates specified in cl 5.2.1 of the Woolworths Agreement. At [30], her Honour described the case put on behalf of Woolworths as "not sustainable." At [31], her Honour said:
First, I consider that any employee who is engaged on terms and conditions specified in cll 6.3.3(c), 6.3.3(d) and 6.8 of the PSA is entitled during long service leave to payment of the sum prescribed in each of those clauses in addition to the base rate of pay specified in cl 5.2.1 for each ordinary hour of work. In my view this is the ordinary English literal meaning of the expression "full pay" in relation to those employees engaged under those clauses of the PSA. I agree with the submission of [counsel for the Queensland SDA] that in relation to such employees any lesser sum would not be full payment for the time that they are absent from work, as contemplated by the definition of "full pay" in Sch 5 of the State Act.Her Honour then quoted from the judgment of Layton J of the Industrial Court of South Australia in Glover v Tip Top Bakeries (1984) 8 IR 308 at 313, concerning the anomaly of paying an employee on leave less than his or her usual entitlement. At [32], her Honour said that she did not find the definition of "Ordinary Time Earnings" in cl 1.5.12 of the Woolworths Agreement helpful, because the defined expression was used only in relation to superannuation in the Woolworths Agreement itself. At [33], her Honour referred again to the "tension" between s 43(2) and s 46 of the IR Act and then set out a number of propositions. She did not consider that s 43 was inconsistent with s 46 or that s 46 applied to the exclusion of s 43. She accepted a submission of counsel for the Queensland SDA that one employee’s "ordinary time" may be different from that of another employee, depending on rostering arrangements and shift patterns. She described the rates set out in cl 5.2.1 as "default rates of pay" and said that the combined effect of cll 5.2.1, 6.3.3(c), 6.3.3(d) and 6.8 of the Woolworths Agreement is to prescribe different ordinary rates of pay for employees working regular non-rotating afternoon shifts or night shifts or Sunday shifts, where such shifts are the ordinary hours of the relevant employee. She accepted the submission of counsel for the Queensland SDA that such non-rotating shifts can be contrasted with the position of employees who work such shifts as overtime and who are entitled to different rates of pay. Her Honour concluded that the "ordinary rate" payable to non-rotating shift workers is found in cl 6.3.3(c) and cl 6.3.3(d). Similarly, the ordinary rate payable to workers whose ordinary hours include a Sunday shift is found in cl 6.8. These "ordinary rates" are different from the "ordinary rate" payable to other employees. Her Honour said that the concepts of "ordinary rate" in s 46(1) of the IR Act and "full pay" for the purposes of s 43 could be reconciled by requiring that "full pay" in s 43 be taken to mean the rate the industrial agreement prescribed as being payable in respect of each ordinary hour worked by a particular worker.
18 In [34], the primary judge expressed the view that, if she were incorrect in finding that the "ordinary rate" incorporated the sum specified in cll 6.3.3(c), 6.3.3(d) or 6.8, it was clear that s 46(2) contemplated that different or enhanced rates of relevant employees are payable for long service leave. Her Honour said that it is clear that relevant employees engaged under cl 6.3.3(c) or cl 6.3.3(d) or cl 6.8 are paid "a higher rate than the ordinary rate" for ordinary hours, as contemplated by s 46(2), and that such employees are entitled to that higher rate for the purposes of long service leave.
The jurisdiction of the Court
19 It is clear that the Court would not have jurisdiction to deal with an application that required nothing more than the interpretation of the provisions of a State statute. This is not such a case. Section 849 of the WR Act conferred on the Court jurisdiction to interpret the Woolworths Agreement, in its statutory manifestation as a preserved collective State agreement, pursuant to the provisions of Pt 2 of Sch 8 to the WR Act. Section 849 and the provisions of Sch 8 have now been repealed, along with the rest of the WR Act. The relevant legislation is now the Fair Work Act 2009 (Cth) ("the Fair Work Act"). Section 849 appears not to have a specific counterpart in the Fair Work Act, but s 562 of the Fair Work Act confers on the Court jurisdiction in relation to any matter (whether civil or criminal) arising under the Fair Work Act. The proceeding at first instance was resolved by the declaration of 6 May 2009 before the repeal of the provisions of the WR Act. This appeal was commenced prior to that repeal. Accordingly, by s 8 of the Acts Interpretation Act 1901 (Cth), especially para (e), rights and obligations created by the repealed provisions, and legal proceedings in respect of such rights and obligations, are to be dealt with as if the repealing Act had not been passed, unless a contrary intention appears. Nothing in either the Fair Work Act or the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) demonstrates a contrary intention.
20 If cl 7.6 of the Woolworths Agreement operates to incorporate by reference into the Woolworths Agreement the relevant provisions of the IR Act, the Court has jurisdiction to interpret those provisions as provisions of the Woolworths Agreement, pursuant to s 849 of the WR Act. Compare Shop Distributive and Allied Employees’ Association v Woolworths Ltd [2006] FCA 616 (2006) 151 FCR 513 at [24]. In the present case, there is some ambiguity in the words "shall be as described" in cl 7.6 of the Woolworths Agreement. If those words are taken to mean that the provisions of the IR Act from time to time relating to long service leave are incorporated by reference into the Woolworths Agreement, there is no difficulty. If cl 7.6 were to be construed as manifesting an intention that the Woolworths Agreement (with its statutory force) was not to cover the field of long service leave, so that the IR Act simply continued to operate in relation to that subject-matter, then the interpretation of the provisions of the IR Act would be a matter involving State law. This latter view would not mean that the jurisdiction of the Court was ousted altogether. A controversy about the proper construction of cl 7.6 of the Woolworths Agreement would give rise to a matter within the jurisdiction of the Court. The controversy that is the subject of that matter includes the proper construction of the provisions of the IR Act. Accordingly, the Court would have jurisdiction to deal with all aspects of the matter, including the proper construction of the provisions of the IR Act.
21 The position is complicated somewhat by some of the provisions of Pt 2 of Sch 8 to the WR Act. Clause 13(1) provided that a preserved collective State agreement is taken to include the terms of the original collective agreement, as in force immediately before 27 March 2006. Clause 13(3) was in the following terms:
If, immediately before the reform commencement, a provision of a State or Territory industrial law would have determined, in whole or in part, a preserved entitlement of a person who would have been bound by, or whose employment would have been subject to, the original collective agreement, then, to that extent, that provision, as in force at that time, is taken to be a term of the preserved collective State agreement.22 Clause 13(4) contained a definition of "preserved entitlement" that did not include any reference to long service leave. If cl 7.6 of the Woolworths Agreement were to be construed as not incorporating by reference the provisions of the IR Act relating to long service leave, cl 13(3) of Sch 8 to the WR Act would not have had the effect of converting the provisions of the IR Act into terms of the Woolworths Agreement as a preserved collective State agreement. Again, this result would not deprive the Court of jurisdiction to interpret those terms as part of the matter generated by the controversy over the meaning of cl 7.6 of the Woolworths Agreement. Whatever else might be said about the status of the provisions of the IR Act, any controversy about their proper construction would clearly be part of that matter.
23 There was some argument about the reference in cl 7.6 of the Woolworths Agreement to possible future amendments to the relevant provisions of the IR Act. Counsel for Woolworths argued that the effect of cl 13(1) of Sch 8 to the WR Act was to freeze the terms of the preserved collective State agreement as they were in force immediately before "the reform commencement". He contended that this would freeze the provisions of the IR Act for this purpose as they were at that time, immediately before midnight on 26 March 2006. It is difficult to accept this argument, in the face of the clearly ambulatory intent of cl 7.6 of the Woolworths Agreement. It is unnecessary to resolve it for the purposes of the present case, however, because it is common ground that there have been no amendments to the relevant provisions of the IR Act.
24 In short, whether the relevant provisions of the IR Act are incorporated by reference into the Woolworths Agreement by cl 7.6, or whether they are left to operate of their own force, their proper construction is part of the matter in respect of which the jurisdiction of the Court has been invoked properly, both at first instance and in this appeal.
The correct rate of pay for long service leave
25 Substantial parts of the grounds of appeal, and of the written submissions of counsel for Woolworths, were devoted to criticism of the reasoning of the primary judge. There were criticisms of her Honour’s suggestion that there was tension between s 43 and s 46 of the IR Act. There was criticism of her Honour’s reference to the ordinary English meaning of "full pay", when that term was defined in Sch 5 to the IR Act. There was criticism of her Honour for relying on Glover v Tip Top Bakeries. It is unnecessary to deal with these questions at length. The provisions of the IR Act are not easy to construe, and the description of the relationship between s 43 and s 46 as involving "tension" is not inappropriate. The primary judge’s reference to the ordinary English meaning of "full pay" in [31] of her reasons for judgment is followed in the next sentence by a reference to the definition of "full pay" in Sch 5 of the IR Act. It could not therefore be said that her Honour misled herself by relying on the ordinary meaning of a defined term. The reference to the judgment of Layton in Glover was more by way of illustration of the difficulties of interpretation than by way of treating Glover as authority on the provisions in question in this case.
26 The crucial question is whether the primary judge came to the correct conclusion about the proper construction of the provisions of the IR Act.
27 Although the question is not easy, it does appear that it is not possible to regard the requirement of "full pay" as dominant over the requirement of payment at the "ordinary rate" under s 46(1) or at the "higher rate" under s 46(2). The definition of "full pay" in Sch 5 of the IR Act does not substitute easily for the words "full pay" in s 43(2). There is something to be said for the submission of counsel for Woolworths that s 43(2) is concerned with the temporal length of the entitlement to long service leave, rather than the rate of pay. The definition of "full pay", referring to "the time that an employee is absent from work", appears to be consistent with this submission. The effect of the provision seems to be that an employee entitled to long service leave has a right to payment for the full period of that leave, not merely for part of that period. The question of the rate of pay that will be used to calculate what is "full pay" for that purpose requires the application of s 46(1) or s 46(2).
28 It is easier to read into s 46(1) of the IR Act the definition of "ordinary rate" in Sch 5. The ordinary rate contemplated is the rate payable for ordinary time under the relevant instrument, award or agreement, in this case the Woolworths Agreement. It is noteworthy that the rate for ordinary time is the rate for the ordinary time of the particular employee. This is apparent from the use of the words "for an employee" in the definition of "ordinary rate", as well as from the words "being paid to the employee" in s 46(1). The ordinary rate is the rate for the ordinary time of the individual employee whose entitlement is being considered.
29 In the absence of a definition of "ordinary time" in the IR Act, it is necessary to determine from the terms of the Woolworths Agreement itself what is the ordinary rate for the ordinary time of the employees contemplated by this proceeding. Counsel for Woolworths contended that the rate for the ordinary time of every employee is found in the table of rates in cl 5.2.1 of the Woolworths Agreement, ie. the "ordinary weekly adult rates of pay". For some employees, whose work is confined to weekdays and who do not perform work on regular afternoon or night shifts, that undoubtedly would be the case. As appears from Shop Distributive and Allied Employees’ Association v Woolworths Ltd at [36], there is a good deal of authority giving a technical meaning to the phrase "ordinary time rate of pay" so that it includes only the rate of pay for fixed standard hours and not for overtime or usual customary time. In the present case, the phrase "ordinary time rate of pay" is not used.
30 Clause 6.1.1 of the Woolworths Agreement designates how the ordinary hours of full-time employees are to be calculated. Clause 6.2.2(a) makes it clear that the ordinary time hours of all weekly employees are subject to rostering arrangements. Those rostering arrangements may include (for employees engaged after 23 September 1993 or by mutual agreement with those who were already engaged at that date) Sunday work. Further, as cl 6.2.2(b) states, ordinary time hours may include afternoon shifts and night shifts for employees at a number of the Woolworths establishments covered by the agreement, as well as Sunday work. The consequence is that the times worked by employees working non-rotating afternoon shifts under cl 6.3.3(c), non-rotating night shifts under cl 6.3.3(d), and rosters including Sunday, as ordinary hours of work are taken to be the ordinary time of those employees. The rates to which those persons are entitled for working those ordinary hours are to be treated as the ordinary rates of pay of those employees. For the purposes of s 46(1), the ordinary rate being paid to an employee working non-rotating afternoon shifts or non-rotating night shifts or rosters involving Sunday as ordinary hours of work are the rates paid to them to compensate them for working at those times. They are therefore the rates that s 46(1) of the IR Act, and therefore cl 7.6 of the Woolworths Agreement, require that those employees be paid in respect of their long service leave entitlements.
31 The primary judge was therefore correct to conclude that the "ordinary rate" payable to employees working non-rotating afternoon and night shifts and the "ordinary rate" payable to workers on rosters including Sundays were the rates found in cll 6.3.3(c), 6.3.3(d) and 6.8 of the Woolworths Agreement respectively.
32 If this conclusion is wrong, it is difficult to dismiss the primary judge’s alternative conclusion that s 46(2) of the IR Act entitled those employees to payment during long service leave at their respective rates, on the basis that they were paid at "a higher rate than the ordinary rate". Counsel for Woolworths attempted to argue that s 46(2) is to be regarded only as a provision requiring over-award payments, or similar extra payments such as higher duties allowances, to be taken into account. It is difficult to separate over-award payments, or payments for performance of higher duties on a temporary basis, from payments for the performance of regular shift work or Sunday work. The phrase "higher rate" is apt to capture all of those instances of elevated levels of pay.
Conclusion
33 The primary judge was correct to make the declaration that she made. It
follows that the appeal must be dismissed. No question
of costs arises, because
of s 824 of the WR Act (see now s 570 of the Fair Work Act). The complexity of
the issues in this appeal
makes it impossible to say that the appeal was
instituted vexatiously or without reasonable cause, and none of the other
occasions
on which the Court can award costs has occurred.
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I certify that the preceding thirty- three (33) numbered paragraphs are a
true copy of the reasons for judgment herein of the Honourable
Justice
Gray.
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Associate:
Dated: 22 March 2010
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IN THE FEDERAL COURT OF AUSTRALIA
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QUEENSLAND DISTRICT REGISTRY
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FAIR WORK DIVISION
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QUD 127 of 2009
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ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA
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BETWEEN:
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WOOLWORTHS LIMITED
Appellant |
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AND:
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SHOP DISTRIBUTATIVE AND ALLIED EMPLOYEES ASSOCIATION (QUEENSLAND BRANCH)
UNION OF EMPLOYEES
Respondent |
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JUDGES:
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GRAY, EMMETT AND GRAHAM JJ
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DATE:
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22 MARCH 2010
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PLACE:
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BRISBANE
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REASONS FOR JUDGMENT
EMMETT J:
34 This appeal is concerned with whether employees of the appellant, Woolworths Limited (Woolworths), who worked afternoon shifts, night shifts and on Sundays are entitled to be paid, when taking long service leave, at a rate that includes additional hourly amounts which they are paid when working.
35 Section 849 of the Workplace Relations Act 1996 (Cth) (the Workplace Act) provides that the Court may give an interpretation of a collective agreement on application by an organisation or person bound by the agreement. The decision of the Court is final and conclusive and is binding on the organisations and persons bound by the agreement and the employees whose employment is subject to the agreement that have been given an opportunity of being heard by the Court. The respondent, the Shop Distributive and Allied Employees Association (Queensland Branch) Union of Employees (the Union), commenced a proceeding in the Court claiming a declaration interpreting a written agreement between Woolworths and the Union. The agreement is described as Woolworths Limited Supermarkets Distribution Centres (South East Queensland) Certified Agreement 2004 (the 2004 Certified Agreement). The 2004 Certified Agreement is a collective agreement within the meaning of the Workplace Act.
36 On 6 May 2009, the Court made declarations interpreting the 2004 Certified Agreement in the manner contended for by the Union. By notice of appeal of 27 May 2009, Woolworths appeals from those orders.
37 The 2004 Certified Agreement was made in pursuance of the Industrial Relations Act 1999 (Qld) (the Queensland Act) on 21 December 2004. The 2004 Certified Agreement was certified by the Queensland Industrial Relations Commission pursuant to the Queensland Act on 9 March 2005 to operate from 24 October 2004 until 23 October 2007. Under clause 1.6, the 2004 Certified Agreement is to apply to Woolworths Distribution Centres in South East Queensland. The parties bound by it are Woolworths, the employees of its distribution centres and the Union. Clause 7.6 of the 2004 Certified Agreement deals with long service leave. Clause 7.6 provides that the entitlement of an employee to long service leave "shall be as described" in the provisions of Part 3 of Chapter 2 of the Queensland Act "as amended from time to time".
38 Part 3 of Chapter 2 of the Queensland Act, which includes of ss 42 to 57 inclusive, deals with long service leave. Section 43(2) provides that an employee is entitled to long service leave on full pay of 8.6667 weeks for the first ten years continuous service. If the employee has completed at least a further five years continuous service, the employee is entitled to long service leave on full pay of another period that bears to 8.6667 weeks the proportion that the employee’s further period of continuous service bears to ten years. Under s 43(6), an employee who is entitled to long service leave elsewhere than under the Act is entitled to leave that is at least as favourable as the entitlement under s 43.
39 Section 46(1) of the Queensland Act provides that the employer must pay the employee for long service leave at the ordinary rate being paid to the employee immediately before the leave is taken. Under s 46(2), if the employee is, immediately before taking the leave, being paid at a higher rate than the ordinary rate, the employer must pay the employee at that higher rate. Section 46(3) provides that an employer must not, with the intent to avoid the employer’s obligation under 46(2), reduce an employee’s usual rate before an employee starts long service leave. Section 46(12) provides that usual rate means the rate at which the employee is being paid for ordinary time, being a rate that is higher than the ordinary rate.
40 Section 4 of the Queensland Act provides that the Dictionary in Schedule 5 defines particular words used in the Queensland Act. Under the Dictionary, the following terms are defined:
• full pay means payment in full for the time that an employee is absent from work.
• ordinary rate, for an employee under a certified agreement, means the rate that the certified agreement states is payable for ordinary time.
The term ordinary time is not defined in the Dictionary.
41 Clause 5.2.1 of the 2004 Certified Agreement provides that the ordinary weekly adult rates of pay are as set out in the table set out in that clause. Clause 5.2.5 provides that the ordinary hourly rate of wages for weekly employees is to be calculated by dividing the appropriate rate by 38.
42 Clause 6.2 of the 2004 Certified Agreement deals with rostering arrangements. Under clause 6.2.1(a), every full-time and part-time employee is to be given a regular commencing and ceasing time for each day. Under clause 6.2.2(a) the ordinary time hours of all weekly employees may be rostered on up to five days within the following constraints:
• Monday to Friday for all employees.
• Monday to Saturday for all employees engaged after 1 January 1989.
• Monday to Sunday for all employees engaged after 23 September 1993.
43 Clause 6.3 deals with shift provisions. Clause 6.3.1 provides that no part of the 2004 Certified Agreement is to preclude the operation of shifts commencing at varying times or at times that vary from the majority of employees working on such shift, whether they be on day shift, on afternoon shift or on night shift. Clauses 6.3.3(c) and 6.3.3(d) deal respectively with non-rotating afternoon shift and non-rotating night shift. Each provides that all employees who, by direction of Woolworths, work ordinary working hours on afternoon shift or night shift, as the case may be, without rotation, are to be paid, in addition to the appropriate weekly rate prescribed in clause 5.2, an amount per ordinary time hour equal to the amounts stated in the tables in the respective clause.
44 Clause 6.8 deals with Sunday work. Clause 6.8.1(a) provides that all weekly employees who work a roster which includes Sunday as ordinary hours of work are to be paid for all work performed on Sunday at a rate of 175% of their ordinary rate, that is to say, 75% in addition to the ordinary time rate.
45 The question is whether the employees of Woolworths who work on non-rotating afternoon shifts, on non-rotating night shifts or on rosters that include Sundays as ordinary hours are entitled to be paid, when on long service leave, at the rates specified in clauses 6.3.3(c), 6.3.3(d) and 6.8.1(a) respectively. Woolworths contends that they are not so entitled and, in that regard, places reliance on the definition of ordinary rate in the Dictionary. It says that, when s 46(1) refers to the ordinary rate it imports a reference to clause 5.2.1 of the 2004 Certified Agreement, thereby limiting the entitlement of the employee to the ordinary weekly adult rate of pay applicable to that employee as set out in the table in clause 5.2.1.
46 Woolworth’s contention cannot be sustained. The contention ignores the reference to ordinary time in the definition of ordinary rate in the Dictionary. The term ordinary time is not defined in the Queensland Act. The term must be understood in the light of the provisions of a particular certified agreement. That is to say, the definition in the dictionary of ordinary time assumes that a certified agreement will state a rate for ordinary time in relation to a particular employee. That is clearly the function of clauses 6.3.3(c), 6.3.3(d) and 6.8.1(a).
47 Clause 5.2.1 of the 2004 Certified Agreement provides for an ordinary weekly adult rate of pay for different categories of employee. It says nothing about ordinary time. That topic is dealt with in clause 6.3 and in clause 6.8.l so far as relevant to the present question. Thus, each of clause 6.3.3(c) and clause 6.3.3(d) deals with ordinary working hours. Clause 6.8 deals with ordinary hours of work. It is those clauses that state the rate that is payable for ordinary time for those employees to whom those clauses relate. The rates determined in accordance with those clauses therefore are the ordinary rates for the employees to whom those clauses apply. Further, by the operation of s 46(2), if an employee to whom one of those clauses applies is, immediately before taking long service leave, being paid at a higher rate than that provided for in the relevant clause, that employee is to be paid for long service leave at that higher rate.
48 The conclusion reached by the primary judge as to the operation of
s 46 is correct. The appeal must be dismissed.
Associate:
Dated: 22
March 2010
|
ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA
|
|
BETWEEN:
|
WOOLWORTHS LIMITED
Appellant |
|
AND:
|
SHOP DISTRIBUTIVE & ALLIED EMPLOYEES ASSOCIATION (QUEENSLAND BRANCH)
UNION OF EMPLOYEES
Respondent |
|
JUDGES:
|
GRAY, EMMETT AND GRAHAM JJ
|
|
DATE:
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22 MARCH 2010
|
|
PLACE:
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BRISBANE
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REASONS FOR JUDGMENT
GRAHAM J:
Jurisdictional issues
49 Schedule 8 of the Workplace Relations Act 1996 (Cth) (‘the Act’) had effect by virtue of s 8 of the Act. Schedule 8 relevantly for present purposes commenced on 27 March 2006, being the ‘reform commencement’. By virtue of clause 10 of Schedule 8 to the Act a ‘preserved collective State agreement’ was taken to come into operation on the reform commencement if, immediately before the reform commencement:
‘(a) the terms and conditions of employment of an employee were determined, in whole or in part, under a State employment agreement (the original collective agreement); and
(b) that employee was one of a number of employees who were bound by the agreement or whose employment was subject to the agreement’
50 ‘State employment agreement’ was defined in s 4(1) of the Act to mean an agreement:
‘(a) between an employer and one or more of the following:
...(ii) a trade union; and
(b) that regulates wages and conditions of employment of one or more of the employees; and
(c) that is in force under a State ... industrial law; and
(d) that prevails over an inconsistent State award.’
51 The Woolworths Limited Supermarkets Distribution Centres (South-East Queensland) Certified Agreement 2004 (No. CA643 of 2004) (‘the agreement’) was certified by the Queensland Industrial Relations Commission on 9 March 2005 and was to operate from 24 October 2004 until its nominal expiry on 23 October 2007. The coverage of the agreement was set out in clause 1.4. It is common ground that the agreement was a State employment agreement such that a preserved collective State agreement was taken to come into operation on the reform commencement i.e. 27 March 2006. Under clause 14 of Schedule 8 to the Act the nominal expiry date of the preserved collective State agreement was also 23 October 2007. The terms of the preserved collective State agreement which were taken to have come into operation on 27 March 2006 were as set out in clause 13 of Schedule 8 to the Act which relevantly provided:
‘13(1) A preserved collective State agreement is taken to include the terms of the original collective agreement, as in force immediately before the reform commencement....
13(3) If, immediately before the reform commencement, a provision of a State ... industrial law would have determined, in whole or in part, a preserved entitlement of a person who would have been bound by, or whose employment would have been subject to, the original collective agreement, then, to that extent, that provision, as in force at that time, is taken to be a term of the preserved collective State agreement.’
52 Clause 13(4) defined ‘preserved entitlement’ to include entitlements to matters such as annual leave and annual leave loadings, but did not include long service leave. For reasons which will shortly appear, the relevant terms of the preserved collective State agreement that was taken to come into operation on 27 March 2006 in this case were to be discerned by reference to clause 13(1) of Schedule 8 to the Act.
53 Clause 20(1) of Schedule 8 to the Act provided for the enforcement of preserved collective State agreements as if they were collective agreements and s 849 of the Act empowered the Court to give an interpretation of a collective agreement on the application of, amongst others, an organisation bound by the agreement. Under s 849(2) the decision of the Court was to be final and binding on the organisations and persons bound by the agreement who were given an opportunity of being heard by the Court.
54 By s 2 and Schedule 1 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (‘the Transitional Provisions Act’), Part 20 of the Act, including s 849, and Schedule 8 to the Act, dealing, relevantly, with the transitional treatment of State employment agreements, were repealed with effect from 1 July 2009. However, clause 2 of Schedule 3 to the Transitional Provisions Act provided for preserved State Agreements to continue in existence in accordance with the provisions of that Schedule and, by virtue of clause 3 of Schedule 2 to the Transitional Provisions Act, the Act continued to apply on and after 1 July 2009 in relation to conduct that occurred before 1 July 2009.
55 Item (2) in clause 11 of Schedule 2 to the Transitional Provisions Act provided:
‘To avoid doubt, the WR Act [the Act] continues to apply, on and after the WR Act repeal day [1 July 2009], in relation to orders made under that Act, including as it continues to apply under subitem (1).’56 Part 7 of the agreement was headed ‘LEAVE PROVISIONS’. Clause 7.6 had the heading ‘Long Service Leave’. It provided:
‘7.6 Long Service LeaveThe entitlement of an employee to long service leave shall be as described in the provisions of Chapter 2 Part 3, of the Industrial Relations Act 1999, or as amended from time to time.’
57 Part 3 of Chapter 2 of the Industrial Relations Act 1999 (Qld) (‘the IR Act’) to which reference was made in clause 7.6 of the agreement made provision for long service leave for employees.
58 The IR Act contained a dictionary which defined particular words used in it (see s 4 and Schedule 5).
59 The definition of ‘employee’, directs one back to s 5 of the IR Act which relevantly provided:
‘5(1) An employee is–(a) a person employed in a calling on wages or piecework rates; or
(b) a person whose usual occupation is that of an employee in a calling; or
(i) the person is working under a contract of labour only, or substantially for labour only; or(c) a person employed in a calling even though–
...
(d) a person who is a member of a class of persons declared to be employees under section 275; or
(e) each person, being 1 of 4 or more persons who are, or claim to be, partners working in association in a calling or business;
...’
In Schedule 5 ‘calling’ was defined to mean –
‘(a) a craft, manufacture, occupation, trade, undertaking or vocation; or (b) a section of something mentioned in paragraph (a).’60 It seems to me that clause 7.6 of the agreement was directed at providing an entitlement to long service leave equivalent to the entitlement under the IR Act, but not as afforded by the Act (see s 43(6) of the IR Act). It may be that the entitlement for which clause 7.6 provided was no more favourable than the entitlement for which Chapter 2 Part 3 of the IR Act provided but the source of the entitlement was different such that the terms of clause 7.6 of the agreement became terms of the preserved collective State agreement in accordance with clause 13(1) of Schedule 8 to the Act.
61 The above records, in a somewhat convoluted way, that the Court had jurisdiction to deal with this matter, as the primary judge did on 6 May 2009 (see Shop Distributive & Allied Employees Association (Queensland Branch) Union of Employees v Woolworths Limited (ACN 000 034 819) [2009] FCA 441 especially at [11]-[12]) and the Full Court may hear and determine the present appeal.
Long service leave as described in Chapter 2 Part 3 of the Industrial Relations Act 1999 (Qld)
62 An employee’s entitlement to long service leave under the IR Act was set out in s 43 of the IR Act. By virtue of subsection (1) the section applied to ‘all employees, other than seasonal employees’.
63 Section 43 relevantly provided:
‘43 ...(a) for the first 10 years continuous service–8.6667 weeks; and (b) if the employee has completed at least a further 5 years continuous service–another period that bears to 8.6667 weeks the proportion that the employee’s further period of continuous service bears to 10 years.(2) An employee is entitled to long service leave on full pay of–
...
(6) An employee who is entitled to long service leave elsewhere than under this Act, is entitled to leave that is at least as favourable as the entitlement under this section....’
(emphasis added)
64 Section 45 of the IR Act made provision for the taking of long service leave. It relevantly provided as follows:
‘45... (2) An employee and employer may agree when the employee is to take long service leave. (3) If the employee and employer can not agree, the employer may decide when the employee is to take leave by giving the employee at least 3 months written notice of the date on which the employee must take at least 4 weeks long service leave. ...’65 Importantly for present purposes, s 46 of the IR Act made provision for payment for long service leave. It relevantly provided:
(2) However, if the employee is, immediately before taking the leave, being paid at a higher rate than the ordinary rate, the employer must pay the employee at the higher rate. (3) An employer must not reduce an employee’s usual rate [meaning the rate at which the employee is being paid for ordinary time, being a rate that is higher than the ordinary rate], before an employee starts long service leave, with intent to avoid the employer’s obligation under subsection (2). ... (5) If, during the employee’s leave-‘46(1) The employer must pay the employee for long service leave at the ordinary rate being paid to the employee immediately before the leave is taken.
(6) If an employee is entitled to receive an amount representing commission in the employee’s long service leave payment, the employer must pay the default average commission unless- ... ... (9) An employee and employer may agree on the times when, and the way in which, the employee will be paid for long service leave. ... (11) An amount payable for long service leave becomes payable at a time agreed between the employee and employer or ... ...’ (emphasis added)(a) the ordinary rate is increased above the higher rate-the employer must pay the employee at the increased rate for the part of the leave period that the increased rate applies to; or
(b) the ordinary rate is reduced-the employer may pay the employee at the reduced rate for the part of the leave period that the reduced rate applies to.
66 The dictionary contained in Schedule 5 to the IR Act defined ‘ordinary rate’ for an employee under an industrial instrument, federal award or federal agreement, to mean ‘the rate the instrument, award or agreement states is payable for ordinary time’. Neither s 4 of the IR Act nor Schedule 5 contained an ‘unless the contrary intention appears’ preamble to the several definitions in the Schedule, but the lack of such an expression was cured by s 32A of the Acts Interpretation Act 1954 (Qld) (the ‘Interpretation Act’) to which reference is made hereafter.
The expression ‘ordinary time’ was not defined in the IR Act.
67 Nowhere in the agreement was a rate stated as one ‘payable for ordinary time’. Clause 5.2.1 contained a table recording the ‘ordinary weekly adult rates of pay’ for ‘Adults’ and clause 5.2.5 converted such a rate into an hourly rate by providing:
‘5.2.5 The ordinary hourly rate of wages for weekly employees shall be calculated by dividing the appropriate age or classification rate by thirty-eight (38).’
However, the definitions of ‘Full Time Employee’ and ‘Part-Time Employee’ contained in clauses 6.1.1 and 6.1.2 of the agreement give some clue as to what was considered to be ‘ordinary time’, for the purposes of the agreement, for which the ‘ordinary weekly adult rates of pay’ were payable.
68 Part 5 of the agreement was entitled ‘WAGES AND RELATED MATTERS’. It’s separate paragraphs had headings as follows:
‘5.1 Classifications’ ‘5.2 Wages’ ‘5.3 Payment of Wages’ ‘5.4 Allowances’ ‘5.5 Superannuation’69 Part 6, which followed, had the heading ‘HOURS OF WORK, BREAKS, OVERTIME, SHIFTS, WEEKEND WORK’.
The several paragraphs under Part 6 had the following headings:
‘6.1 Engagement’ ‘6.2 Rostering Arrangements’ ‘6.3 Shift Provisions’ ‘6.4 Rostered Day Off’ ‘6.5 Meal Break’ ‘6.6 Rest Pauses’ ‘6.7 Overtime ‘6.8 Sunday Work’70 The definitions to which reference has been made included:
(a) The weekly ordinary hours of all full-time employees may be rostered so as not to exceed an average of thirty-eight (38) hours per week in one (1) of the following forms:- (i) Thirty-eight (38) hours in one (1) week; or (ii) Seventy-six (76) in two (2) consecutive weeks; or (iii) One hundred and fifty-two (152) hours in four (4) consecutive weeks. (b) the ordinary time hours of all full-time employees shall not exceed eight (8) hours per day; Provided, that where there is mutual agreement between the Company and the individual employee, the ordinary time hours may exceed eight (8) but not exceed ten (10) hours per day, where an employee works a roster other than nineteen (19) days in a four (4) week cycle.‘6.1.1 A "Full-Time Employee" shall mean a weekly employee who is engaged as such and shall, pursuant to Part 6, work within the following parameters:
(a) The weekly ordinary hours of part-time employees may be rostered so as to not exceed thirty-two (32) hours per week....
6.1.2 A "Part-Time Employee" shall mean a weekly employee who is engaged as such and shall, within accordance of Part 6 (sic). work within the following parameters:-
(b) A minimum weekly engagement of twelve (12) ordinary hours. (c) A roster of not more than twenty (20) working days in a four (4) week cycle, or ten (10) working days in a two (2) week cycle.. (d) The ordinary times of all part-time employees shall not exceed eight (8) hours per day; Provided, that where there is mutual agreement between the Company and the individual employee, the ordinary time hours may exceed eight (8) hours but not exceed ten (10) hours per day, where an employee works a roster other than nineteen (19) days in a four week cycle.
...’
(emphasis added)
71 Clause 6.2.1 of the agreement provided under the heading ‘Rostering Arrangements’ that every full-time and part-time employee should be given a regular commencing and ceasing time for each day.
72 Clause 6.2.2 provided for the rostering of ordinary time hours of weekly employees as follows:
(i) Monday to Friday for all employees; or (ii) Monday to Saturday for all employees engaged after 1st January 1989 or by mutual agreement with existing employees at that time; or (iii) Monday to Sunday for all employees engaged after 23rd September 1993 or by mutual agreement with existing employees at that time.‘6.2.2(a) The ordinary time hours of all weekly employees may be rostered on up to five (5) days within the following constraints:-
...’
73 Clause 6.3 of the agreement was headed ‘Shift Provisions’.
74 Under the subheading ‘Shift Work’ clause 6.3.3 relevantly provided:
... (b) Weekly employees required to work ordinary hours on a Saturday, will be paid a loading of twenty-five per cent (25%) of the applicable ordinary time rate. ... (c) Non Rotating Afternoon Shift – All employees who by direction of the Company work ordinary working hours on Afternoon Shift (as defined) without rotation shall be paid in addition to the appropriate weekly rate prescribed in clause 5.2 (Wages), an amount per ordinary time hour equal to the following:-‘6.3.3 Shift Work
| From 1/11/04 | From 23/10/05 | From 23/10/06 |
| $2.84 | $2.95 | $3.07 |
| From 1/11/04 | From 23/10/05 | From 23/10/06 |
| $3.71 | $3.86 | $4.02 |
75 Clause 6.8 of the agreement relevantly provided under the heading ‘Sunday Work’:
...’‘6.8.1 (a) All weekly employees engaged after 10th May 1996, who work a roster which includes Sunday as ordinary hours of work, shall be paid for all work performed on Sunday at the rate of 175% of their ordinary rate (ie 75% in addition to the ordinary time rate).
76 Unlike clause 6.3.3(b), clauses 6.3.3(c) and 6.3.3(d), which are important clauses for the purposes of this case, do not provide for the payment of a ‘loading’ of a percentage of the ‘applicable ordinary time rate’. Rather, they provide for the payment of a fixed amount per ordinary time hour ‘in addition’ to the ‘appropriate weekly rate prescribed in clause 5.2’ and in the case of weekly employees who work a roster which includes Sunday ‘as ordinary hours of work’ clause 6.8.1(a) provided for all work performed on Sunday to be paid at a rate being 175% of their ordinary rate.
The heart of the case
77 This case requires a determination to be made as to what, in the case of
an employee who takes long service leave, is meant by
the expression ‘the
ordinary rate being paid to the employee immediately before the leave is
taken’ within the meaning
of s 46(1) of the IR Act in circumstances
where clause 7.6 of the agreement provided for the entitlement of an employee to
long service leave to be ‘as
described’ in the provisions of Chapter
2 Part 3 of the IR Act or as amended from time to time.
These special
rates, it may be observed, are rates applicable to ‘ordinary working
hours’ or in the case of Sunday ‘ordinary
hours of work’ where
a roster includes Sunday.
78 In my opinion:
(a) where employees are engaged by the appellant on non-rotating afternoon shifts or non-rotating night shifts the ordinary rates being paid to the relevant employees for the purposes of s 46(1) of the IR Act are the rates actually being paid to the employees which incorporate the additional amounts for which clause 6.3.3(c) and 6.3.3(d) provide.
(b) in respect of weekly employees who are rostered to work their ordinary time hours on Sundays, the ordinary rate being paid to such employees for the purposes of s 46(1) of the IR Act includes not only their ordinary time rate but also the additional amount calculated at 75 per cent of their ordinary time rate in accordance with clause 6.8.1(a) of the agreement.
The appellant’s case
79 The appellant’s grounds of appeal focus upon the primacy of s 46 over s 43 of the IR Act in terms of the determination of the rate at which an employer must pay an employee for long service leave that is taken.
I agree that the relevant rate is to be determined in accordance with s 46, but that does not mean that the use of the expression ‘on full pay’ in s 43, which is concerned with the entitlement of an employee to long service leave, is without significance.
80 The nub of the appellant’s grounds of appeal is to be found in ground 2(b) which provided:
‘The learned primary judge erred in the interpretation of s.46 of the [IR] Act, either in its own terms or as a term of the PSA [the agreement] incorporated by clause 7.6 thereof, by: ...(b) failing to apply the definition of the expression "ordinary rate" as contained in Schedule 5 to the Act.’
81 The respondent’s case is that the ‘ordinary rate being paid’ to an employee, who ordinarily works on non-rotating afternoon or night shifts or on Sundays, should be determined by aggregating the appropriate weekly rate prescribed in clause 5.2 of the agreement and the appropriate amount as set out in clause 6.3.3(c) or clause 6.3.3(d) or the ordinary time rate to which 75 per cent is added in accordance with clause 6.8.1(a) of the agreement for Sunday work.
82 The respondent supports its submissions as to the true meaning of s 46(1) of the IR Act by placing reliance upon the use of the expression ‘on full pay’ in s 43(2). ‘Full pay’ was defined in Schedule 5 to the IR Act to mean ‘payment in full for the time that an employee is absent from work’.
83 If the Court was of the opinion that ‘the ordinary rate being paid to the employee immediately before the leave is taken’ was limited to the rate the agreement ‘states is payable for ordinary time’ and that was considered to be a lesser rate than that for which the respondent contends, then the respondent submits that s 46(2) of the IR Act required the appellant to pay an employee taking long service leave pay calculated at the ‘higher rate than the ordinary rate’ that was actually being paid immediately before the leave was taken in accordance with s 46(2) of the IR Act.
84 In my opinion the appellant’s submission overlooks the importance of s 32A of the Interpretation Act, the clear legislative purpose evident in the words of s 46(1)-(3) of the IR Act, the relevant Minister’s Second Reading Speech and, more importantly, the Explanatory Notes referable to the Industrial Relations Bill 1999. The objective of the legislature, in my opinion, was to ensure that people were not disadvantaged when they went on long service leave so that they did not have to accept pay at a lower rate than that which was being paid to them immediately before the relevant long service leave was taken.
85 Section 32A of the Interpretation Act provided:
‘Definitions in or applicable to an Act apply except so far as the context or subject matter otherwise indicates or requires.’
86 Section 14B of the Interpretation Act permitted consideration to be given to, amongst other things, the Explanatory Notes and the Minister’s Second Reading Speech.
87 In addition s 14A of the Interpretation Act provided for an interpretation that would best achieve the purpose of the IR Act to be preferred to any other interpretation.
88 When the IR Act was passed in 1999 s 46 contained only 6 subsections. Subsections (1) – (5) have remained unchanged since the section was first enacted, as has the definition of ‘usual rate’ although that definition is now contained in subsection (12) whereas it was formerly to be found in subsection (6).
89 The Explanatory Notes for the Industrial Relations Bill 1999 which became the IR Act and contained those subsections, included under the heading ‘Payment for long service leave’:
‘Clause 46 provides for long service leave at the rate at which the employee was being paid immediately before taking long service leave. The clause defines "usual rate" for this part.’Notably, the Explanatory Notes conflated ‘the ordinary rate being paid’ and ‘a higher rate’ being paid into ‘the rate at which the employee was being paid’.
90 In his Second Reading Speech on the Industrial Relations Bill the Honourable P J Braddy, the Minister for Employment, Training and Industrial Relations, said:
‘The Bill ... prescribes at Chapter 1 general employment conditions which have been extended to cover all Queensland workers responding to ... growth in non-standard employment. Specifically, the Bill includes –
...• A set of minimum employment entitlements to ... long service leave for all employees, including those not covered by awards and agreements
...’• 13 weeks’ long service leave after 15 years’ service, with employees able to access further leave on a pro rata basis after another five years’ service;
91 The Minister’s speech is of little assistance in the present case beyond its reference to substantial changes in working arrangements that had occurred ‘over the last 10 to 15 years’ which were reflected in, amongst other things ‘higher levels of casualisation and the growth in other forms of non-standard work’ (see Hansard, 25 May 1999, at page 1829).
92 It seems clear to me that the legislature intended that the rate at which an employee was in fact being paid was to continue and was not to be diminished upon the employee taking his or her long service leave.
93 The important words in s 46(1) of the IR Act were ‘at the ...
rate being paid to the employee immediately before the leave is
taken’ rather than ‘at the ordinary rate being paid’.
When taken with s 46(2), it is apparent that the focus was upon the actual
rate being paid immediately before long service leave was taken. It was this
rate which the legislature sought to preserve for the benefit of the relevant
employee when on long service leave.
The context indicates and requires that
the statutory definition of ‘ordinary rate’ in Schedule 5 of the IR
Act should not apply to the determination of the meaning of the expression
‘the ordinary rate being paid to the employee immediately
before the leave
is taken’ in s 46(1). Section 46(1) does not require the amount
payable to an employee taking long service leave to be reduced when on such
leave.
94 In my opinion the appeal should be dismissed.
|
I certify that the preceding forty-six (46) numbered paragraphs are a true
copy of the Reasons for Judgment herein of the Honourable
Justice Graham.
|
Associate:
Dated: 22 March 2010
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