DECISION

Fair Work Act 2009
s.604 - Appeal of decisions

D&D Traffic Management Pty Ltd
v
The Australian Workers’ Union & Ors
(C2021/1467)

Appeal against decisions [2021] FWC 1017 on 24 February 2021 and [2021] FWC 1287 on 10 March 2021 of Deputy President Cross at Sydney in matter number AG2020/3491.

Introduction and factual background

[1] D&D Traffic Management Pty Ltd (D&D) has filed an appeal pursuant to s 604 of the Fair Work Act 2009 (FW Act), for which permission to appeal is required, against decisions of Deputy President Cross issued on 24 February 2021 1 (first decision) and 10 March 20212 (second decision). The decisions concerned D&D’s application for approval of the D&D Traffic Management & Other Work Enterprise Agreement 2020 (Agreement). In the first decision, the Deputy President determined that he could not be satisfied that employees would be better off overall under the Agreement due to the definition of “shiftwork” in respect of the civil construction sector in clause 34.2(a) of the Building & Construction General On-site Award 2010 (Building Award), and provided D&D with an opportunity to provide an undertaking to resolve his concern. D&D declined to provide the undertaking sought by the Deputy President. The Deputy President then issued the second decision, in which he dismissed D&D’s application for approval of the Agreement on the basis that he was not satisfied that the Agreement would result in the employees covered by the Agreement passing the better off overall test (BOOT) when compared to the Building Award, as required by s 186(2)(d) of the FW Act. The appeal is brought on the basis that the Deputy President’s non-satisfaction as to the BOOT was in error because it was founded on an incorrect construction of the clause 34.2(a) of the Building Award.

[2] The factual background may briefly be stated. As its name suggests, D&D is a traffic management company which provides its services to various clients in the civil construction industry. It has two depots, one in Sydney and the other in Wollongong. It employs a number of traffic controllers, all but one of whom are casually employed. The traffic controllers will typically attend for work at one of the depots, and join a team which travels by truck to the relevant worksite. The location of the work, and the precise duties to be performed, varies according to the requirements of the client.

[3] Employees are assigned work on either a permanent day shift or night shift. There is a regular five-day roster and employees are generally given at least 48 hours’ notice of when and where they are required to work a shift. Sometimes, but not always, the night shift employees will work at the same location as the preceding day shift employees. Typically, a roadworks project on a main road is only conducted at night and thus only requires the attendance of traffic controllers on night shift.

[4] It is not in contest that the Building Award covers the work performed by D&D’s traffic controllers, and that this work is performed in the civil construction sector. A pre-existing enterprise agreement, the D&D Traffic Management & Other Work – Enterprise Agreement 2015, has at all relevant times applied to D&D and its employed traffic controllers. The Agreement was made on 4 November 2020, and the application for its approval was lodged with the Commission on 17 November 2020. The Australian Workers’ Union (AWU) opposed the approval of the Agreement on a number of bases, including that it did not pass the BOOT.

Relevant provisions of the Building Award and the Agreement

[5] Clause 34.2(a) of the Building Award, as it was at the time that the application for approval of the Agreement was lodged, defined “shiftwork” for the purpose of the civil construction sector as follows:

shiftwork means any system of work in which operations are being continued by the employment of a group of employees upon work on which another group had been engaged previously

[6] Clause 34.2(a) also defined the different shifts that may be worked in the civil construction sector:

day shift means any shift starting on or after 6.00 am and before 10.00 am

afternoon shift means any shift starting at or after 10.00 am and before 8.00 pm

night shift means any shift starting at or after 8.00 pm and before 6.00 am

rostered shift means a shift of which the employee concerned has had at least 48 hours notice.

[7] Clause 34.2(b) provided, relevantly, that shifts must be worked on a rotating basis unless all the employees concerned agree otherwise. Clause 34.2(n) provided, in substance, that employees working permanent night shifts must be paid a shift loading of 30 percent, unless they do so at their own request. Clauses 34.2(k) and 37.5 respectively provide for higher penalties on Saturdays (50 percent) and Sundays (100 percent).

[8] Clause 33.1 relevantly provided that, except as provided for in clause 34, the ordinary hours of work are 38 per week, averaged over a 20-day four-week cycle, and must be worked between 7.00am and 6.00pm Monday to Friday. Clause 33.4 provided that the daily ordinary hours of work of a casual employee shall not exceed 8 hours. Clause 36.2 provided:

36.2 All time worked beyond an employee’s ordinary time of work (inclusive of time worked for accrual purposes as prescribed in clauses 33—Ordinary hours of work and 34—Shiftwork), Monday to Friday, must be paid for at the rate of time and a half for the first two hours and at double time thereafter.

[9] It was common ground between the parties that the span of hours specified in clause 33.1 applied to casual employees by virtue of clause 14.2, so that any work performed by casual employees after 6.00pm Monday to Friday would attract the overtime rates prescribed by clause 36.2 unless it fell within the “shiftwork” definition in clause 34.2(a).

[10] Clause 8 of the Agreement provides:

8. HOURS OF WORK, OVERTIME AND SHIFT LOADINGS

a. Ordinary hours of work

i. The ordinary hours for all employees under this agreement shall be 38 hours per week to be worked from Monday to Friday between the hours of 6am and 6pm with a maximum of 8 ordinary hours per day.

…

b. Overtime

i. All employees shall be paid overtime for time worked in excess of their 8 ordinary hours set out in sub-clause 8.a.i. of this Agreement at the rates specified in Annexure A.

Casual employees will be paid overtime in line with clause 8 a iii above

ii. Traffic Management employees on Night Shift who have not received notice of their shift 48 hours prior to starting work will be paid overtime at the applicable rate in Annexure A.

Such payment shall not be made to employees identified as permanent night shift workers or casual employees where:

(a) they are notified of a shift, but the location, start or finish time is altered

(b) the shift is cancelled & the employee is allocated to an alternative shift

(c) they are a casual employee & replace a person who was originally allocated that shift

Reasonable Overtime

iii. Subject to this clause, the company may require an employee to work reasonable overtime.

iv. An employee may refuse to work overtime in circumstances where the working of such overtime would result in the employee working hours which are unreasonable.

v. For the purposes of this clause, what is unreasonable or otherwise will be determined having regard to:

Any risk to employee health and safety.

The employee's personal circumstances including any family and career responsibilities.

The needs of the workplace or enterprise.

The notice (if any) given by the company of the overtime and by the employee of his / her intention to refuse it; and

Any other reasonable matter.

c. Night shift

Any employee who works on shifts starting on or after 6 pm and finishing on or before 6am, Monday to Saturday, shall be classified as a night shift for the purpose of this clause and shall be paid at the rate specified in Annexure A

All hours worked in excess of 8 hours on such shifts shall be paid at the applicable double time rates specified in Annexure A.

Night shift workers shall be entitled to Crib breaks in accordance with clause 12 of this Agreement.

Where five consecutive night shifts are not worked across the business, then employees on Traffic Management work will be paid the applicable time & a half rate, specified in Annexure A for all ordinary time during such shift.

…

[11] Schedule A of the Agreement sets out the hourly rates of pay for, relevantly, traffic controllers. It can be calculated from the specified hourly rates that the rate for traffic controllers working “night span” is 30 percent higher than for “day span” (with the casual loading calculated cumulatively in the case of casual traffic controllers). Schedule A also provides for overtime rates.

The proceedings before the Deputy President and the decisions

[12] Before the Deputy President, the AWU contended that the Agreement did not pass the BOOT for a number of reasons including, relevantly, that clause 8(c) of the Agreement allowed work after 6.00pm which was not “shiftwork” within the meaning of clause 34.2(a) of the Building Award to nonetheless be paid as if it was shiftwork with a 30 percent loading applicable instead of the overtime penalty rates prescribed by clause 36.2 of the Building Award. It submitted that D&D should give an undertaking to ensure that where a site or project is not operating on a roster system with two consecutive (that is, defined) shifts, overtime is payable for all work undertaken outside the span of daily work. The AWU cited the decision of the Commission (Saunders DP) in Altus Traffic (NSW & Act) Enterprise Agreement 2019 3 (Altus) to support its position. D&D submitted in response that the nature of civil construction work covered by the Building Award is project-based, as traffic control work moves with civil projects as roads are closed, construction takes place on roads or bridges and other civil works. It submitted that nothing in the Building Award requires that shiftwork be carried out in a single location. D&D cited the decision of the Commission (Hampton C) in Retro Traffic Enterprise Agreement 20184 (Retro) to support its position.

[13] In the first decision, the Deputy President considered the reasoning and conclusions stated in Altus and Retro and stated the following conclusions:

“[29] In Metal Trades (Engineering) Board of Reference Appeal, Dethridge CJ considered a ruling that work commencing at 9.30am and finishing at 6.15pm was shift work and should be paid for at the appropriate shift work rate. In upholding the Appeal, Dethridge CJ observed:

“Ordinarily the idea of shift work connotes men working in relays; that is to say one man or relay or squad of men does a spell of work upon a process and upon that same process is immediately followed by another man or relay or squad of men doing a spell of work for something like a similar number of hours, but not necessarily for the same number. Nothing like that existed here. There was no shift of work from one man or squad to another successive man or squad.”

[30] The above observation is entirely consistent with the definition of shiftwork in Clause 34(2)(a) of the Award. As Deputy President Saunders found, the “operations” must be continued “by the employment of a group of employees upon work on which another group had been engaged previously” [emphasis added].

[31] I agree with, and adopt as correct for the disposition of the Application, the conclusions of Deputy President Saunders at paragraphs [26], [27], [28], [29] and [30] in Altus. I particularly note the example highlighted by Deputy President Saunders at paragraphs [28]. But for the localities mentioned, that is exactly the scenario that the Applicant presses should be allowed to apply in the matter at hand. That course of conduct, based on my conclusion as to the definition of shiftwork in the Award, would result in employees being not better off overall pursuant to the terms of the Agreement.

[32] Ultimately, the question before the Commission now is a narrow one. Does the meaning of “work” in the clause 34.2(a) definition include any work within an enterprise, regardless of how remote, or whether it is required to be work within the same jobsite or project.

[33] I do not consider that any of the submissions of the Applicant can support a different interpretation of the definition in Clause 34.2(a). The definition of shiftwork is clear and unambiguous. The text of clause 34.2 operates on an assumption that there will be a rotation of shifts unless agreed otherwise by employees. There cannot be a rotation of shifts across an entire enterprise that engages workers at various different worksites in different cities and regions.

[34] For the reasons given above, I am not satisfied that the Agreement, as amended by the existing undertakings referred to above, would result in the employees being better off overall due to the interpretation of Clause 34(2)(a) of the Award relied upon by the Applicant. Accordingly, I invite the Applicant to provide an undertaking, in the form of Undertaking 5 identified in Altus, to resolve my concern about employees not being better off overall.” [Footnotes omitted]

[14] The “Undertaking 5” in Altus referred to by the Deputy President was as follows:

“In respect of any work undertaken by employees in the civil construction sector as defined under the Building and Construction General On-site Award 2010 (BCG Award), the overtime provisions in clause 13.4 of the Agreement will apply to work that is not Shift Work. For the purposes of this undertaking, ‘Shift Work’ has the meaning given by the definition in clause 34.2(a) of the BCG Award, namely, any system of work in which operations are being continued by the employment of a group of employees upon work on which another group had been engaged previously.”

[15] The Deputy President went on to say that if an equivalent undertaking was provided by D&D, he would be satisfied that the requirements for approval of the Agreement in ss 186, 187, 188 and 190 of the FW Act have been met. 5

[16] D&D did not provide this undertaking. Instead, it sent correspondence to the Deputy President on 3 March 2021 which, omitting formal parts, stated:

“Thank you for extending the time for the Applicant to respond to your decision.

Having given careful consideration to the decision, and to the serious cost and other implications were the Applicant to make the further undertaking adverted to in your decision, the Applicant instructs me that it will not make that further undertaking. The Applicant also instructs me to indicate that it intends to appeal.”

[17] In the second decision, the Deputy President noted that D&D had declined to provide the requested undertaking, said that he was not satisfied that the Agreement would result in employees covered by the Agreement being better off overall, and dismissed the application for approval of the Agreement. 6

Appeal grounds and submissions

[18] In its notice of appeal, D&D advanced the following grounds of appeal:

In respect of the first decision:

(1) The Deputy President erred in following the reasoning of Saunders DP in Altus and determining that clause 34.2(a) of the Building Award requires work to be continued by a group of employees at the same jobsite or project and not across the totality of an employer’s operations in order to satisfy the definition of shiftwork [first decision at [31] and [33]].

(2) The Deputy President erred in incorrectly applying various textual and contextual considerations to the interpretation of clause 34.2(a) including those reflected in paragraphs [29] and [30] of Altus [first decision at [31]].

(3) The Deputy President erred in failing to apply the reasoning of the Hampton C in Retro which reflects the correct interpretation of clause 34.2(a) of the Building Award.

(4) The Deputy President erred in concluding that the Agreement as amended by the undertakings offered by the Applicant (including Undertaking 7) would not result in the employees being better off overall, due to the interpretation of clause 34.2(a) arrived at by the Deputy President at first instance (first decision at [34]).

(5) The Deputy President erred in concluding that a further undertaking in relation to shiftwork, in in the form of Undertaking 5 identified in Altus was required in order for the Agreement to meet the better off overall test (first decision at [34] and [39]).

In respect of the second decision:

(6) The Deputy President erred in concluding that the Agreement as amended by the undertakings offered by the Applicant (including Undertaking 7) would not result in the employees being better off overall due to the interpretation of clause 34.2(a) arrived at by the Deputy President at first instance (second decision at [3]).

(7) The Deputy President erred in concluding that a further undertaking in relation to shiftwork, in in the form of Undertaking 5 identified in Altus was required in order for the Agreement to meet the better off overall test (second decision at [2] – [3]).

[19] D&D submitted that permission to appeal should be granted because:

•  the decisions contain relevant errors and should not be allowed to stand;

•  the appeal raises important questions about the correct interpretation of clause 34.2(a) of the Building Award which have general application;

•  the correct interpretation of the clause 34.2(a) has not been the subject of consideration by a Full Bench of the Commission and would be beneficial given the civil construction industry is a significant industry with a large number of employers and employees;

•  the correct construction of the clause is an issue for which there have been divergent interpretations made by single members of the Commission and there is therefore uncertainty as to the correct interpretation of clause 34.2(a), creating compliance concerns and interpretation problems which impact the application of the BOOT in the context of enterprise agreement making; and

•  these matters enliven the public interest in that they raise issues of importance and general application, there is a diversity of decisions at first instance so that appellate guidance is required and the decisions at first instance manifest an injustice and the result is counter intuitive.

[20] In respect of the merits of the appeal, D&D contended that the Deputy President erred in his construction of clause 34.2(a) and in following the reasoning of Saunders DP. D&D submitted:

(1) The consideration of the plain and ordinary meaning of the words of the clause read as a whole and in context requires consideration of the genesis of the relevant term. The making of the Building Award arose from the Part 10A Award Modernisation Proceedings conducted under the Workplace Relations Act 1996 and the Award Modernisation request issued by the Minister. This request directed attention to the terms of pre-modernised awards which operated prior to the making of the modern award. Deputy President Saunders was in error to regard the statutory objects of the FW Act as a basis to exclude the broader reading of clause 34.2(a) of the Building Award, given it was drawn directly from the terms of a pre-modernised federal award with different statutory objects to those reflected in the FW Act.

(2) In Altus, Saunders DP was in error to rely on the terms clause 34.2(b)(i) as a textual indicator to support the construction that the “work on which another group has been engaged previously” within clause 34.2(a) required work at the same site or project. Clause 34.2(b)(i) contemplates agreement only of the “employees concerned”, that is, the employees concerned with a particular roster, which should not be conflated with the broader concept of a “system of work in which operations are being continued”. It was also incorrect to say the Building Award does not permit that shifts cannot be fixed without all employees agreeing. Additionally, the relevant obligation concerning the rotation of shifts absent agreement was a feature of the shiftwork provisions of the AWU Construction and Maintenance (Consolidated) Award 1989 prior to the introduction of the definition of shiftwork, and therefore it is of limited textual relevance to construing that definition.

(3) In Altus, Saunders DP applied an interpretation to the definition of shiftwork which was “not well suited to the civil construction sector in which… there are major projects as well as smaller works” and is highly problematic and leads to a strong inference that the interpretation is wrong given that it must be accepted that the genesis of the term is from an award solely concerned with regulating the conditions for the civil construction sector.

(4) The Deputy President below fell into error in the first decision in two respects. First, he failed to consider the historical context under which the definition of shiftwork was included in the Australian Workers Union Construction and Maintenance Award 1989 (AWU Award 1989), that is, as part of structural efficiency variations to the AWU Award 1989. Secondly, D&D contended that the Deputy President erred by concluding that the intersection of clause 34.2(a) and 34.2(b)(i) would require a rotation of “shifts across an enterprise that engages workers at various different worksites in different cities and regions”. While there may be a presumption as to rotating rosters, it submitted, this presumption is displaced by the agreement of “employees concerned”, which does not require the agreement of all employees but only those concerned with a particular roster. Further, the expansive operation of clause 34.2(b)(i) does not support the proposition that the rotation of shifts must operate within a particular worksite or project in order to have the term operate sensibly.

(5) The correct interpretation of clause 34.2(a) is reflected in Retro, namely that employees may be shiftworkers as defined if the employees are working under a system of work where work is being continued by a group of workers who may be shift or day workers, even if the work is being performed at a different worksite or project. The nature of the civil construction sector is that it includes both major projects and smaller works, each of which are likely to involve multiple employers who come and go from the project as the various stages are undertaken, and these employers are likely to engage employees in employment across a variety of projects at the one time. Retro was properly guided by the relevant features of the industry and the context and purpose of the provision, and this interpretation of clause 34.2(a) of the Building Award should be preferred.

[21] D&D submitted that if permission to appeal was granted and the appeal upheld, we should approve the Agreement on the basis of the undertakings it had previously provided in relation to other issues.

Consideration

[22] Permission to appeal is sought in this case on the basis that the appeal raises a question of general application concerning the proper construction of the definition of “shiftwork” in clause 34.2(a) of the Building Award (replicated in clause 17.2(a) of the current Building and Construction General On-site Award 2020). Although we record that we consider the Deputy President was correct in his reasoning and conclusion in paragraphs [29]-[34] of the first decision, including in his approval and adoption of paragraphs [26]-[30] of the decision of Saunders DP in Altus, the appeal does not in our view properly give rise to the question concerning the construction of clause 34.2(a) in the way contended for by D&D such as to justify the grant of permission to appeal. We have reached this view for two related reasons.

[23] First, the submissions of D&D focus upon whether the work rostering system which it says it currently operates in practice falls within the definition of “shiftwork” in clause 34.2(a) of the Building Award. However, that is not, ultimately, the correct question. The comparison required under s 193(1) is between the application of the terms of the relevant enterprise agreement to current and prospective employees compared to the application of the relevant award to the same employees. In the immediate context, this means that the question is whether clause 8(c) of the Agreement allows work after 6.00pm (which is not “shiftwork” within the meaning of clause 34.2(a) of the Building Award) to be paid on the basis of a 30 percent shift loading instead of the overtime penalty rates prescribed by clause 36.2 of the Building Award. If so, then given that the base rates prescribed by the Agreement were only very marginally above those in the Building Award, this would necessarily be a major detriment under the Agreement for night workers which would cause it to fail the BOOT.

[24] The answer to this question was indubitably “yes”. The Building Award definition of “shiftwork” in clause 34.2(a) required the continuation of operations by a group of employees upon work which another group of employees had engaged in previously. This connotes, at the least, a two-shift system of operations. However, the “night shift” definition in clause 8(c) of the Agreement does not contain this requirement for the continuation of work at all. Rather, it simply provides that any work shift starting on or after 6.00pm and finishing on or before 6.00am is a night shift. Thus, it would permit a “stand-alone” night shift worked within those temporal parameters to be paid at the 30 percent shift loading even if there is no preceding shift worked anywhere in the enterprise in question. A shift of this nature worked in respect of civil construction Monday-Friday would not fall within the Building Award definition of “shiftwork” and would be payable at the higher overtime penalty rates prescribed by clause 36.2 of the Building Award. It is not necessary to engage in any exercise in the construction of 34.2(a) in order to reach this conclusion. The Agreement did not on any view pass the BOOT for this reason alone.

[25] Second, the Deputy President said in the first decision that he would approve the Agreement if D&D gave the “Undertaking 5” referred to in the Altus decision. That undertaking, which we have set out above, would simply displace the definition of shiftwork in clause 8(c) of the Agreement with that in clause 34.2(a) of the Building Award. Giving this undertaking would have rectified the identified BOOT deficiency and allowed D&D to have its Agreement approved. It would also have allowed D&D to operate a shift work system consistent with clause 34.2(a) of the Building Award. D&D refused to give the undertaking, thus indicating that it was not prepared to have in its Agreement a shiftwork definition which was consistent with that in the Building Award. In that circumstance, we see no call to grant permission to appeal to engage in the exercise of construing clause 34.2(a) of the Building Award.

[26] We do not consider that the grant of permission to appeal would be in the public interest or is otherwise justified on discretionary grounds. Accordingly, permission to appeal is refused.

VICE PRESIDENT

Appearances:

Mr D Murray on behalf of the Appellant.

Mr A Sage on behalf of the First Respondent.

Hearing details:

2021.

Sydney:

4 June.

Final written submissions:

Appellant – 18 June 2021.

First Respondent – 17 June 2021.

Printed by authority of the Commonwealth Government Printer

<PR731762>

 1   [2021] FWC 1017

 2   [2021] FWC 1287

 3   [2019] FWCA 5941

 4   [2019] FWC 2062

 5   [2021] FWC 1017 at [39]

 6   [2021] FWC 1287 at [3]