[2009] AIRCFB 146 |
|
DECISION |
Workplace Relations Act 1996
s.120—Appeal to Full Bench
s.709—Application to Commission to have a dispute resolution process conducted (Div 5)
Victoria Police Force(DR2008/1531)
JUSTICE GIUDICE, PRESIDENT |
MELBOURNE, 11 FEBRUARY 2009 |
Appeal—interpretation of agreement—dispute resolution provision—whether right of appeal under dispute resolution provision – whether error in interpretation—Workplace Relations Act 1996 ss.120(1)(f).
[1] A dispute has arisen between the Police Federation of Australia (the Federation) and Victoria Police Force (Victoria Police) concerning the interpretation of cl.6.9.1(c) of the Victoria Police Force Workplace Agreement 2007 (the Agreement). Clause 6.9.1(c) provides for an excessive hours payment. For the purposes of this appeal it is only necessary to refer to that part of the dispute between the parties which concerns the way in which the excessive hours payment is to be calculated.
[2] On 25 January 2008 the Federation made an application to have a dispute resolution process conducted under Division 5 of Part 13 of the Workplace Relations Act 1996 (the Act) in relation to the dispute. The application was made pursuant to cl.19 – Dispute Resolution of the Agreement.
[3] Attempts to resolve the matter by conciliation were unsuccessful and in due course Deputy President Hamilton made a determination. The determination is set out in a decision given on 29 July 2008. 1 In that decision His Honour adopted the interpretation of cl.6.9.1(c) contended for by the Federation. Victoria Police has appealed.
[4] Before dealing with the substance of the interpretation issue it is necessary to address the nature of these proceedings and in particular the two alternative bases upon which the appeal is brought.
[5] It is to be assumed, although it is not expressly stated in the decision, that the Deputy President was exercising powers pursuant to cl.19 of the Agreement. That clause is entitled Dispute Resolution. It provides for the resolution of disputes about matters arising under the Agreement. The powers to be exercised by the Commission under the clause are set out in cl.19.5. That clause reads:
“Arbitration
19.5.1 If the dispute or grievance has not been settled when conciliation has been completed, the Employee or their representative may request that the AIRC proceed to determine the dispute or grievance by arbitration.
19.5.2 Where a member of the AIRC has exercised conciliation powers in relation to the dispute or grievance, the member shall not exercise, or take part in the exercise of, arbitration powers in relation to the dispute or grievance if a party objects to the member doing so.
19.5.3 Subject to clause 19.5.5 below, the determination/decision including any interim determination of AIRC is binding upon the parties to it.
19.5.4 Subject to clause 19.5.5 below, any determination/decision will be implemented.
19.5.5 An appeal lies to a Full Bench of the AIRC, with the leave of the Full Bench, against a determination/decision of a single member of the AIRC made pursuant to this clause.”
[6] By this clause the parties have agreed to confer power on the Commission to determine disputes by arbitration. The Commission’s determination binds the parties subject to the exercise of any appeal rights under cl.19.5.5.
[7] In this case Victoria Police seeks to challenge Deputy President Hamilton’s decision of 29 July 2008 on two alternative bases. First, Victoria Police relies upon the terms of cl.19.5.5, set out above. This is to be seen in the context of s.709 of the Act which permits an application to be made to have a dispute resolution process conducted under the terms of a workplace agreement. It is not necessary to set s.709 out. Section 711 is more important, however, and should be set out in full.
(1) In conducting the dispute resolution process under this Division, the Commission has, subject to subsection (2), the functions and powers:
(a) given to it under the workplace agreement; or
(b) otherwise agreed by the parties.
(2) The Commission does not have the power to make orders.
(3) The Commission must, as far as is practicable, act:
(a) quickly; and
(b) in a way that avoids unnecessary technicalities and legal forms; and
(c) if the parties have agreed, either in the workplace agreement or otherwise, that an aspect of the process is to be conducted in a particular way—in accordance with that agreement.
(4) Subdivision B of Division 4 of Part 3 of this Act does not apply in relation to the conduct of the dispute resolution process by the Commission under this Division.”
[8] It can be seen from s.711(1)(a) that in conducting a dispute resolution process the Commission has the powers given to it under the workplace agreement. In this case Victoria Police contends that cl.19.5.5 confers on the Commission the power to hear an appeal from any “determination/decision” under the clause. The Federation contends to the contrary. It submitted that cl.19.5.5 does no more than confirm whatever right of appeal might exist under s.120 of the Act. This brings us to the second basis upon which Victoria Police contends it may appeal. That basis involves reliance upon the terms of s.120 of the Act.
[9] Section 120(1) of the Act provides for an appeal by leave to a Full Bench of the Commission in a variety of circumstances. Section 120(1)(f) provides for an appeal against a refusal or failure to exercise jurisdiction. That section reads:
“120 Appeals to Full Bench relating to matters arising other than under the Registration and Accountability of Organisations Schedule
(1) Subject to this Act, an appeal lies to a Full Bench, with the leave of the Full Bench, against:
… …
(f) a decision of a member of the Commission that the member has jurisdiction, or a refusal or failure of a member of the Commission to exercise jurisdiction, in a matter arising under this Act.”
[10] Victoria Police contends that the Deputy President failed to exercise the Commission’s jurisdiction and therefore an appeal lies under s.120(1)(f). The Federation contends that if any error was made by the Deputy President in determining the dispute it was not an error of a jurisdictional nature. It is convenient to deal with the argument based on s.120(1)(f) first.
[11] In our view the terms of s.120(1)(f) indicate an intention on the part of the legislature that an appeal should be available from any decision which involves jurisdictional error. In Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission 2 (Coal and Allied) it was decided that the appellate powers of the Commission under s.45 of the Act are exercisable only if there is error on the part of the primary decision maker.3 Section 120(1) is concerned with jurisdictional error. Victoria Police sought to characterise the concept of jurisdictional error in wide terms, relying upon passages in Craig v South Australia.4 The application of the concept of jurisdictional error in relation to a discretionary decision of this Commission was dealt with by a majority of the High Court in Coal and Allied. We adopt with respect, the formulation of the relevant test adopted by the Court:
“31 There would only have been jurisdictional error on the part of the Full Bench if it had misconceived its role or if, in terms used by Jordan CJ in Ex parte Hebburn Ltd; Re Kearsley Shire Council, it “misunder[stood] the nature of [its] jurisdiction ... or ‘misconceive[d] its duty’ or ‘[failed] to apply itself to the question which [s 45 of the Act] prescribes’ ... or ‘[misunderstood] the nature of the opinion which it [was] to form’”. The Full Bench did none of those things.” 5 (footnotes omitted)
[12] The source of the Commission’s power in this case was the dispute resolution procedure in cl.15.5 of the Agreement. Applying the approach in the passage from Coal and Allied, the Deputy President would have fallen into jurisdictional error if he had misconceived his role under the dispute resolution procedure. It would be necessary to consider whether the Deputy President did so in order to reach a conclusion about the availability of a successful appeal under s.120(1)(f). As will become apparent from what follows, we have not found it necessary to decide that question.
[13] We deal now with Victoria Police’s contention that an appeal can be brought pursuant to cl.19.5.5 of the Agreement and s.711(1)(a) of the Act. In our view the terms of cl.19.5.5 clearly indicate that the parties intended to confer a right of appeal, subject to leave being granted, to a Full Bench in the circumstances of this case. The submission that cl.19.5.5 is intended to reflect the rights conferred by s.120 of the Act is untenable. Section 120(1)(a) permits an appeal against an order. Section 711(2) provides that in conducting a dispute resolution process under the terms of a workplace agreement the Commission cannot make orders. Section 120(1) does not provide for an appeal against a decision or determination (which is not an order) unless there is jurisdictional error in which case s.120(1)(f) is available. Any decision or determination which does not involve jurisdictional error cannot be appealed under s.120. By including in cl.19.5 an appeal against a “decision/determination” the parties have indicated an intention to provide for an appeal in circumstances where s.120 would not be available, assuming the decision or determination was not affected by jurisdictional error of the kind potentially within s.120(1)(f). Clause 19.5.5 therefore provides a foundation for the appeal. Because that foundation is not confined to jurisdictional error, as s.120(1)(f) is, we shall deal with the appeal under cl.19.5.5.
[14] The entitlement to an excessive hours allowance is in cl.6.9.1(c) of the Agreement. Clause 6.9.1(c)(iv) provides that the allowance will be equivalent to a loading of 50% on the employee’s base hourly rate of pay for each excessive hour worked. The issue between the parties is whether the allowance to be paid for each excessive hour is 50% of the base hourly rate or 150%. Deputy President Hamilton determined that the allowance is 150% of the base hourly rate.
[15] To properly understand the way in which the allowance is intended to operate the terms of sub-clause (c) must be considered in the context of cl.6.9.1 as a whole. Clause 6.9.1 reads:
“6.9 Allowances in lieu of Overtime
6.9.1 Commuted Overtime Allowance
(a) An Employee not above the rank of Senior Sergeant employed as a Detective or performing similar duties or determined by the Employer as having a similar patter of work as Detectives, must be paid a commuted overtime allowance in lieu of any payment for overtime worked, or any recall to work, in accordance with Schedule B1.
(b) Any direction/requirement for an Employee, in receipt of a commuted overtime allowance as prescribed in clause (a), to work overtime should have regard to the provisions of clause 6.3.
(c) Excessive Hours Penalty:
(i) This clause does not apply to Employees in receipt of a one person station allowance or an Officer.
(ii) Commuted overtime is intended to cover instances of overtime worked in the normal flow of work for Detectives or Employees with similar patterns of work. The Employer and Employees will wherever possible ensure that appropriate work practices are in place to reduce the possibility of Employees working excessive hours. Where excessive hours are worked the Employer will ensure that Employees are provided with appropriate rest breaks without detriment.
(iii) The parties agree that where an Employee in receipt of a commuted overtime allowance is required and approved in advance to work excessive hours they will be paid an excessive hours allowance for excessive hours worked until they have received an 8 hour break. This may include court and crime scenes.
(iv) The excessive hours allowance will be equivalent to a loading of 50% on the Employee’s Base Hourly Rate of Pay for each excessive hour worked.”
[16] For the purposes of this case it is only necessary to deal with the position of detectives or employees performing similar duties as provided by cl.6.9.1(a) and cl.6.9.1(c)(ii). In considering the operation of cl.6.9.1 it is important to appreciate that detectives are not paid for each hour worked but are remunerated on an annual salary basis. Remuneration is comprised of an annual salary (cl.12.1 and Schedule A to the Agreement), including a commuted penalty allowance (cl.12.2) and the commuted overtime allowance (in cl.6.9.1(a) and Schedule B1).
[17] The commuted penalty allowance, in the case of employees not above the rank of senior sergeant, is for performance of work on weekends, public holidays and shift work. A separate shift work payment is also provided for in some circumstances. The commuted penalty allowance is included in the Schedule A rates.
[18] The commuted overtime allowance is paid in lieu of payment for overtime worked. By arrangement the commuted overtime allowance, although expressed as a lump sum in Schedule B1, is paid in equal instalments as part of each salary payment. We note that the excessive hours penalty is part of the clause dealing with the commuted overtime allowance. We shall return to that matter.
[19] These three categories of payment, salary, penalty allowance and overtime allowance, taken together, make up the salary which is paid to detectives each fortnight.
[20] The Agreement also provides for a number of other allowances which are paid as the entitlement arises. The excessive hours penalty is one of those allowances. There are four others to which we were referred. Those allowances are for recall to duty (cl.7.4), excessive night work (cl.5.3), restrictive hours (cl.9.3) and supplementary duties (cl.10.4).
[21] We note first that the allowance for recall to duty in cl.7 – Recall to Work provides for 3 levels of allowance depending upon the circumstances. Those levels are described as overtime/recall rate 1, overtime/recall rate 2 and overtime/recall rate 3. Those terms are defined in cl.1 of the Agreement as follows:
““Overtime/Recall Rate 1” For each hour, or part thereof, of time worked, an Employee must be paid at one and a half times the Employee’s Base Hourly Rate of Pay.
“Overtime/Recall Rate 2” For each hour, or part thereof, of time worked, an Employee must be paid at twice the Employee’s Base Hourly Rate of Pay.
“Overtime/Recall Rate 3” For each hour, or part thereof, of time worked, an Employee must be paid at two and a half times the Employee’s Base Hourly Rate of Pay.”
[22] Clause 7.4 provides that one or other of the recall rates applies depending on the circumstances. It is only necessary to set out part of cl.7. Clause 7.4.3(b) deals with recall to work from recreation leave, long service leave or on a public holiday. It provides:
“7.4.3 Recall to Work from Recreation Leave/Long Service Leave
(a) … …
(b) In addition to the ordinary hours paid as part of their leave or Public Holiday, an Employee will be paid for the Actual Hours of Work for the Period of Recall or a minimum of four hours, whichever is the greater:
(i) Monday to Friday
50% of their Base Hourly Rate of Pay for the first eight hours and Overtime/Recall Rate 2 thereafter.
(ii) Weekends
100% of their Base Hourly Rate of Pay for the first eight hours and Overtime/Recall Rate 2 thereafter.
(iii) Public Holidays
100% of their Base Hourly Rate of Pay.”
[23] We refer next to the excessive night work allowance in cl.5.3—Shift Work. It is not necessary to set the provision out. The clause adopts the same three level approach as cl.7.4 and the same definitions apply.
[24] Clause 9.3 provides for additional payment for restrictive hours. It is only necessary to set out part of the provision.
“9.3.1 For the first rostered shift period of Restrictive Work – at the Employee’s Base Hourly Rate of Pay;
9.3.2 Next three hours at one and a half times the Employee’s Base Hourly Rate of Pay;
… …”
[25] Finally we refer to the provisions of cl.10.4 – Payment for Supplementary Duties. For present purposes cl.10.4.2 is the relevant provision. It reads:
“10.4.2 An Employee may, in exceptional circumstances, be requested to perform Supplementary Duties in excess of the number of hours the Employee is rostered for Supplementary Duties. If the Employee agrees to perform those additional hours, the loading specified in sub-clause 10.4.1 will increase for the additional hours:
(a) Monday to Friday
50% of the Employee’s Base Hourly Rate of Pay for the first three hours and 100% of the Employee’s Base Hourly Rate of Pay thereafter.
(b) Weekends and Public Holidays
100% of the Employee’s Base Hourly Rate of Pay.”
[26] It is evident that each of these provisions – cll.7.4, 5.3, 9.3 and 10.4.2 – describes the way in which the payments in question are to be calculated in slightly different ways. Each party directed attention to some of these differences to support its interpretation of cl.6.9.1(c)(iv). We deal next with the Deputy President’s reasons for decision.
[27] The Deputy President’s reasons for decision were thorough and canvassed all of the arguments put to him. The reasons involved a number of considerations and conclusions. For present purposes it is sufficient to refer only to some of those considerations and conclusions.
[28] His Honour noted the importance of the wages/work bargain in the employment relationship and expressed the view that, in the absence of an indication to the contrary, wages must be paid for hours worked and any allowance is an additional payment. He noted that the term “allowance” in cl.6.9.1(c) is indicative of an amount in addition to ordinary wages, equally the terms “loading” and “penalty” have the same connotation. His Honour expressed the view that it would be unusual for an allowance, loading or penalty to be less than ordinary wages. By implication he disagreed with the proposition that during excessive hours the wages clause is replaced with a combination of two allowances – commuted overtime and excessive hours. His Honour analysed the language in various other provisions, which we have referred to above, and concluded that, properly interpreted, the excessive hours penalty is 150% of the base hourly rate per excessive hour.
[29] As is apparent from the terms of the Agreement we have outlined above, the payment system for detectives is based on an annual salary plus two allowances which are aggregated and paid fortnightly. It is clear that payment for overtime and work on weekends and public holidays is comprehended in that amount. In the ordinary course there is no additional payment for overtime or for work on weekends or public holidays because payment for such work is part of the rate. A consequence of this system is that the commuted allowances are paid regardless of the amount of overtime or weekend or public holiday work that a particular detective performs, or even if no overtime is worked at all.
[30] Clause 6.9.1(a) provides that the relevant employees will be paid a commuted overtime allowance “in lieu of any payment for overtime worked.” It is apparent from the structure of cl.6.9.1 that the excessive hours penalty is an element of the operation of the commuted overtime allowance. Clause 6.9.1(c)(ii) operates on the basis that the employer and employees will cooperate to ensure that overtime is not excessive. Clause 6.9.1(c)(iii) provides that where an employee in receipt of the commuted overtime allowance works excessive hours, an allowance will be paid until they have had an eight hour break from duty. Thus the excessive hours allowance can be seen as identifying a particular type of overtime which attracts an additional allowance when it is worked. Clause 6.9.1(c)(iii) provides that the allowance is “equivalent to a loading of 50% on the Employee’s Base Hourly Rate of Pay for each excessive hours worked.” The Agreement defines the Base Hourly Rate of Pay in cl.1.6. It provides for the calculation of an hourly rate of pay from the annual salary inclusive of the commuted overtime allowance but not the commuted penalty allowance.
[31] The Deputy President does not appear to have recognised these arrangements in his analysis. For example, His Honour’s reference to the wages/work bargain does not take into account the way in which the commuted overtime allowance applies. A penalty payment of only 50%, rather than 150%, for excessive hours is entirely consistent with the wages/work bargain if it be accepted that the commuted overtime allowance is intended to cover all overtime worked. In the same way, it is difficult to see the relevance of His Honour’s conclusion that every hour worked must be paid for before the addition of any relevant allowance. By necessary implication, if the commuted overtime allowance is intended to compensate for all overtime worked, then the overtime allowance is part compensation for excessive hours and an additional penalty of only 50% is not unreasonable.
[32] For this reason the Deputy President’s decision is affected by error. His decision cannot stand. We intend to decide the question ourselves. We turn now to the terms of the relevant provisions, commencing with cl.6.9.
[33] There are a number of indications in cl.6.9.1 that the allowance should be 50% rather than 150% of the hourly rate. The first is that the commuted overtime allowance is to be paid in lieu of any payment for overtime worked. As we have indicated, excessive hours are a type of overtime. Clause 6 of the Agreement defines overtime and prescribes overtime rates and conditions. The effect of cl.6.9.1 is to require, for detectives and others, that the commuted overtime allowance is to be paid regularly and that overtime is not to be paid for as and when it is worked. Overtime hours which are excessive, even though they attract an additional allowance, are already compensated for by the commuted overtime allowance. If this be correct, payment of an allowance of an additional 50% would not be unreasonable. This interpretation is supported by the fact that the base hourly rate of pay, on which the excessive hours allowance is calculated, is defined (in cl.1.6) so as to include the commuted overtime allowance. This tends to confirm the impression that excessive hours are simply another type of overtime and are intended to be compensated for, at least in part, by the commuted overtime allowance.
[34] The language of cll.6.9.1(c)(iii) and (iv) also provides some clues. In particular, the use of the word “allowance” suggests that it is an additional amount which is being prescribed rather than a payment for time worked. Seen in the context of the payment of a commuted overtime allowance in lieu of overtime payments, a payment of 150% for excessive hours might be seen to be double-counting. At a more basic level, if it had been intended that the allowance should be 150% it would have been a simple matter to remove all doubt by including that figure somewhere in the clause.
[35] Victoria Police sought to rely on the terms of cll.7.4 and 5.3, in particular the definition of overtime/recall rate 1. It submitted that if it had been intended that excessive hours should be remunerated at the rate of 150%, it would have been simple to include a reference to overtime/recall rate 1 in paragraph (iv). While there is some force in this point it ignores the fact that detectives are not paid overtime and the overtime/recall rate might be inappropriate to apply to them.
[36] The Federation, on the other hand, referred to the expression “of their Base Hourly Rate of Pay” appearing a number of times in cll.7.4.3(b) and 10.4.2. It pointed out that cl.6.9.1(c)(iv) uses the expression “on (not of) the Employee’s Base Hourly Rate of Pay” and submitted that the word ‘on’ carries the implication that the allowance is intended to be 50% plus the base hourly rate of pay i.e. 150%. While there is a technical validity to the point, the use of “on” is at most ambiguous. It might equally mean “on” in the sense of “calculated on.”
[37] The Federation also relied on some policy considerations. It suggested that the excessive hours allowance would not operate fairly or as a deterrent to excessive hours being worked if it was only 50% because it would still be cheaper to employ existing detectives working excessive hours than to engage new detectives. We have some doubt about the validity of this argument. Leaving aside situations in which excessive hour are worked, the commuted overtime allowance, which is paid regardless of the amount of overtime worked, does not provide any incentive to reduce overtime and to employ more detectives. The excessive hours penalty, even at 50%, would at least provide some incentive to reduce overtime. Moreover, to properly evaluate the argument more information would be required about the reasons for working excessive hours. In this respect we note the parties’ intention, stated in cl.6.9.1(c)(ii), to take steps to reduce the incidence of excessive hours being worked.
[38] We return to the terms and the structure of cl.6.9.1. In our view sub-clause (c) must be read in the context of the sub-clauses which precede it, particularly sub-clause (a). Sub-clause (a) provides for the payment of a commuted overtime allowance instead of the normal overtime payments for the employees concerned. Sub-clause (c) then deals with overtime which is excessive and provides for an allowance per excessive hour worked. Seen in that context, an excessive hours allowance of 150% of the hourly rate would in effect constitute an overtime payment. An overtime payment would be inconsistent with the payment of an overtime allowance. We doubt very much whether the parties intended such a result.
[39] We have decided that the proper interpretation of the provision is that the excessive hours allowance should be at the rate of 50%, and not 150%, of the relevant base hourly rate of pay.
[40] This decision replaces the decision made by Deputy President Hamilton on 29 July 2008.
BY THE COMMISSION:
PRESIDENT
Appearances:
J Bourke of counsel for the Victoria Police Force.
C Dowling of counsel for the Police Federation of Australia.
Hearing details:
2008.
Melbourne.
November , 18.
2 203 CLR 194.
3 ibid., at para 18.
4 (1995) 184 CLR 163 at 179.
5 203 CLR 194.
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