DECISION

Fair Work Act 2009
s.739—Dispute resolution

Australian Municipal, Administrative, Clerical and Services Union
v
Hobson’s Bay City Council
(C2013/5148)

Dispute arising under dispute resolution procedure; accrual of sick leave in relation to nine-day fortnight arrangements.

Background

[1] This matter concerns the accrual of sick leave for certain workers in the Hobsons Bay City Council who work a nine-day fortnight arrangement in accordance with the Hobsons Bay City Council Enterprise Agreement 2010 1 (the Agreement).

[2] The dispute arises pursuant to the provisions of the Agreement in Part A, Clause 22 (Prevention and Settlement of Disputes), which permits the Fair Work Commission to deal with a matter, including through conciliation and arbitration, in the event that conciliation is unable to achieve a consensus between the parties 2. The Commission may deal with the dispute in accordance with the clause and the provisions of the Fair Work Act’s (the Act) Part 6-2, Div. 2. In dealing with a dispute, the Commission may arbitrate if that course is authorised by the clause (which it is), however a decision may not be made which is inconsistent with the Act or the Agreement3.

[3] The dispute affects about 90 employees engaged as outdoor depot based employees (out of a total staffing level for the Council of 810 employees) 4.

[4] The subject of the dispute is the accrual of sick and personal leave and consequential payment rights of employees working under the Agreement when they take such leave.

[5] The dispute arises in respect of outdoor depot based employees and not others, since their rostering arrangements are different to those of the wider workforce. The dispute arises because the Agreement creates an entitlement to full-time employees of up to 12 days personal leave each year. The context of the Agreement, which includes a nine-day fortnight rostered day off arrangement applying to outdoor depot based employees, gives rise to a question about the accrual of the sick and carer’s leave credit, together with the amounts which should then be deducted from the credit when sick or carer’s leave is taken, or within the context of an entitlement to 12 days sick or carer’s leave a year.

[6] The Australian Municipal, Administrative, Clerical and Services Union (the ASU), the Applicant in this matter, and Hobsons Bay City Council (HBCC) have different approaches to the payment and accrual of sick and carer’s leave.

[7] For the purposes of determining the dispute, it is appropriate to characterise the question that needs to be determined in the following way:

• Whether the correct interpretation of the Agreement is that it provides for the accrual and taking of 12 actual days of sick and carer’s leave based on the hours that would be actually worked in ordinary time on 12 ordinary days of work, equivalent to 101.28 hours per year in the case of outdoor depot based employees working a nine-day fortnight; OR



• Whether the correct interpretation of the Agreement is that it provides for a sick and carer’s leave entitlement accrual of 12 ordinary days per year, notionally of 7.6 hours each, equivalent to an accrued entitlement of 91.2 hours per year in the case of outdoor depot based employees working a nine-day fortnight.

[8] The issue in dispute is set out in the ASU’s Outline of Submissions as follows:

“12. HBCC’s outdoor depot based employees work an average of 38 hours per week in accordance with Part B Clause 33.1 of the Agreement.

13. HBCC’s outdoor depot based employees work a nine day fortnight in accordance with Part A Clause 17.4 of the Agreement.

14. To enable the taking of a rostered day off each fortnight, outdoor depot based employees work 8.44 hours on the 9 days of each fortnight that they are required to attend work.

15. HBCC calculates the accrual of sick leave for outdoor depot based employees based on an average working day of 7.6 hours.

16. HBCC calculates the deduction of sick leave for outdoor depot based employees based on the actual working day of 8.44 hours.

17. HBCC’s method of accrual and deduction of sick leave means that an outdoor depot based employee can be absent from work on paid sick leave for 10.8 days each year.” 5

Relevant provisions of the Agreement

[9] The Agreement is lengthy with several parts, which comes about because of the incorporation into the Agreement of the provisions of a legacy award applying to the workforce, the Victorian Local Authorities Award 2001 (the Award). The Agreement requires it be “read and interpreted wholly in conjunction with” the incorporated material 6. Part A of the Agreement contains specifically negotiated matters and Part B contains the incorporated Award provisions.

[10] There are several clauses of the Agreement that are relevant to the dispute:

HOURS OF WORK

• Part A, Clause 17.2 provides for employees’ spread of hours and Clause 17.4 provides for a nine-day fortnight arrangement for outdoor depot based employees;

“17.2 Spread of Hours

For employees on standard engagement, the ordinary spread of hours of work for Outdoor, Depot based staff will be between 6.00am and 6.00pm, on any roster on Monday to Friday (inclusive). The spread of hours may also be varied or extended by agreement.

The ordinary spread of hours of work for all other staff on standard engagement will be between 7.00am and 7.00pm, on any roster on Monday to Friday (inclusive). The spread of hours may also be varied or extended by agreement.

Provided that where the applicable Part of this Agreement or other agreed arrangement designates the hours of work outside the hours of 7.00am and 7.00pm, the provisions of the applicable Part of this Agreement or the other agreement will apply.”

“17.4 Rostered Days Off

This condition applies to full time staff only.

Outdoor, depot-based staff will work a 9 day fortnight. This entitlement applies to existing and new outdoor, depot-based staff.

All other staff (except Senior Officers and Senior Executive Officers unless otherwise negotiated) will work a 19 day four week cycle except those who currently work a 9 day fortnight will retain a 9 day fortnight.”

[remainder of sub-clause omitted as unnecessary for the purposes of this decision]

• Part B Clause 33 provides for hours of work in greater detail as follows;

“33.1 Standard engagement

Save for casual and part-time employees and the later provisions of this clause, the ordinary hours of duty will be 38 per week to be worked between 6.00 �a.m. and 6.00 p.m. on Monday to Friday (both inclusive) with a break of not less than 45 minutes or more than one hour for lunch between noon and 2.00 p.m. Provided that by Agreement between the employer and employee(s) the minimum lunch break may be reduced to 30 minutes.”

• The remainder of Part B Clause 33.1 specifies the range of hours and meal breaks. Amongst other things, the remainder of the clause provides for the starting and finishing times of “ordinary work on any day”. The remaining parts of the clause are not relevant to this decision and so are not reproduced.



• Part B, Clause 33.2 deals with work within a Water Board, Waterworks Trust or Sewerage Authority and is not relevant to this matter.



• Part B, Clause 33.3 specifies the arrangements for “ordinary hours of duty” as follows:

“33.3 Notwithstanding the provisions of 33.1, upon the consent of the respondent and then by written agreement between the respondent and the employee and/or employees concerned following consultation the ordinary hours of duty of any employee or any employees other than those specified elsewhere may be worked at any time on any days, Monday to Friday inclusive.”

• The remainder of Part B, Clause 33.3 and the remaining parts of Part B, Clause 33 do not have relevance to this decision.

SICK LEAVE ENTITLEMENTS AND ACCRUAL

• Part A, Clause 17.8 states that sick leave entitlements are in accordance with Part B.



• Part B, Clause 37.1 establishes a carer’s leave entitlement, which also refers to a grant of sick leave, and the basis upon which that grant is established:

“37. CARER'S LEAVE

NB This clause applies to all employees covered by this award.

37.1 Amount of paid carer's leave

37.1.1 An employee, other than a casual employee, who is absent from duty on account of personal illness or accident other than for which workers' compensation is payable, will be granted sick leave with pay on the following basis.

37.1.1(a) Employees bands 1 to 5 (physical community services)

one days leave for each month of employment in the first year of employment and three days bereavement/compassionate leave for each occasion.

twelve days leave in the second and subsequent years of employment and three days bereavement/compassionate leave for each occasion.”

[remainder of clause omitted as unnecessary for the purposes of this decision]

• Part B, Clause 39.2 (and sub-clause 39.2.3 in particular) provides for a sick leave entitlement as follows for the outdoor depot based employees and others 7;

“39.2 Employees bands 1 to 5 (physical/community services)

39.2.1 An employee, other than a casual employee or a part-time employee who is in receipt of an allowance in lieu, or an employee engaged under 15.5.1 (a) will be entitled to and will receive" sick leave in cases where he/she is unable to perform his/her work by reason of illness or on account of injury by accident for which he/she is not entitled to workers' compensation.

39.2.2 An employee other than a casual employee, or an employee engaged under 15.5.1 (a), who is absent from work on account of personal illness or on account of injury by accident for which he/she is not entitled to workers' compensation will, on production (within 48 hours of the commencement of such absence) of evidence of his/her illness or injury satisfactory to the employer, be entitled to and will receive leave of absence of one ordinary day .for each completed calendar month of service, without loss of pay.

Provided that the employee will notify the employer of such absence within the first part of what would have been his/her normal working day, where practical.

Provided further that for any absence, either the working day before or the working day after a rostered day off, or public holiday, an employee will be required upon request to provide a certificate of a duly qualified medical practitioner.

30.2.3 Notwithstanding the provisions of 39.2.2 hereof an employee with twelve months service or more will be entitled to have twelve ordinary days leave (pro rata for Part-time) credited to the employee in respect of the ensuing year, without loss of pay.

39.2.4 Sick leave not taken will accumulate without limit so that any balance of the period specified in 39.2.1 and 39.2.2 of this clause which has in anyone year not been allowed to an employee by an employer as paid sick leave may be claimed by the employee and, subject to the conditions hereinbefore prescribed, will be allowed by that employer in any subsequent year without reduction of the sick leave prescribed in respect of that year.

39.2.5 When an employee has his/her employment terminated, other than for misconduct, or absence from work without reasonable excuse, and he/she is subsequently reemployed within a period of twelve months, the number of days of sick leave not taken with which he/she was credited prior to such termination of employment will, after his/her re-employment has continued for one month, again be placed to his/her credit.

39.2.6 Twenty days accumulated sick leave with respondents to this award will be transferable between respondents subject to the following conditions:

39.2.6(a) An employee's service between respondents is continuous (breaks of two months or less will be deemed not to break continuity).

39.2.6(b) The employee at the time of engagement produces a certificate duly certified by the previous employing respondent, certifying the amount of sick leave accumulated to his/her credit, and the date upon which the last entitlement was credited to the employee.

39.2.6(c) Where an employee's accumulated sick leave is less than twenty days, then the amount of sick leave transferable will be that standing to his/her credit.

Provided that an employee will not be entitled to have more than twelve days credited to him/her in respect to any twelve month period.”

[11] At the heart of the dispute is the correct interpretation of Part B Clause 39.2.3 and what is meant by the entitlement of an employee to each year have credited “twelve ordinary days leave”.

[12] To the extent it is necessary to consider the question, this is not a provision which contravenes s.55 of the Act, since the Agreement’s provisions are more generous in relation to the entitlement to leave and its accrual and the Agreement’s other arrangements in relation to sick or carer’s leave can be construed as terms that have the same or substantially the same effect as the National Employment Standards 8. It follows that s.56 has no application, which provides that a term of an enterprise agreement has no effect to the extent that it contravenes s.55.

Submissions

[13] The submissions put by the ASU include that there is a distinction between “ordinary hours” and “average hours”:

“29. Part A Clause 17.3 of the Agreement relevantly provides that:

“The intent of the parties is that an average of 7.6 hours per day will be worked by full time employees on standard engagement. However, by mutual agreement, up to ten hours per day may be worked as ordinary hours with management approval within the spread of hours.”

a. Part A Clause 17.3 therefore draws a distinction between the meaning of “average hours per day” and “ordinary hours”.

b. The ASU submits that HBCC’s administration of sick leave assumes that the Agreement provides for twelve “average days” of sick leave annually, rather than the twelve ordinary days that is actually provided by Part B 39.2.3.

c. Part A Clause 17.3 is therefore consistent with understanding Part B Clause 39.2.3 to provide twelve days of sick leave based on twelve actual ordinary days of work.

30. Part A Clause 17.4 of the Agreement relevantly provides that:

“Outdoor, depot-based staff will work a 9 day fortnight.”

a. To give effect to Part A Clause 17.4 it is required that outdoor depot based employees work 8.44 hours on the 9 days of each fortnight on which they are required to work.

b. The ASU submits that implicit to Part A Clause 17.4 is an agreement between the outdoor depot employees and HBCC that those employees will work an “ordinary day” that differs from the average hours per day. That agreement satisfies the requirement of Part A Clause 17.3 for up to ten hours per day to be worked as ordinary hours.

c. Part A Clause 17.4 is therefore consistent with understanding Part B Clause 39.2.3 to provide twelve days of sick leave based on twelve actual ordinary days of work.

Conclusion

31. The ASU submits that the clear and unambiguous meaning of the sick leave provisions in the Agreement is to provide for 12 actual days of sick leave to outdoor depot based employees. A day is a day, and although it may be necessary to express leave accruals and deductions in terms of hours for the sake of administrative convenience, the method of accruals and deductions must not result in a reduction in employee entitlements.” 9

[14] By extension, the ASU argues a worker is entitled to have 12 days off per year for each and every hour they would otherwise have worked on those days.

[15] In the scheme of the actual working patterns of outdoor depot based employees, which are eight days per fortnight of 8.5 hours, together with one day per fortnight of eight hours, this means an employee might potentially have off from work for the purposes of sick or carer’s leave 101.28 hours on 12 separate days.

[16] In contrast, the Hobsons Bay City Council submits:

“15. As outlined at paragraph 10 above, full-time outdoor depot-based staff are entitled to one RDO per fortnight. On average they work 8.44 hours each day and accordingly, are granted one RDO each fortnight by way of accrual of the additional hours at the end of each shift.

...

23. HBCC correctly applies the Agreement when it deducts, on average, 8.44 hours from outdoor depot-based employees annual sick leave entitlements when employees access their sick leave. Accordingly, if an employee takes sick leave on days 1 to 8 of the fortnight (i.e. when they would usually work 8.5 hours) the HBCC deducts 8.5 hours from their sick leave entitlements. When an employee takes sick leave on the ninth day (i.e. when they would usually work for 8 hours), then HBCC deducts 8 hours from their sick leave entitlements.

24. The deduction of the 8.5 or 8 hours (average 8.44 hours) is to cover the additional time to be accrued towards the RDO. For the employees to maintain the RDO's, even when using sick leave, HBCC allows outdoor depot-based employees to accrue the additional time.

25. HBCC's method of accrual and deduction of sick leave means an outdoor depot-based employee can be absent from work on paid sick leave for 10.8 days (91.2/8.44) each year.

26. This process for calculating and debiting sick leave entitlements has been the custom and practice of HBCC for a considerable period of time and is applied in this way for administrative convenience. It would be extremely difficult and impose significant inconvenience on HBCC if it were to alter this process. An alteration would also mean that the employees concerned would not be able to maintain all of their RDO's, i.e. if they accessed any sick leave in any given two week period.” 10

[17] Hobsons Bay City Council provided various illustrative examples through the evidence provided by the Council’s Payroll Coordinator, Ms Sandra Comito. The examples included a person who had a part day sick leave absence of 1.5 hours. The example shows the employee’s sick leave accrual was debited for 1.5 hours, which is the actual time they were away from the workplace.

Consideration

[18] The Agreement uses the term “ordinary day” only in Part B Clause 39.2 and Clause 39.3, however it uses the term “ordinary” in many different ways, which is consistent with the word’s use in language generally and within industrial instruments. For example, the Agreement refers to “ordinary pay” and “ordinary rates”; the “ordinary hours”, “ordinary spread of hours”, “ordinary daily hours” “ordinary hours of duty”, “ordinary time hours” and “ordinary hours of work”.

[19] The Agreement makes a distinction in the Sick Leave clause between “ordinary day” and “normal working day”. This distinction is illustrated by the following 11:

• An employee who is absent from work on account of personal illness or injury is entitled, after production of satisfactory evidence, to “leave of absence of one ordinary day”;



• This paid leave of absence is conditional upon the employee notifying the employer within the first part of the employee’s “normal working day”.

[20] The standard engagement clause referred to above 12 provides that the “ordinary hours of duty will be 38 per week”, specifying further that the employer will determine the “starting and finishing times of ordinary work on any day”13 and that “the ordinary hours of duty” will be any time Monday to Friday inclusive14. Overtime is payable to outdoor depot employees for work “in excess of or outside the employee’s ordinary hours of duty”15.

[21] “Ordinary” is used within the Agreement in different contexts, and is most usually used to consistently draw a distinction between that which is within unloaded, non-penalty time, and that which deserves different, special or penalty treatment.

[22] The use of the word “ordinary” in the Agreement’s sick leave entitlement and accrual clauses is a term that sets the context for sick leave accrual and entitlement.

[23] Hobsons Bay City Council submitted that interpretation of the Agreement required regard to be had to the “natural and ordinary meaning of its words” which had to be read as a whole and in context, but not in a vacuum.

“37. When seeking to interpret an Enterprise Agreement, regard must first be had to the "natural and ordinary meaning of its words" (The Clothing Trades Award (1950) 68 CAR 597), which are to be "read as a whole and in context" (Australian Timber Works Union v W. Angliss & Co Pty Ltd (1924) 19 CAR 172).

38. Further, the words of the Agreement should not be interpreted "in a vacuum divorced from industrial realities" (City of Wanneroo Holmes [1989] FCA 369; 30 IR 362).”

[24] The ASU submitted that the Commission’s approach should be to follow the principles that:

“10. The principles applicable to interpretation of industrial instruments as set out by the relevant authorities are usefully distilled in The Australian Workers’ Union v Visy Board Pty Ltd T/A Visy Specialties PR963418, at paragraph 12, as follows:

“(a) if the terms of an industrial instrument are clear and unambiguous, then the industrial instrument must be interpreted in accordance with that clear and unambiguous meaning;

(b) the words used in an industrial instrument should not be interpreted in a strict, technical fashion, because those who framed the industrial instrument are often non-lawyers drafting words in the context of custom and practice in an industry or particular enterprise;

(c) each Clause should be interpreted within its context, that is, the meaning of particular words should be read in the context of the industrial instrument as a whole and in the context of the Clause/section in which it falls;

(d) the court or tribunal should strive to give effect to the intention of the authority which made the award (or, presumably, in the case of an agreement, the intent of the parties to the agreement), reasonably be interpreted to mean that which the authority/parties intended them to mean;

(e) the court or tribunal's recourse to extrinsic material in the interpretation of industrial instruments is not dependent upon the existence of ambiguity in the industrial instrument.” (footnotes removed)”

[25] Interpretation of the Agreement requires a construction of a clause agreed by the parties and contained within an Agreement approved by the Fair Work Commission. In doing so, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning 16. The Full Bench has held that while the industrial context and purpose of the Agreement can be considered17, such consideration is against the requirement that the process of interpretative analysis must focus, first and foremost, upon the language of the Agreement itself18 and the interpretative task is to identify the common intention of the parties as they have expressed it in the terms of their Agreement rather than having regard to the parties respective subjective intentions and expectations of the parties as demonstrated by their “statements and actions” in negotiating the Agreement19.

[26] The “context of the industrial instrument as a whole” 20 includes several relevant matters:

• The Agreement uses the terminology “ordinary hours” in a way that delineates time that is not subject to loading or penalty, and time which is.



• In theory at least, employees across the Agreement can be asked to work many different combinations of hours. It follows that an employee could conceivably acquit their 38 hour week in various ways, some of which give the employee a rostered day off arrangement (in addition to weekends) and some which do not.



• Notwithstanding the overall hours possibilities, the hours arrangements for outdoor depot based employees are more limited with a nine day fortnight being specified 21.



• While not dealt with explicitly in the words of the Agreement, in practice sick leave can be taken as part days.



• The accrual arrangements for outdoor depot based employees are in distinction to those for childcare employees, which are expressed as hours 22.

[27] Similarly, the entitlements for sick and carer’s leave are in distinction with annual leave entitlements. The Agreement prescribes that “[a]ll employees (except casual employees), after completing twelve months continuous service will be entitled to four weeks (152 hours) annual leave” 23 with employees to “be paid their ordinary pay as if they had worked instead of taking leave.”24

[28] As noted above, the entitlement to “12 ordinary days leave” in the Agreement is an entitlement more favourable than the Act’s National Employment Standards which provide for “10 days of paid personal/carer’s leave” 25; and the entitlement under the Agreement for employees to “receive a leave of absence of one ordinary day for each completed calendar month service, without loss of pay”26 is no less favourable than the payment entitlement contained within s.99 of the Act.

[29] An approach to the meaning of the phrase “ordinary days leave” 27 that does not consider individual rostering arrangements may well mean different leave outcomes for different employees, depending on their rostering arrangements and access to part day leave.

[30] The question of the practical application of payment for an ordinary day of sick leave was considered in the matter of The Australian Workers’ Union v BP Refinery (Bulwer Island) Pty Ltd 28. The question for determination in that matter was whether employees working 12 hour shifts averaging 35 ordinary hours per week day and entitled, through the enterprise agreement, to 96 hours personal leave each year were actually entitled, because of the NES to 10 days personal/carer’s leave for each year of service, or 120 hours.29 The relevant personal leave clause provided that:

“In respect of each year of continuous service, a continuous shift worker on a 12 hour roster shall accrue paid sick leave at the rate of 96 hours and a day worker at the rate of 70 hours.” 30

[31] The analysis in that matter of the issues in dispute and the interaction of the applicable agreement with the NES included the following:

“[64] I am unable to accept the proposition advanced by the AWU to the effect that the operation of s.96 of the Act, in conjunction with ss.55 and 56, requires that clause 30.1 of the Agreement be applied so that employees working 12 hour shifts are entitled annually to 120 hours of paid Personal Leave, in lieu of the 96 hours of paid Personal Leave specified in that clause.

[65] I have reached this conclusion for the following reasons. The Object of the Act as set out in s.3(b), includes to ensure a guaranteed safety net of fair, relevant and enforceable minimum wages and conditions through the NES, modern awards and national minimum wage orders. A further Object in s.3(a) is providing workplace relations laws that are fair to working Australians; flexible for business and promote productivity and economic growth.

[66] The common understanding of the term “safety net” is a net intended to catch and prevent injury. The concept of a net, necessarily connotes that the NES are integrated, cohesive and connected. In any construction of one of the provisions of the NES, consideration must be given to the other provisions so that the Object of the Act is achieved.

...

[68] In reaching this conclusion I have also had regard to the Fair Work Act Explanatory Memorandum, for the purpose of considering the underlying purpose or object of the relevant provisions and to confirm that their literal meaning was intended. Use of the Explanatory Memorandum for this purpose is consistent with s.15AB of the Acts Interpretation Act 1901. The Explanatory Memorandum is particularly relevant to this matter because it contains illustrative examples relating to the provisions in dispute.” 31

[32] In effect, the Commission held that the safety net to which the employees were entitled under the NES was time away from work for the purposes of sick or personal leave for the time that employees would otherwise have spent at work on 10 notional days, rather than being entitled through the safety net to 10 days of leave for the actual working patterns of the employees concerned.

[33] The factual base of AWU v BP Refinery is clearly different from the issues under consideration in this matter. This is especially so of the sick leave accrual provisions which, in the applicable agreement was set as a number of hours per year, whereas the Agreement in this matter refers to an entitlement to “twelve ordinary days leave”. The issues in AWU v BP Refinery were ultimately around the question of whether the NES provided for an entitlement that was superior to the agreement. In contrast, in this matter there is no claim the Agreement is in conflict with the NES.

[34] Despite these differences, the reasoning in AWU v BP Refinery is of relevance in resolving the critical issue in this matter, which is what is meant by the entitlement to “twelve ordinary days leave”.

[35] Commissioner Asbury (as she then was) dealt with the tension between the entitlement to “10 days leave” set out in the NES and the variety of hours arrangements actually in place in the following way:

“[70] The matter of weekly hours is dealt with in Division 3 of Part 2-2 of the Act. Section 62 of the Act makes a clear distinction between the maximum weekly hours an employer can require an employee to work and “additional hours”. That maximum is 38 hours for full-time employees and the lesser of 38 hours and the employee’s ordinary hours in a week for employees who are not employed on a full-time basis. An employee cannot be requested to work more than the maximum number of hours in a week, unless the additional hours are reasonable (s.62(1)) and an employee may refuse to work additional hours if they are unreasonable (s.62(2)). Among the criteria for determining whether additional hours are unreasonable, is whether the employee is entitled to receive overtime payments, penalty rates or other compensation for, or a level of remuneration that reflects an expectation of, working additional hours: s.62(3)(b).

[71] By virtue of s.63 of the Act, modern awards and enterprise Agreements may provide for an averaging of hours worked, so that employees work more than 38 hours in some weeks for the purpose of achieving an average of 38 hours over a specified period. It is also the case that modern awards generally provide a maximum period over which averaging of ordinary hours can occur, and overtime rates for work in excess of or outside ordinary hours. Thus the provisions of the Act are not prescriptive with respect to averaging of ordinary hours and operate in conjunction with standard modern award provisions, which in turn are a reference point for the application of the better off overall test pursuant to s.193 of the Act, and the basis for the averaging provisions of enterprise Agreements.

[72] I accept the AWU submission that the Act does not prescribe a mandatory maximum of 38 hours that an employer can require an employee to work. However, there is a clear distinction between the maximum hours that an employee can be required to work, and additional hours which the employee can refuse to work, on the grounds that those hours are unreasonable, such that it can be said that the standard is a maximum of 38 hours in a week, or an average of 38 hours in a week, calculated over a specified period, pursuant to the terms of a modern award or enterprise Agreement.

...

[75] Pursuant to s.63, employees may also work an average of 38 hours. Such an average can be achieved in any number of ways, including over a 9 day fortnight with the 10th day being taken as a rostered day off, or a 19 day month with the 20th day being taken as a rostered day off. An averaging system can involve employees working days or shifts of varying duration in a cycle. In all cases, employees accrue 76 hours of Personal/Carer’s leave for each year of service. Further, in all cases, when employees take leave, the amount of leave deducted is equal to the ordinary hours the employee would have worked on that day.

[76] This is apparent from the terms of Divisions 3 and 7 of Part 2-2 of the Act. It is also consistent with the general principles set out in the Explanatory Memorandum. Those principles state that a full time employee who works 38 hours a week over 5 days (Monday to Friday) will accrue the same amount of leave as a full time employee who works 38 ordinary hours of work over 4 days a week, and that over a year of service both employees will accrue 76 hours of paid Personal/Carer’s Leave. An employee who works 38 hours a week over 5 days will work less hours on each of those days than an employee who works 38 hours over 4 days. For example, the 5 days of work will be commonly organised as 5 days of 7.6 hours or 4 days of 8 hours and one 6 hour day, while 4 days of work will commonly be organised as 4 days of 9.5 hours. The employee working 4 days of 9.5 hours does not accrue 95 hours of Personal/Carer’s Leave per annum.

[77] Similarly in the illustrative examples, the employee “Sudhakar” works an average of 152 hours in a four week cycle. If Sudhakar works 152 hours in a four week cycle by working 7.6 ordinary hours on 20 days, he will accrue 76 hours of Personal/Carer’s Leave for each year of service, and 7.6 hours will be deducted from his accrued Personal/Carer’s Leave for each day of such leave that he takes. If Sudhakar works 8 ordinary hours a day for 19 days and has one rostered day off, he still accrues 76 hours of Personal/Carer’s Leave and has 8 hours deducted from his accrual for each day of leave that he takes.

[78] I can see no basis for departing from these principles and applying the minimum standards in the NES, so that employees under the Agreement in the present case, are entitled to 120 hours of Personal/Carer’s Leave each year, because they work their ordinary hours on the basis of 12 per day. If the argument advanced by the AWU was applied to the illustrative example of Sudhakar, the result would be that Sudhakar would be entitled to 80 hours of Personal/Carer’s Leave for each year of service if he worked 8 hours per day on 19 days in a four week cycle and 76 hours of such leave if he worked 7.6 hours on 20 days in a four week cycle. Clearly, that is not the intent of the legislative provisions which comprise the NES.

[79] In the present case, the Agreement provides that the ordinary hours of work for day workers and shift workers are an average of 35 per week, with the averaging period for shift workers being a ten week cycle. Thus, the ordinary hours of work for employees under the Agreement are 35 per week averaged over a ten week cycle, and there is no inconsistency between the provisions of the Agreement and the NES. Accordingly, the ordinary hours of work prescribed by the Agreement are the basis for calculation of paid leave entitlements for any consideration of whether those entitlements are consistent with the provisions of the NES.

[80] To meet the requirements of the NES, employees must be provided with 10 days of personal leave, calculated by reference to their ordinary hours of work over a 10 day period. Thus, the NES entitlement of employees covered by the Agreement to personal/carer’s leave is 70 hours per annum. The Agreement specifies that shift workers are entitled to 96 hours of personal/carer’s leave per annum, and therefore provides an entitlement in excess of that provided in the NES.

[81] There is a distinction in the NES leave provisions between accrual of paid leave and payment for such leave, with separate provisions governing these matters. There is also a distinction between types of paid leave that accrues based on years of service (annual leave and personal carer’s leave) and paid leave to which employees are entitled on particular occasions (compassionate leave and leave for the purposes of engaging in jury service). Where an additional entitlement for shift workers is prescribed in respect of annual leave, this is made clear in the provisions. In all cases however, employees are paid for such leave at their base rate of pay for ordinary hours in the period during which the leave is taken.

[82] I do not accept that the NES requires that paid Personal/Carer’s Leave accrues at the rate it is taken. I also do not accept that the 96 hour entitlement to Personal Leave under the Agreement equates to only 8 days of such leave. The NES requires that leave accrues on the basis of the average ordinary hours of an employee so that the total of such accrual is equivalent to the ordinary hours of the employee in a 10 day period. Personal/Carer’s Leave accrues from year to year, and is expended on the basis of the ordinary hours that the employee would have worked on the day it is taken. It is not necessary to define the term “day” for the purposes of accrual of Personal/Carer’s Leave, because accrual is based on an average.

[83] There is nothing novel or unfair about accruals of leave being calculated on the basis of a notional day. All of the major cases involving reductions in standard working hours have involved proportionate reductions to sick leave accruals based on the concept of averaging. There is nothing novel about leave being taken at a different rate to that at which it accrues. This is also apparent from the general principles and illustrative examples in the Explanatory Memorandum.

[84] Employees who work under arrangements such as that which applies to shift workers under the Agreement in the present case, are required to work their ordinary hours on fewer days. The Agreement provides for a roster which operates over a ten week cycle. For the purposes of the roster, a week runs from Friday to Thursday. Employees are rostered to work between two and four days in each week of the ten week cycle. Thus an employee covered by the Agreement who is sick for a week, would generally expend a minimum of twelve hours of personal/carer’s leave in that week and a maximum of 48 hours of such leave. There is no unreasonable or inequitable result in adopting the interpretation set out above, and neither is it incongruous.” 32

[36] While I reiterate that the factual base of AWU v BP Refinery is very different from this matter, I draw from the decision, and adopt as relevant to the interpretation of the Agreement in this matter, the following principles:

• The entitlement to a particular number of “days” or “ordinary days” leave does not lead to the view that there is a requirement that paid Personal/Carer’s Leave accrues at the rate it is taken.



• There is nothing novel or unfair about accruals of leave being calculated on the basis of a notional day.



• To meet the requirements of the Agreement, employees must be provided with 12 days of personal leave, calculated by reference to their ordinary hours of work over a 12 day period (and by reason of the use of the requirement in Part B, Clause 39.2.2 to notify an employer of absence during the first part of the “normal working day”, I discern “ordinary hours” and “ordinary day” to be a reference to the hours that would notionally be worked on a day, namely 7.6 hours).

[37] Within the context of the Agreement, construed as a whole, the phrase “entitled to have twelve ordinary days leave ... without loss of pay” means an entitlement to leave equal to the time that would be worked on 12 ordinary days of 7.6 hours duration. The word “ordinary” is used in the Agreement to distinguish between ordinary, uneventful or unpenalised time and different words or phrases are used when something else is intended.

[38] The proper construction of the Agreement is that an employee has an entitlement to leave calculated on the basis of a notional day, which is consistent with sick leave accruals being based on the concept of averaging, and is consistent with leave sometimes being taken at a different rate to that at which it accrues because of the applicable rostering arrangements.

[39] For this reason, I determine the dispute by finding that the correct interpretation of the Agreement is that it provides for a sick leave entitlement accrual of 12 ordinary days per year, notionally of 7.6 hours each, equivalent to an accrued entitlement of 91.2 hours per in the case of outdoor depot based employees working a nine-day fortnight.

COMMISSIONER

Appearances:

S. Shepherd, for the Australian Municipal, Administrative, Clerical and Services Union.

G. Katz, solicitor, for the Hobsons Bay City Council.

Hearing details:

2013.

Melbourne:

October 30.

 1   AE881284

 2   Agreement, Part A, Clause 22.6.5(b)

 3   See s.739(4) and (5)

 4   HBCC Outline of Submissions, 13 September 2013, para 7

 5   ASU’s Outline of Submissions, 28 August 2013, paras 12 - 17

 6   Ibid, clause 6

 7   ASU Outline of Submissions, para 19; HBCC Outline of Submissions, para 17

 8   FW Act, s.55(5)

 9   ASU Outline of Submissions, para 29 - 31

 10   Outline of Submissions of the Respondent, para 15 and 23 - 26

 11   Both from Agreement Pt B, Cl. 39.2.2

 12   Agreement Pt B, Cl. 33.1

 13   Ibid, Part B, Clause 33.1.1

 14   Ibid, Part B, Clause 33.3

 15   Ibid, Part B, Clause 34.3.1

 16   Kucks v CSR Limited, (1996) 66 IR 182, at 184

 17   Shop, Distributive and Allied Employees Association (Queensland Branch) Union of Employees v Woolworths Limited T/A Woolworths, [2013] FWCFB 2814, at [12]

 18   Ibid, with reference to Amcor Limited v CFMEU

 19   Ibid, at [13]

 20   The Australian Workers’ Union v Visy Board Pty Ltd T/A Visy Specialties, (2005), PR963418, at [12]

 21   Agreement, Pt A, Cl. 17.4

 22   Ibid, Pt B, Cl. 39.3.1

 23   Ibid, Pt B, Cl. 41.1.1

 24   Ibid, Pt B, Cl. 41.2.1

 25   s.96(1)

 26   Agreement, Pt B, Cl. 39.2.2

 27   Ibid, Pt B, Cl. 39.2.3

 28  (2012) 221 IR 237

 29   Ibid, at [2]

 30   Ibid, at [8]

 31   Ibid, at [64] - [66], [68]

 32   Ibid, at [70] - [84]

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