| [2015] FWC 2461 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.739—Dispute resolution
Elizabeth O’Neill
v
Roy Hill Holdings Pty Ltd
(C2014/6526)
COMMISSIONER WILLIAMS |
PERTH, 10 APRIL 2015 |
Application to deal with a dispute.
[1] This matter concerns an application by Mrs Elizabeth O’Neill (Mrs O’Neill or the applicant) made under section 739 of the Fair Work Act 2009 (the Act). The respondent is Roy Hill Holdings Pty Ltd (Roy Hill or the respondent).
[2] Following a conference convened by the Commission the parties have agreed to a variation of Mrs O’Neill’s terms and conditions of employment to include a term that provides for dealing of disputes by the Commission and allowing for arbitration pursuant to sections 738(c), 739(4) and 739(6) of the Act.
[3] Accordingly the dispute has been referred to the Commission for arbitration and I am satisfied there is jurisdiction for the Commission to deal with the matter.
[4] The dispute concerns questions of Mrs O’Neill’s entitlement to annual leave and the taking of annual leave. There are three questions to be determined by the Commission:
1. Does Mr O’Neill qualify for the shiftworker annual leave entitlement under section 87(3) of the Act, being five weeks of annual leave in accordance with section 87(1)(b)(iii) of the Act?
2. Can Roy Hill require Mrs O’Neill to take a period of annual leave to include days that, under her roster, would be working days and non working days?
3. Can Roy Hill require Mrs O’Neill to take any period of annual leave in a multiple of the on-duty period and/or off-duty period under her work cycle roster or in accordance with her roster cycle?
[5] At the hearing of the matter Mrs O’Neill was self represented and chose not to give evidence but to rely on the written materials she had provided to the Commission.
[6] Roy Hill called Mr Alan Bradshaw (Mr Bradshaw) to give evidence. Mr Bradshaw is Roy Hill’s Employee Relations Manager.
[7] Mr Bradshaw gave detailed evidence as to the terms and conditions of Mrs O’Neill’s employment and her roster.
[8] There is no dispute about the relevant facts of this matter.
[9] Roy Hill accepts that in order to properly determine this dispute the most favourable interpretation of these facts for the benefit of Mrs O’Neill’s argument should be accepted by the Commission. This approach acknowledges that at this point in time Mrs O’Neill has not fully completed a 12 month roster cycle 1.
[10] The facts then of Mrs O’Neill’s roster for the future are as detailed in Exhibit R3. Assuming no change to these roster arrangements and that Mrs O’Neill works the current roster for the 2015 calendar year the facts on which this matter will be determined are that Mrs O’Neill will then have worked 31 Sundays and 4 public holidays.
[11] In addition the respondent has provided detail of future rosters which demonstrates that in the longer term over a period of four calendar years from 2015 to 2018 and recognising that the roster is worked by five different crews, being A to E, there is some consequential variation to the number of Sundays and public holidays worked by the different crews over the year. The overall average figures for these crews across these years would then be 31.35 Sundays and 6 public holidays worked making together an overall average of 37.35 Sundays and public holidays for all crews per year.
[12] These latter figures are the most favourable to Mrs O’Neill and this decision will be based on the fact that on average under the current roster projected through to 2018 she will work 31.35 Sundays and 6 public holidays per year.
[13] The most Sundays worked in a year under the roster are by crew A who in 2017 will work 33 Sundays.
[14] Additional factual findings will be dealt with below as is relevant to each question in turn.
[15] I am satisfied the facts are that Mrs O’Neill is not covered by a modern award or enterprise agreement and she is employed under a contract of employment dated 11 August 2014.
[16] Mrs O’Neill is employed in Roy Hill’s remote operation centre within their Perth head office. As such I find that Mrs O’Neill is employed in an enterprise in which shifts are continually rostered 24 hours a day for seven days a week.
[17] I find that Mrs O’Neill works on a roster system whereby she is regularly rostered to work those shifts. Mrs O’Neill currently receives four weeks of annual leave per year of service.
[18] Mrs O’Neill does work on Sundays and public holidays as determined by the roster.
[19] The sections of the legislation relevant to this question are set out below.
“86 Division applies to employees other than casual employees
This Division applies to employees, other than casual employees.
87 Entitlement to annual leave
Amount of leave
(1) For each year of service with his or her employer, an employee is entitled to:
(a) 4 weeks of paid annual leave; or
(b) 5 weeks of paid annual leave, if:
(i) a modern award applies to the employee and defines or describes the employee as a shiftworker for the purposes of the National Employment Standards; or
(ii) an enterprise agreement applies to the employee and defines or describes the employee as a shiftworker for the purposes of the National Employment Standards; or
(iii) the employee qualifies for the shiftworker annual leave entitlement under subsection (3) (this relates to award/agreement free employees).
Note: Section 196 affects whether the FWC may approve an enterprise agreement covering an employee, if the employee is covered by a modern award that is in operation and defines or describes the employee as a shiftworker for the purposes of the National Employment Standards.
Accrual of leave
(2) An employee’s entitlement to paid annual leave accrues progressively during a year of service according to the employee’s ordinary hours of work, and accumulates from year to year.
Note: If an employee’s employment ends during what would otherwise have been a year of service, the employee accrues paid annual leave up to when the employment ends.
Award/agreement free employees who qualify for the shiftworker entitlement
(3) An award/agreement free employee qualifies for the shiftworker annual leave entitlement if:
(a) the employee:
(i) is employed in an enterprise in which shifts are continuously rostered 24 hours a day for 7 days a week; and
(ii) is regularly rostered to work those shifts; and
(iii) regularly works on Sundays and public holidays; or
(b) the employee is in a class of employees prescribed by the regulations as shiftworkers for the purposes of the National Employment Standards.
(4) However, an employee referred to in subsection (3) does not qualify for the shiftworker annual leave entitlement if the employee is in a class of employees prescribed by the regulations as not being qualified for that entitlement.
(5) Without limiting the way in which a class may be described for the purposes of paragraph (3)(b) or subsection (4), the class may be described by reference to one or more of the following:
(a) a particular industry or part of an industry;
(b) a particular kind of work;
(c) a particular type of employment.”
[20] The facts of this matter demonstrates that Mrs O’Neill is award/agreement free and meets the requirements of section 87(3)(a)(i) and (ii) of the Act and further that 87(3)(b) is not applicable.
[21] The disagreement between the parties is whether Mrs O’Neill meets the final requirement provided in 87(3)(a)(iii) of the Act that she:
“regularly works on Sundays and public holidays”
[22] The facts are that Mrs O’Neill on average works 31.35 Sundays and 6 public holidays per year.
[23] Mrs O’Neill argues that this amounts to regularly working on Sundays and public holidays and as such she meets all of the requirements for the entitlement of a fifth week of annual leave.
[24] In reply Roy Hill argue that the words “regularly works on Sundays and public holidays” have a meaning that can be ascertained from past case law going back many decades. They say a review of the case law demonstrates that this phrase means an employee who works an average of 34 Sunday shifts and 6 public holiday shifts over a 12-month period.
[25] In Re Iron and Steel Works Employees (Australian Iron & Steel Pty Ltd—Port Kembla) Award and Another Award 2 (the Steel Case), Richards J considered whether a continuous seven day shift worker should be entitled to double time for working public holidays. In the course of his decision at page 469 His Honour set out an average calculation of 34 Sundays for a seven-day shiftworker.
[26] Following this in Re Shift Workers Case 3, the Industrial Commission (Beattie J, President, McKeon, Sheehy, Sheldon and Sheppard JJ) applied the 34 Sunday calculation from the Steel Case. The Commission combined the 34 Sunday calculation with the phrase “regularly to work on Sundays and public holidays” from an earlier decision in Fireman and Deckhands Case4, stating at page 659 that:
“We make our decision bearing in mind that the true 7-day shift worker usually receives 1 week’s annual leave in addition to the standard prescription of 3 weeks in the Annual Holidays Act. This additional week’s leave primarily is part of the compensation for the requirement that they should work on most Sundays during the year although it also covers the requirement that they work on the majority of public holidays. As Beattie J. said in the Firemen and Deckhands Case when speaking of the awarding of annual leave longer than prescribed by the Annual Holidays Act:
The case for extension of the period of annual leave must be based on the fact that the employees are called upon regularly to work on Sundays and public holidays. There is no other ground.
But the extra week’s leave is mainly directed to Sunday work. A 7-day shift worker normally works 5/7ths of all Sundays and public holidays in a year. Allowing for 4 weeks’ annual leave (it is a little more with added days) this would mean that the true 7-day shift worker works about 34 Sundays and seven public holidays in a year (see Steel Case). Having regard to the very special position of public holidays in the community structure, it is our view that to award to 7-day shift workers double time and a half for working on public holidays, even when taken in conjunction with the additional week’s annual leave, will provide no more than reasonable remuneration.” (Underlining added)
[27] It was submitted for Roy Hill that thereafter the case law has, with very limited exceptions which can be distinguished given the particular nature of the matters that were being determined, accepted the minimum threshold as being 34 Sundays needing to be worked to qualify for a fifth week of annual leave.
[28] In Media, Entertainment and Arts Alliance [MEAA] and Theatrical Employees (Sydney Convention and Exhibition Centre) Award 1989 5, the Australian Industrial Relations Commission (Senior Deputy President Marsh, Deputy President Duncan and Commissioner Wilks) considered an application to vary an award to include an additional weeks leave with a pro rata stipulation on the basis of a 31 Sundays standard.
[29] The Commission considered the arbitral history of the grant of additional leave for shift workers at pages 6 to 9 and at page 10 stated:
“On the arbitral decisions before us a number of industries, particularly in the NSW jurisdiction, have defined 7-day shift workers "regularly working on Sundays" as employees who work 34 ordinary shifts on Sundays (that is excluding overtime shifts): in some decision provision is made for a pro rata entitlement for other employees who are not 7-day shift workers to ensure equitable treatment.
The most expansive decision is the 1976 Annual Leave Case in which the NSW Industrial Commission established the formula for 7-day shift workers who work an "equal number of shifts on each of the seven days of the week": the resultant formula producing a requirement to work a minimum of 34 Sunday shifts and 6 public holidays - this test was accepted by both parties before us as an applicable guideline to apply to 7-day continuous shift workers.” (Underlining added)
[30] From that point onwards in its decision the Full Bench of the Commission in that case adopted the requirement to have worked 34 Sundays as the proper basis to determine the matter before it.
[31] More recently In Australian Municipal, Administrative, Clerical and Services Union – Western Australian Branch and Western Power Corporation 6, Commissioner Mansfield considered the threshold number of Sundays and public holidays required to be worked before shiftworkers become entitled to extra recreation leave.
[32] The background was that Western Power Corporation employed union members as production officers under the Electricity Industry (Western Power Corporation) Award 2000 7. The production officers worked on a roster cycle of 18 weeks, comprising nine weeks of 12-hour day and night shifts over seven days and nine weeks of day shifts (9.77 hours) Monday to Friday. The 18-week roster cycle was repeated over a full year resulting, in effect, in the production officers working six months on continuous shifts and six months on a standard day shift.
[33] Commissioner Mansfield considered the Media, Entertainment and Arts Alliance [MEAA] and Theatrical Employees (Sydney Convention and Exhibition Centre) Award 1989 8 case before holding at [17] that:
“The threshold for establishing an entitlement to an extra week’s annual leave through regularly working Sundays and public holidays whilst on shift work is that employees work 34 Sundays on a normal (not an overtime) shift in a year.”
[34] The Commission is entitled to have regard to the historical context to confirm the meaning of these words in the Act, including the decisions of Courts and Tribunals that developed this entitlement which has now been enacted by the legislature as one part of the National Employment Standards 9.
[35] Consequently it is appropriate that I have regard for these earlier decisions and so determine that an employee “regularly works on Sundays and public holidays” if they have worked at least 34 Sundays and 6 public holidays in a year.
[36] Given that interpretation and the fact that Mrs O’Neill will in due course work on average 31.35 Sundays and 6 public holidays in a year and not work more than 33 Sundays in a year the answer to the first question is - No.
Question - 3 Can Roy Hill require Mrs O’Neill to take any period of annual leave in a multiple of the on-duty period and/or off-duty period under her work cycle roster or in accordance with her roster cycle?
[37] These two questions are directly related and so are considered together below.
[38] Facts relevant to this question are the terms of the parties’ contract.
[39] Mrs O’Neill’s contract indicates she is a salaried employee with a base salary of $122,000 per year and that she received a $10,000 shift allowance.
[40] Page 3 of Mrs O’Neill’s Employment Contract 10 under the heading ‘Leave Entitlements’ says:
“You are entitled to leave in accordance with the National Employment Standards (NES).
Annual leave
Annual leave will accrue at the rate of four weeks per year for each year of continuous service. Annual leave is accrued on a pro-rata basis progressively.
...
For details pertaining to these and other leave entitlements and conditions, please refer to the Roy Hill Leave Standard.”
[41] Clause 1− Purpose and Scope of the Roy Hill Leave Standard 11 states that:
“The standard is applicable to all the salaried employees of Roy Hill Holdings Pty Ltd, including Perth-based employees, residential based employees and fly in fly out (FIFO) employees.”
[42] Clause 2.1 of the Roy Hill Leave Standard (‘Annual Leave’) relevantly provides that:
“...
• Paid annual leave may be taken at a time agreed between the Company and the employee.
...
• Employees employed on a rotating days, afternoons and nights roster (7 on, 3 off; 4 on, 4 off; 7 on, 3 off; 3 on, 4 off DAN), will be expected to take annual leave in blocks of day’s equivalent to their working swing.” (Underling added)
[43] Mrs O’Neill is employed on a roster of rotating days, afternoons and nights as immediately above which is specified in her contract of employment under the heading ‘Roster’.
[44] The relevant provisions of the legislation are set out below.
(1) Paid annual leave may be taken for a period agreed between an employee and his or her employer.
(2) The employer must not unreasonably refuse to agree to a request by the employee to take paid annual leave.”
“94 Cashing out and taking paid annual leave for award/agreement free employees
Agreements to cash out paid annual leave
(1) An employer and an award/agreement free employee may agree to the employee cashing out a particular amount of the employee’s accrued paid annual leave.
(2) The employer and the employee must not agree to the employee cashing out an amount of paid annual leave if the agreement would result in the employee’s remaining accrued entitlement to paid annual leave being less than 4 weeks.
(3) Each agreement to cash out a particular amount of paid annual leave must be a separate agreement in writing.
(4) The employer must pay the employee at least the full amount that would have been payable to the employee had the employee taken the leave that the employee has forgone.
Requirements to take paid annual leave
(5) An employer may require an award/agreement free employee to take a period of paid annual leave, but only if the requirement is reasonable.
Note: A requirement to take paid annual leave may be reasonable if, for example:
(a) the employee has accrued an excessive amount of paid annual leave; or
(b) the employer’s enterprise is being shut down for a period (for example, between Christmas and New Year).
Agreements about taking paid annual leave
(6) An employer and an award/agreement free employee may agree on when and how paid annual leave may be taken by the employee.
Note: Matters that could be agreed include, for example, the following:
(a) that paid annual leave may be taken in advance of accrual;
(b) that paid annual leave must be taken within a fixed period of time after it is accrued;
(c) the form of application for paid annual leave;
(d) that a specified period of notice must be given before taking paid annual leave.”
[45] In addition the Explanatory Memorandum to the Fair Work Bill 2008 provides guidance for assessing whether a requirement to take a period of paid annual leave is reasonable:
“381. Subclause 93(3) permits terms to be included in an award or agreement that require an employee, or that enable an employer to require or direct an employee, to take paid annual leave in particular circumstances, but only if the requirement is reasonable. This may include the employer requiring an employee to take a period of annual leave to reduce the employee’s excessive level of accrual or if the employer decides to shut down the workplace over the Christmas/New Year period.
382. In assessing the reasonableness of a requirement or direction under this subclause it is envisaged that the following are all relevant considerations:
• the needs of both the employee and the employer’s business;
• any agreed arrangement with the employee;
• the custom and practice in the business;
• the timing of the requirement or direction to take leave; and
• the reasonableness of the period of notice given to the employee to take leave.
...
385. Subclause 94(5) allows an employer to require an award/agreement free employee to take a period of paid annual leave, but only if the requirement is reasonable. The factors for assessing the reasonableness of a requirement identified for subclause 93(3) equally apply here.”
[46] Mrs O’Neill objects to being required to take her annual leave in such a way that the period includes days under her roster that she would be working and other days she would not be working and she objects to being required to take periods of leave in multiples of the on duty period and/or of duty period under her roster or in accordance with her roster cycle. Mrs O’Neill would prefer to be able to take short periods of leave as she wishes.
[47] Roy Hill submits that it is reasonable for it to require Mrs O’Neill to take annual leave in a multiple of the on-duty period and/or off-duty period under work cycle roster, or to take her annual leave in accordance with the roster cycle because this is an arrangement the parties have contractually agreed to as is seen by the terms of Mrs O’Neill’s contract and the Roy Hill Leave Standard (see paragraph [41]).
[48] Further it is submitted that the context of this agreed arrangement is that the Mining Industry Award 2010 12 (the Mining Award), which would cover Mrs O’Neill’s employment but for her being excluded from coverage by reason of her being employed in the head office of Roy Hill, at clause 23 allows employers to require employees to take leave in this way. While not binding on the parties to this dispute, the Mining Award provides guidance as to the standard practice in the industry in which Roy Hill operates and reinforces this requirement is reasonable.
[49] The respondent submits the Commission should facilitate the retention of these arrangements and that if employees on cycle work were not able to be required to take leave in multiples of their roster, it could potentially lead to unintended practical consequences. For example, an employee working a one week on one week off roster could simply purport take a week of leave in the “week on”, and thereby ignore the period rostered as nonworking days (and effectively double the leave benefit).
[50] The Act expressly provides in section 94(6) that an employer and an award/agreement free employee may agree on when and how paid annual leave may be taken by the employee. This is exactly what the parties did when they made their contract which includes an express provision dealing with this issue. That contract provides that Mrs O’Neill, given the nature of her roster, will be expected to take annual leave in blocks of days equivalent to her working swing. Mrs O’Neill agreed to this when she accepted the contract of employment.
[51] It is quite reasonable for Roy Hill to require Mrs O’Neill to honour this part of her contract just as she is entitled to require them to honour other terms of her contract.
[52] Consequently my decision is the answer to question 2 is - Yes and the answer to question 3 is - Yes.
COMMISSIONER
Appearances:
E O’Neill on her own behalf.
S Wood and R Pintos-Lopez of Counsel for the respondent.
Hearing details:
2015.
Perth:
February 20.
1 Transcript at PN112 and PN113.
2 [1965] IR 449.
3 [1972] AR 633.
4 (1959) AR 35.
5 Print M7325.
7 AP781097.
8 Print M732544.
9 [2014] FWCFB 3202 at [46].
10 Exhibit R1, Attachment ARB 5.
11 Ibid., Attachment ARB 7.
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