[2016] FWC 638 [Note: An appeal pursuant to s.604 (C2016/500) was lodged against this decision - refer to Full Bench decision dated 15 August 2016 [[2016] FWCFB 3075] for result of appeal.]


Fair Work Act 2009

s.739 - Application to deal with a dispute

"Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU)
Forgacs Engineering Pty Ltd T/A Forgacs



Application to deal with a dispute.

[1] This decision relates to an application by the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU), with the support and consent of Forgacs Engineering Pty Ltd (Forgacs), in relation to an interpretation of the Forgacs Engineering Pty Ltd Enterprise Agreement 2013 1 (the Agreement).

[2] The parties tabled an Agreed Statement of Facts 2 which contained an agreed question for determination, namely:

[3] The AMWU was represented by its Legal Officer, Ms Lucy Saunders. Forgacs was represented by Mr David Tiller from The Australian Industry Group (AiG).


[4] The Agreed Statement of Facts 3 provides a useful summary of the dispute:

[5] The relevant provisions of the Agreement 4 are:

Summary of Submissions

[6] The AMWU argued that if casual service is recognised under the National Employment Standards (NES), then due to the operation of section 55 and 56 of the Fair Work Act, 2009 (the Act), which basically renders provisions of an Agreement or Modern Award which are less beneficial then the NES as ineffective or invalid, then clauses 21.1.3 and 23.6 of the Agreement have no effect.

[7] Part 2.2 Division 11, of the Act deals with notice of termination and redundancy pay. The amount of payment given to an employee in this circumstance is based on the calculation of “continuous service”. Continuous service is not defined in Division 11 of the Act. However, section 123(1)(c) says:

[8] In an attempt to overcome this exclusion, the AMWU referred me to the definition of continuous service in section 12 of the Act which says:

[9] The AMWU argued that section 22 encompasses both casual and permanent employment.

[10] Further, the AMWU referred me to section 384 of the Act, which states:

[11] The AMWU referred me to section 65 of the Act, requests for Flexible Service, which states:

[12] The AMWU argued that the legislation specifically excluded casual employees from section 65 (2)(a) which clearly indicates that the legislator has identified that casual service counts as continuous service except where specifically excluded.

[13] The AMWU also argued that “notice” and “redundancy” are not accruing rights like annual leave or long service leave. They do not accrue as your employment continues but are merely benefits that may get paid at a certain point in time after certain preconditions are met. An employee only receives the notice or redundancy payment if they are unlucky enough to lose their job.

[14] The AMWU compared the service of casuals who are made permanent employees to the service of an apprentice who is employed at the conclusion of their apprenticeship. It is settled law that employees who were apprentices immediately before their permanent employment have their apprenticeship service “count” for the purposes of notice and redundancy pay, even though they are not entitled to notice or redundancy during their apprenticeship.

[15] Finally, the AMWU argued that their interpretation of continuous service is consistent with the entire scheme of the Act and consistent with the Objects of the Act.

[16] AiG argued that when the relevant employees were working as casuals for Forgacs, they were paid a 25% loading on top of the wage rate of the permanent employee.

[17] AiG referred me to Clause 21.1.3 and 23.6 of the Agreement. AiG argued that Clause 21.1.3 specifically excludes casual employees from receiving any “notice” payment and that that Clause 23.6 refers the Agreement back to the NES provisions, which also precludes a casual employee from receiving notice or redundancy pay (see section 123(1)(c) above).

[18] AiG also referred me to clause 14 of the Agreement (see above) which contains the casual conversion clause which identifies when a casual employee can transfer to permanent employment after 6 months continuous service if there is a foreseeable continuity of work. Significantly, the clause identifies that Casuals are paid a loading of 25% on top of the permanent employees rate. AiG argued that this loading is being used to “buy out” the entitlements enjoyed by permanent employees, including notice and redundancy pay.

[19] AiG stated that there is a natural flow on from these provisions, ie, because casual employees are not entitled to notice or redundancy pay under the Agreement or the NES, it is logical that the employee does not accrue “service” during any period of casual employment that would count towards notice or redundancy pay.

[20] Mr Tiller referred me to the “Metals Casual Case” 5, which is the benchmark Full Bench Decision in this sphere of employment law. The Full Bench said:

(My emphasis)

[21] AiG submitted that the definition of “service” in the Act does not specifically include or exclude periods of casual employment. Mr Tiller identified a range of other NES entitlements which do not apply to a casual employee, such as:

[22] AiG advised that the Act makes special provisions in relation to casual employees gaining access to the unfair dismissal remedies in the Act (see section 384(2) above). AiG argued that casual employees gaining access to the unfair dismissal provisions under the 2009 Act by an expressed provision was a significant change from the previous Act and that if the legislature had intended for casual employees to gain access to the notice and redundancy pay provisions of the Act then the legislature would have included an express provision in these terms.

Prior Authority

[23] Both parties referred me to a number of cases, two of which were recent and on point.

[24] In Australian Municipal, Administrative, Clerical and Services Union v Fairfax Regional Media – Newcastle Newspapers (Herald) 6, Sams DP was asked to provide an opinion, rather than a decision, in relation to the dispute. He said:

[25] In Transport Workers’ Union v Q Catering Limited 7, Hampton C, held:

[26] Commissioner Hampton referred to a decision of the Industrial Relations Court of South Australia in Schuman v Pace Trading Pty Ltd 8, where it was held that an employee’s prior casual service does not count for the purposes of calculating redundancy pay entitlements. Hardy IM held:

[27] In the Australian Meat Industry Employees Union v Golden Cockerel Pty Ltd 9, a Full Bench of the FWC provided a useful summary in relation to the interpretation of Enterprise Agreements, but also conveniently provided a summary of the relevant precedents in relation to Statutes and Awards:


[28] I have taken into account all of the submissions of the parties both written and verbal. This is a complex matter which has required detailed analysis and deliberation in relation to the Act, the Modern Award and the Agreement.

[29] It is agreed between the parties that this dispute is not an attempt to obtain notice and redundancy pay for casual employees but rather an enquiry as to whether prior casual service of a permanent employee should count towards the calculation of “continuous service” for the calculation of the notice and redundancy pay entitlements of the Agreement.

[30] I do not accept the argument that casuals transferring to permanent employment can be reconciled with the situation of apprentices being employed as tradespersons. Apprenticeships are completely different. Apprentices do not have a contract of employment with their employer but a contract of training. Whilst the set 4 year apprenticeship has all but disappeared from the industrial landscape due to the introduction of competency based training, the contract specifies a learning outcome based on skills acquisition and competency assessment. Apprentices are paid a fraction of the tradesman rate, not a loading, and accrue benefits such as annual leave and personal leave which are benefits and entitlements accrued by permanent employees – not casuals. I have taken this into account.

[31] I accept the submission and find that the “Metals Casual Case” provided compensation for the “prominent discrepancy” between casuals and permanent employees in relation to notice and redundancy pay in determining the appropriate level of the casual loading. I have taken this into account.

[32] I have taken into account and applied the principals for the interpretation of enterprise agreements, namely, by giving words their plain and ordinary meaning. As such, I am not convinced that there is any ambiguity in relation to the meaning and interpretation of the Agreement.

[33] In relation to the interpretation of the Act, I adopt the obiter cited earlier in Kucks. It is not within the scope or jurisdiction of the Fair Work Commission to extend the employment benefits of casual employees by importing words or notions into the Act, in order to satisfy the notions of fairness and justice.

[34] The AMWU’s argument focusses on the meaning of the term “continuous service” and its correlation with the phrase “period of service” in section 22 of the Act and then applies that connection to section 384 of the Act. However, as the Full Bench said in Wayne Shortland v The Smiths Snackfood Co Ltd 14:

I have taken this into account.

[35] The argument in relation to “double dipping” was not extensively argued at the hearing, however, the argument does have merit. It would not seem to be fair or logical for an employee who has been paid a loading, which I have found to contain compensation for notice and redundancy pay, to then be able to use that same period of service in the calculation of notice and redundancy pay as a permanent employee. As an example, if two employees had started with Forgacs on the same day – employee A as a permanent employee, employee B as a casual. For 6 months, employee B receives the same rate as A, plus a 25% casual loading. After 6 months, B becomes a permanent employee in accordance with section 14 of the Agreement. If 2 years and 9 months later both A and B get made redundant, the AMWU believe that both employees have 3 years and three months continuous service for the purposes of their notice and redundancy entitlements. This would mean that both A and B would receive the same notice and redundancy pay. I cannot see how such an outcome is possibly fair to employee A. Employee B received a 25% loading for 6 months, which contained compensation for the lack of notice and redundancy pay entitlement in B’s initial period of employment.

[36] I agree with the sentiments of Industrial Magistrate Hardy, Deputy President Sams and Commissioner Hampton that the legal principal against “double dipping” in this regard is a logical, well known and universally accepted industrial practice.

[37] I accept the argument that if the legislature had wanted prior casual service to count towards a permanent employees period of service then it would have been expressly stated in the Act in a manner similar to the way section 384 has provided for access for casual employees into the unfair dismissal provisions of the Act.

[38] The provisions of the Agreement are also drafted without ambiguity. The NSW Branch of the AMWU is an intelligent, well run and highly respected Union. If the AMWU had wanted to count this casual service towards the service of a permanent employee, then it would have negotiated an appropriate, clear and concise provision in the Agreement to facilitate this outcome.


[39] Whilst accepting that the term “continuous service” has not been definitively defined within the Act, I do not accept the proposition enunciated by the AMWU.

[40] The wording of the Agreement is without ambiguity. The plain and ordinary meaning of the Act identifies no reduction in entitlement and therefore no impediment to the operation of the Agreement.

[41] It is a long held principle of industrial jurisprudence that casual employees are paid a loading to compensate them for the loss of benefits and rights afforded to permanent employees. Access to notice and redundancy pay is one the benefits of full time employment that are forgone by casual employees.

[42] I find that the prior casual service of permanent employees does not count towards the calculation of the period of service for the purposes of notice and redundancy pay at Forgacs.

[43] The application is dismissed.


 1   [2013] FWCA 4338 - AE402153

 2   Exhibit A2 – AMWU Outline of Submissions paragraph 3.

 3   Exhibit A1

 4   [2013] FWCA 4338 – AE402153

 5   Metal, Engineering and Associated Industries Award 1998 – Part 1, (2000) 110 IR 247)

 6   [2014] FWC 5631

 7   [2014] FWC 6160

 8   (2009) 169 IR 101

 9   [2014] FWCFB 7447

 10   (2006) 153 IR 426

 11   Ibid at 438

 12   (1966) 66 IR 182

 13   Ibid at 184

 14   [2010] FWAFB 5709

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