DECISION

Fair Work Act 2009
s.604 - Appeal of decisions

EnergyAustralia Yallourn Pty Ltd
v
Construction, Forestry, Maritime, Mining and Energy Union
(C2021/4498)

Appeal against decision [2021] FWC 3681 of Deputy President Mansini at Melbourne on 20 July 2021 in matter numbers AG2020/1734 and C2020/4793.

Introduction and background

[1] EnergyAustralia Yallourn Pty Ltd (Yallourn) has appealed a decision issued by Deputy President Mansini published on 20 July 2021 1 which determined two applications: first, an application made by Yallourn for the variation of clause 13.2 of the EnergyAustralia Yallourn Enterprise Agreement 20202 (2020 Agreement) pursuant to s 217 of the Fair Work Act 2009 (FW Act) and, second, an application made by the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) for the Commission to deal with a dispute concerning clause 13.2 of the 2020 Agreement pursuant to the dispute resolution procedure in clause 29 of the Agreement and s 739 of the FW Act. Both matters had an underlying common issue, being the proper construction of clause 13.2 of the 2020 Agreement. The Deputy President determined that Yallourn’s application should be dismissed, and determined the question of construction arising from the CFMMEU’s application in the CFMMEU’s favour. Yallourn has appealed each such determination by separate notices of appeal. It is not in dispute that permission is required for each appeal.

[2] Clause 13 of the 2020 Agreement concerns public holidays. Clause 13.1 provides:

13.1 GENERAL

An Employee shall be entitled to the following as public holidays without loss of pay:

New Year’s Day, Australia Day, Good Friday, Easter Saturday, Easter Monday, Labour Day, Anzac Day, Queen’s Birthday, Melbourne Cup Day, Christmas Day, Boxing Day and any additional public holidays gazetted by the State or Federal governments.

[3] Clause 13.2, which as stated was the subject matter of the two applications before the Deputy President, provides:

13.2 SUBSTITUTE DAYS

For day work Employees only, a substitute day off will be applied when a public holiday occurs on a weekend. The substitute day will normally be observed on the day declared in the Government Gazette or as otherwise agreed by the Parties.

In the case of shift work Employees, public holidays will be observed on the traditional date they occur, unless they happen to fall on another public holiday, in which case a substitute day will be observed on the following day unless otherwise agreed by the Parties.

[4] Clause 13.3 is entitled “Public Holidays – Day Work Employee”, and for relevant purposes provides in the first sentence that day work employees shall be entitled to time off without loss of pay “for all public holidays (including substitute days in lieu thereof) created in accordance with clause 13.1”. Clause 13.4 is concerned with public holidays for shift work employees and, relevantly, clause 13.4(a) provides:

In respect to public holidays created under sub-clause 13.1, shift work Employees shall be entitled to the following in addition to their Normal Rate of Pay:

(a) Shift work Employees who are ‘rostered off’ on a public holiday shall, at the Employee’s discretion be entitled to either:

i. an annual leave credit of eight hours; or

ii. payment of eight hours at their Normal Rate of Pay.

[5] Clause 10.2 provides that day-work employees are to work a 9-day fortnight, Monday to Friday. Clause 10.3.1 provides for the following types of shift patterns for shift workers:

The roster cycle varies according to the type of shift and working arrangements employed in each workgroup. Generally there are three types of shift work employed at the Company, twelve hour day and night shifts that cover the seven days of the week (known locally as 2x12 shift), twelve hour day shifts that cover the seven days of the week (known locally as 1x12 shift) and a pattern of 10-hour day shifts on weekdays and 6-hour day shifts on weekends (known locally as 1x7 shift).

[6] Yallourn operates a coal mine and power station in Victoria, and the 2020 Agreement applies to its employees within the classifications in the agreement. So far as the CFMMEU is concerned, it represents the industrial interests of maintenance employees, who are day workers, and operators, who are shift workers.

[7] The dispute which gave rise to the proceedings before the Deputy President concerned the provision of substitute days off for day workers pursuant to the first paragraph of clause 13.2. The dispute first arose in April 2020, at a time when the 2020 Agreement had been “made” under the FW Act but was not yet in effect and the enterprise agreement which preceded it, the EnergyAustralia Yallourn Enterprise Agreement 2017 3 (2017 Agreement), still operated. The 2017 Agreement contained a provision in the same terms as clause 13.2 of the 2020 Agreement. In 2020, Anzac Day fell on a Saturday, and the day work employees did not receive any substitute public holiday. As a result, the CFMMEU raised on behalf of its members a complaint that Yallourn had failed to comply with the 2017 Agreement in that it had not provided a substitute public holiday for Anzac Day. The 2020 Agreement took effect on 15 May 2020 and, on 19 May 2020, the CFMMEU filed an application for the Commission to resolve the dispute under the 2017 Agreement. The CFMMEU withdrew this application on 11 June 2020 but, on the same day, a CFMMEU official again complained to Yallourn that it was not complying with clause 13.2 of the 2020 Agreement. On 18 June 2020, Yallourn filed its application pursuant to s 217, which sought that clause 13.2 be varied to add the additional words, underlined, as follows:

13.2 SUBSTITUTE DAYS

For day work Employees only, a substitute day off will be applied when a public holiday occurs on a weekend if a substitute day has been declared in the Government Gazette. The substitute day will normally be observed on the day declared in the Government Gazette or as otherwise agreed by the Parties.

[8] On 19 June 2020, the CFMMEU filed its application pursuant to s 739. This application sought that the Commission determine the following question:

For the purposes of clause 13.2 of the EnergyAustralia Yallourn Enterprise Agreement 2020, in what circumstances is a day work Employee entitled to a substitute day off when a public holiday occurs on a weekend?

The decision

[9] In her decision, the Deputy President first dealt at length with the evidence concerning the genesis of clause 13.2, which first appeared in the EnergyAustralia Yallourn Enterprise Agreement 2013 (2013 Agreement) 4 and was then reproduced in the 2017 Agreement and the 2020 Agreement. This evidence mainly concerned the negotiations for the 2013 Agreement.5 The Deputy President also referred to the statutory context in respect of public holidays provided by s 115 of the FW Act, the recent history of the operation of the Public Holidays Act 1993 (Vic) (PH Act) and the industrial context provided by the predecessor instruments to the 2013 Agreement and the Loy Yang B Enterprise Agreement 2018.6 

[10] The Deputy President then determined that, as a matter of procedure, she would determine Yallourn’s application prior to determining the CFMMEU’s application. 7 In doing so, the Deputy President first found that there was no textual ambiguity or uncertainty in clause 13.2:

“[63] On its face, the drafting of the disputed term at clause 13.2 – SUBSTITUTE DAYS is clear. The first sentence plainly provides that, For day work Employees only, a substituted day off will be applied when a public holiday occurs on a weekend and it is these words that on their face establish a right or entitlement to a substituted day for a public holiday that occurs on a weekend, with no express qualification related to government gazettal. The second sentence provides for when the substitute day will be observed – that is, The substitute day will normally be observed on the day declared in the Government Gazette or otherwise as agreed by the Parties. The second sentence expressly contemplates observance of a substitute day in an alternate circumstance to the day declared in the Government Gazette – that is, it will “otherwise” be observed as agreed by the defined “Parties” (the Company and the Unions). There is nothing in the plain text by which to read the clause down such that a substituted day will only be applied when a public holiday occurs on a weekend and is declared by Government Gazette. The remainder of clause 13.2 provides for shift work Employees with whom these applications are not concerned.”

[11] The Deputy President next considered whether surrounding circumstances, to the extent admissible, assisted in identifying ambiguity or uncertainty. The Deputy President first considered the statutory context, and said:

“[65] …In my view, the history of the variable or inconstant approach to gazetting of substituted days for certain public holidays together with the objective fact that the day work Employees’ roster is only ever worked on Monday to Friday (and therefore does not ordinarily attract the benefit of a public holiday that occurs on a weekend) is context telling of a reason why day work Employees (or their representative) or an employer could be motivated to seek to secure a particular form of words (whether as an additional benefit or ancillary term) in an enterprise agreement. Further the Agreement clearly provides that it supplements the National Employment Standards and there is nothing in this context to suggest that an additional benefit was not intended to be conferred by clause 13.2 of the Agreement. I do not consider this context to otherwise be of assistance to the present task.”

[12] The Deputy President did not consider the history of public holiday entitlements prior to the 2013 Agreement to be of assistance. 8 In relation to the negotiations for the 2013 Agreement, the Deputy President reviewed the evidence and said:

“[74] At its highest, I accept the evidence indicates that the Company did not mean what clause 13.2 plainly provides. This intention does not, however, establish the mutual intention of the relevant parties…

[75] The evidence of the views of a handful of participants in negotiations for the 2013 Agreement, since replaced by 2 subsequent agreements, even where they appear in parts to be in common, do not establish a common intention of the employees and the employer to the Agreement. To this end, the Company’s position is not assisted by the absence of any explanation to employees about the provision in question. …In my view, the absence of such explanation does not tell in favour of a finding that employees understood, or could reasonably have understood, that clause 13.2 of the 2013 Agreement (and the subsequent agreements) meant something other than what the plain words provide.”

[13] The Deputy President said that the most relevant objective facts were those which pertained directly to the 2020 Agreement and that it was not contentious that clause 13 and the matter of substituted public holidays were not raised during negotiations for the 2020 Agreement. 9 The Deputy President accepted that evidence of subsequent conduct was admissible to determine whether an ambiguity or uncertainty exists and found that Yallourn has not since the commencement of the 2013 Agreement applied a substitute day for day work employees for any public holiday that falls on a weekend and that no employee had complained about this prior to the complaint made concerning Anzac Day in 2020. However, the Deputy President did not accept that the absence of complaint amounted to a common understanding but rather was best characterised as common inadvertence in that it was likely no one had thought about the issue.10

[14] In relation to Yallourn’s application, the Deputy President concluded that the words of clause 13.2 of the 2020 Agreement were clear, no ambiguity could be identified either from the text or the admissible surrounding circumstances, nor was the disputed provision uncertain. She also did not consider that the rival contentions of the parties gave rise to ambiguity or uncertainty or that there was an arguable case for Yallourn’s contention to be made out. 11 The Deputy President went on to say that, even if the jurisdictional threshold in s 217 of ambiguity or uncertainty were met, she would not exercise her discretion to vary the 2020 Agreement because to do so would be to substantively and fundamentally alter the language of the agreement. On this basis, Yallourn’s application was dismissed.12

[15] The Deputy President then turned to the CFMMEU’s application and, again, determined that the meaning of clause 13.2 was plain on its face, and said:

“[84] … The first paragraph of clause 13.2 of the Agreement does two things:

•  In the first sentence, it provides an entitlement under the Agreement that, For day work Employees only a substitute day off will be applied when a public holiday occurs on a weekend.

•  In the second sentence, it provides for when the substitute day will be observed. That is, The substitute day will normally be observed on the day declared in the Government Gazette or as otherwise agreed by the Parties.

[85] In the absence of any express definition, the reference to “public holiday” in the first paragraph of clause 13.2 is plainly to be understood by reference to that which immediately precedes it, at clause 13.1, which specifies the public holidays that an Employee (not limited to day worker or shift worker) shall be entitled to under the Agreement, without loss of pay, as New Year’s Day, Australia Day, Good Friday, Easter Saturday, Easter Monday, Labour Day, Anzac Day, Queen’s Birthday, Melbourne Cup Day, Christmas Day, Boxing Day and any additional public holidays gazetted by the State or Federal governments. Beyond the plain and express words of clause 13.2, which refers to a substitute day off being applied when a “public holiday” as defined at clause 13.1 occurs on a weekend, there is no other limitation on or circumstance applicable to the days when a substitute day will be applied. Clause 13.3 of the Agreement provides an entitlement for day work Employees to time off without loss of pay for all public holidays (including substitute days in lieu thereof) created in accordance with clause 13.1. The bracketed text clarifies the inclusion of substitute days in lieu of all public holidays and all public holidays are created in accordance with clause 13.1 of which the substitute days conferred at 13.2 are plainly in lieu. I do not find support in the surrounding provisions of the Agreement or the admissible surrounding circumstances for any finding to the contrary.”

[16] On the above basis, the Deputy President answered the question posed for determination in the CFMMEU’s application as follows: “for the purposes of clause 13.2 of the Agreement, day work Employees are entitled to the application of a substitute day when a public holiday as defined in clause 13.1 occurs on a weekend”. 13

Appeal grounds and submissions

[17] Yallourn contends, in its notice of appeal against the Deputy President’s dismissal of its s 217 application, that the decision was in error because the Deputy President erred by failing to find that clause 13.2 of the 2020 Agreement is ambiguous or uncertain within the meaning of s 217 of the FW Act, by failing to find that the mutual intention of Yallourn and its employees was that a substitute holiday would only be provided to day workers when a substitute holiday was provided for under the PH Act, and by finding that she would not exercise the Commission’s discretion under s 217 to vary the Agreement even if the requisite ambiguity or uncertainty existed. In its notice of appeal against the Deputy President’s determination of the CFMMEU’s s 739 application, Yallourn contends that the Deputy President erred in her construction of clause 13.2 by not finding that the provision’s effect is that day workers are only entitled to a substitute day when a public holiday (as defined by clause 13.1) occurs on a weekend if a substitute day for that public holiday is declared by the Victorian Government or one otherwise applies under Victorian public holidays legislation.

[18] In its submissions with respect to the appeals, Yallourn submitted that the language of clause 13.2, the history of how the provision was originally agreed in bargaining for the 2013 Agreement, and the conduct of the parties since the 2013 Agreement took effect but prior to the making of the 2020 Agreement, demonstrated at least that there was an arguable case that “substitute day” under clause 13.2 means one that has been gazetted under the PH Act and that, accordingly, there was the requisite ambiguity for the purpose of s 217. Additionally, it was submitted, uncertainty arises for the purpose of s 217 because:

● Easter Saturday and Easter Sunday always occur on a weekend, without any substitute day under the PH Act, and day workers only work Monday to Friday, and past practice was not to provide a substitute to day workers;

● ANZAC Day occurs on a weekend twice every seven years, traditionally the Victorian Government does not gazette a substitute day, clause 13.2 does not expressly deal with what happens for day workers, and past practice was only to provide a substitute day to day workers when a substitute day was gazetted; and

● the CFMMEU’s current construction (which it has adopted only since after the 2020 Agreement was made) creates uncertainty as to how the words in clause 13.2 “as otherwise agreed by the Parties” are to be applied where there is no substitute day gazetted, and no agreement is reached to provide a substitute day.

[19] Yallourn submitted that the discretion in s 217 ought to have been exercised to make the variation to clause 13.2 which it sought in order to give effect to the parties’ mutual intention at the time the 2020 Agreement was made. Not to make the variation would be to leave in place an ambiguity and uncertainty and produce an unjust result.

[20] As to the proper construction of clause 13.2, Yallourn submitted that the phrase “substitute day” took its meaning from s 115(2) of the FW Act, which provides that a day that is, under a law of a State or Territory, substituted for a day that would otherwise be a public holiday, is a public holiday, and s 8 of the PH Act, which provides a mechanism for the Victorian Government to declare by notice published in the Government Gazette that a public holiday listed in s 6 of the PH Act is not a public holiday and that a different day is substituted in its place. Thus, it was submitted, clause 13.2 concerned a day declared by the Victorian Government to be a substitute holiday under the PH Act. Yallourn submitted that clause 13.2 is intended to distinguish between (on the one hand) the position of shift workers (who work a continuous 24/7 roster), who are paid public holiday rates for the traditional day (e.g. 25 December) regardless of any substitute days under the PH Act, and (on the other hand) day workers who receive substitute days under the PH Act unless some other substitute day is agreed. This interpretation is consistent with the circumstances pertaining to the negotiation of the 2013 Agreement and the conduct of the parties since this time and, it was submitted, the Deputy President erred in construing clause 13.2 otherwise.

[21] Yallourn submitted that we should grant permission to appeal, quash the determinations made by the Deputy President with respect to both applications, and redetermine the applications ourselves consistent with its submissions.

[22] The CFMMEU submitted that the decision was not attended by appealable error with respect to its determination of either application. In respect of the appeal concerning the dismissal of Yallourn’s s 217 application, the CFMMEU submitted that Yallourn failed to adduce any evidence establishing that the mutual intention of Yallourn and its employees was that a substitute holiday would only be provided to day workers when a substituted holiday was provided under the PH Act. Whilst Yallourn had adduced evidence about events in bargaining meetings between it and officials of unions which were bargaining representatives, those meetings did not involve the employees and was therefore not evidence of mutual intention, as the Deputy President recognised. It was submitted that, once Yallourn’s claimed mutual intention is rejected, Yallourn’s submissions in respect of ambiguity and uncertainty are extremely weak, since clause 13.2 is expressed in plain terms and Yallourn’s construction of the provision seeks to read in a proviso for which there is no arguable case. The “traditional industrial approach” derived from other industrial instruments was not permissible as an aid to the construction of the agreement provision which was before the Deputy President. The CFMMEU submitted that Yallourn’s grounds of appeal concerning the Deputy President’s conclusion that she would not exercise her discretion to vary the 2020 Agreement even if ambiguity or uncertainty was established were founded on its contention concerning mutual intention, and that contention should be rejected for the reasons earlier submitted.

[23] In relation to the appeal against the determination of the s 739 application, the CFMMEU submitted that the evidence of surrounding circumstances relied upon by Yallourn to overcome the “insurmountable difficulties” for its construction in the text of clause 13.2 should not be taken into account because it did not concern matters which would be notorious or known to the employees bound by the 2020 Agreement and in any event could not be used to contradict the plain meaning of clause 13.2. As to the text of clause 13.2, the CFMMEU submitted:

● clause 13.2 operates with respect to “when a public holiday occurs on a weekend”, and on its ordinary meaning this cannot be construed as containing the proviso or limitation that a substitute day has been declared in the Government Gazette in respect of that public holiday;

● as the Deputy President found, the bracketed reference in clause 13.3 to “substitute days in lieu thereof” fortifies the inclusion that such substitute days operate with respect to all public holidays; and

● Yallourn’s construction has the significant problem that it would render the first sentence of clause 13.2 otiose since, if the provision is limited to those public holidays in respect of which a substitute day has been declared the sentence is simply not necessary because day work employees would automatically receive the benefit of the public holiday.

[24] The CFMMEU submitted that permission to appeal should be refused or, alternatively, that the appeals should be dismissed.

Consideration

[25] It is convenient to deal with Yallourn’s appeal against the Deputy President’s determination of the CFMMEU’s s 739 application first. We grant permission to appeal because we consider that the Deputy President’s decision is attended with sufficient doubt such as to warrant appellate reconsideration. That doubt arises from three matters.

[26] First, the decision does not address the meaning of the expression “substitute day off” in clause 13.2. Both the question posed for determination in the CFMMEU’s application, and the answer to that question given by the Deputy President, proceed on the implicit premise that “substitute day off” simply means a day off work in substitution for any public holiday falling on a weekend. However, in the case of day workers, it is inapt to describe a day off work as being provided as a “substitute” for a public holiday falling on a weekend, since a day worker obviously cannot have a day off work in respect of such a public holiday. This points to the need to pay closer attention to the intended meaning of “substitute day off”.

[27] Second, the decision also does not address the use of the word “applied” in the first sentence of clause 13.2 in connection with “substitute day off”. The relevant meaning of “apply” is “to bring to bear; put into practical operation, as a principle, law, rule, etc.”, 14 and its use in clause 13.2 is more apt to describe the operation of an exteriorly-derived concept rather than the establishment of a stand-alone entitlement.

[28] Third, as submitted by Yallourn, the construction of clause 13.2 advanced by the CFMMEU and preferred by the Deputy President leads to an insoluble problem in the second sentence of clause 13.2. It is clear that, under this construction, the first sentence of clause 13.2 establishes an entitlement to a “substitute day off” in respect of public holidays falling on weekends for which there may not be, or never will be, any alternative day “declared in the Government Gazette”. Easter Saturday is the most obvious example of this. However, the second sentence of the clause provides, in respect of this putative entitlement, that the day on which the “substitute day off” is normally to be observed will be “the day declared in the Government Gazette or as otherwise agreed by the Parties”. If the “substitute day off” is not declared in the Government Gazette, and the day in which it is to be taken is not otherwise “agreed by the Parties”, the clause provides no means by which the relevant day is to be determined. The “Parties” are defined in clause 1 to mean Yallourn and the five unions identified in clause 2(b) (of which the CFMMEU is one), so the proposition that the requisite six-way agreement may not be reached is not implausible or merely hypothetical.

[29] The conundrum described points to the existence of an alternative approach to the construction of clause 13.2. The way the phrase “the day declared in the Government Gazette” is used in the second sentence of the clause in relation to the “substitute day” strongly suggests that the “substitute day” will necessarily be the subject of a declaration in the Government Gazette; indeed, it would take a strained reading of the sentence to understand it as contemplating that there may not be such a declaration in respect of a “substitute day”. If a declaration in the Government Gazette is a presumed incident or characteristic of any “substitute day” with which clause 13.2 is concerned, then the problem in the operation of the second sentence earlier identified is resolved: if there is no agreement as to an alternative day, the default will be that the “substitute day” is taken on the gazetted date. Further, the premise of a declaration in the Government Gazette would obviously bear upon the intended meaning of “substitute day off” and “applied” in the first sentence of clause 13.2.

[30] These matters direct attention to the statutory context relevant to public holiday entitlements at the time the 2020 Agreement was made. Because the 2020 Agreement applies to an enterprise located in Victoria, the PH Act is of obvious relevance in the first instance. Section 6 of the PH Act identifies 13 days as being public holidays in each year: New Year’s Day, Australia Day (26 January or on the following Monday when this date falls on a Saturday or Sunday), Labour Day, Good Friday, Easter Saturday, Easter Sunday, Easter Monday, Anzac Day, Queen’s Birthday, AFL Grand Final, Melbourne Cup Day, Christmas Day and Boxing Day. In addition, there are additional public holidays prescribed by s 6 that are contingent upon New Year’s Day, Christmas Day or Boxing Day falling on a Saturday or Sunday. Section 7 provides that the relevant Minister may, by notice published in the Government Gazette, appoint additional days or half-days as public holidays in all or part of the State and/or as referable to all or specified classes of persons or bodies.

[31] Section 8 of the PH Act provides:

8 Substituted public holidays

(1) Subject to section 8A, the Minister, by notice published in the Government Gazette, may—

(a) declare that a day appointed—

(i) as a public holiday under section 6; or

(ii) as a public holiday or public half-holiday under section 7(1)(a); or

(iii) as a public holiday or public half-holiday under this subsection—

is not in a specified year such a holiday; and

(b)     appoint—

(i) in the case of a public holiday, another day or 2 half-days;

(ii) in the case of a public half-holiday, another half-day or day;

(iii) in the case of 2 public half-holidays, another day—

as a public holiday or public half-holiday in that year.

(2) A notice under subsection (1) may be expressed so as to apply—

(a) throughout the whole of the State or in a specified part of the State; or

(b) to all persons to whom and bodies to which this Act applies or to a specified class of person or body; or

(c) as specified in both paragraphs (a) and (b).

(3) The day, half-day or 2 half-days appointed under subsection (1) replaces or replace the public holiday, public half-holiday or public half-holidays for which the day, half-day or 2 half-days was or were substituted.

[32] Section 8 empowers the Minister to appoint, in a specified year, a day as a public holiday instead of a public holiday prescribed under s 6 or an additional public holiday appointed under s 7. Thus, while s 7 is concerned with the declaration of additional public holidays, s 8 is concerned with the substitution of public holidays. Two aspects of s 8 are noteworthy; first, the section is entitled “Substituted public holidays” and s 8(3) refers to public holidays being “substituted” and, second, the mechanism by which the Minister appoints a substituted public holiday is by a notice published in the Government Gazette.

[33] Division 10 of Pt 2-2 of the FW Act establishes a national employment standard (NES) with respect to public holidays that operates in conjunction with State and Territory public holidays legislation, including the PH Act. Section 114 provides for an entitlement for an employee to be absent from work on a public holiday, subject to the right of an employer to make a reasonable request for the employee to work on the public holiday. Section 116 provides for an entitlement for an employee to be paid if absent from ordinary hours of work on a public holiday. Section 115 defines what a public holiday is for the purposes of these provisions. The section relevantly provides as follows:

115 Meaning of public holiday

The public holidays

(1)  The following are public holidays:

(a)  each of these days:

(i)  1 January (New Year's Day);

(ii)  26 January (Australia Day);

(iii)  Good Friday;

(iv)  Easter Monday;

(v)  25 April (Anzac Day);

(vi)  the Queen's birthday holiday (on the day on which it is celebrated in a State or Territory or a region of a State or Territory);

(vii)  25 December (Christmas Day);

(viii)  26 December (Boxing Day);

(b)  any other day, or part-day, declared or prescribed by or under a law of a State or Territory to be observed generally within the State or Territory, or a region of the State or Territory, as a public holiday, other than a day or part-day, or a kind of day or part-day, that is excluded by the regulations from counting as a public holiday.

Substituted public holidays under State or Territory laws

(2)  If, under (or in accordance with a procedure under) a law of a State or Territory, a day or part-day is substituted for a day or part-day that would otherwise be a public holiday because of subsection (1), then the substituted day or part-day is the public holiday.

Substituted public holidays under modern awards and enterprise agreements

(3)  A modern award or enterprise agreement may include terms providing for an employer and employee to agree on the substitution of a day or part-day for a day or part-day that would otherwise be a public holiday because of subsection (1) or (2).

. . .

Note: This Act does not exclude State and Territory laws that deal with the declaration, prescription or substitution of public holidays, but it does exclude State and Territory laws that relate to the rights and obligations of an employee or employer in relation to public holidays (see paragraph 27(2)(j)).

[34] The following observations may be made about the effect of s 115 specifically in respect of Victoria:

(1) Paragraphs (a) and (b) of subsection (1), taken together, render the public holidays established by s 6 of the PH Act as public holidays for the purpose of the NES in the FW Act. Easter Saturday, for example, which is prescribed as a public holiday in s 6 of the PH Act, is picked up by paragraph (b) even though it is not specified as one of the named public holidays in paragraph (a). Paragraph (b) also picks up any additional public holidays prescribed under s 7 of the PH Act.

(2) Subsection (2) renders any substituted public holiday declared by the Minister in a notice published in the Government Gazette under s 8 of the PH Act as a public holiday for the purpose of the NES.

[35] More broadly, it may be observed that s 115(2) incorporates for the purpose of the NES the concept of “Substituted public holidays” declared under a law of a State or Territory. This recognises that State and Territory public holidays statutes in most cases have a provision equivalent to s 8 of the PH Act. 15 The statutory note to the section refers to s 27(2)(j), which provides that State or Territory laws that deal with, inter alia, the “substitution” of public holidays are not excluded by the FW Act.

[36] Section 55(1) of the FW Act provides that, relevantly, an enterprise agreement must not “exclude” any provision of the NES. Section 55(2)(a) permits an enterprise agreement to include any terms permitted to be included by a provision of Pt 2-2; thus, an enterprise agreement may include a provision for “Substituted public holidays” in accordance with s 115(3). Section 55(4) also permits enterprise agreements to include terms that are ancillary or incidental to the operation of a NES entitlement or that supplement the NES, and s 55(5) permits an enterprise agreement to include terms that have the same, or substantially the same, effect as provisions of the NES.

[37] We consider that this legislative context guides the proper construction of clause 13. 16 Clause 13.1 provides that an employee “shall be entitled” to the identified public holidays without loss of pay, and it essentially repeats the effect of s 115(1) and s 116 of the FW Act and ss 6 and 7 of the PH Act (noting that some of the holidays specifically named in s 115(1)(a) of the FW Act or s 6 of the PH Act would fall under the rubric “any additional public holidays gazetted by the State or Federal governments” in clause 13.1). As such, clause 13.1 may be regarded as a provision authorised by s 55(5) of the FW Act.

[38] In respect of clause 13.2, the legislative context suggests that, insofar as the provision is entitled “Substitute Days” and both paragraphs of the clause use the expression “substitute day”, the subject matter of the clause is substituted public holidays declared under s 8 of the PH Act, as incorporated into the NES by s 115(2) of the FW Act. This is confirmed by the second sentence in the first paragraph of clause 13.2 which, as earlier discussed, conveys on its most natural reading that a declaration in the Government Gazette is a necessary incident of a “substitute day off”, consistent with s 8 of the PH Act. Understood this way, the clause is concerned with how substituted public holidays declared under s 8 of the PH Act are to be applied to employees covered by the 2020 Agreement. In this respect, as Yallourn submitted, clause 13.2 distinguishes between day work employees, who are dealt with in the first paragraph, and shift work employees, who are dealt with in the second paragraph.

[39] In respect of day work employees, the first sentence of the clause uses the verb “applied” in respect of substitute days off, and this provides further confirmation, consistent with our earlier observation about the ordinary meaning of “apply”, that the provision is concerned with the practical operation of substitute public holidays established exteriorly to the 2020 Agreement by s 8 of the PH Act. As also earlier stated, “applied” is not suggestive of the establishment of a separate entitlement, and its use in clause 13.2 is to be contrasted to the use of the expression “shall be entitled” in clause 13.1, as well as in clauses 13.3 and 13.4. The effect of the first sentence is that, even though day work employees work ordinary hours only from Monday to Friday, a holiday declared under s 8 of the PH Act to be in substitution for any public holiday specified in clause 13.1 occurring on a weekend will be applied to them (presumably on the assumption that the substituted day will be on Monday-Friday). The effect of the second sentence is that the substitute day will be observed on the gazetted day, unless it is agreed between “the Parties” that it is to be observed on a different day.

[40] The second paragraph of clause 13.2 provides for a different approach to be taken for shift work employees (who may, unlike day work employees, be rostered to work ordinary hours on weekends). Its effect is that the public holidays specified in clause 13.1 shall be observed on their traditional dates even if a substitute holiday has been declared under s 8 of the PH Act, unless one public holiday coincides with another in which case the following day or another agreed day will be observed.

[41] Clauses 13.3 and 13.4 operate consistently with the construction of clause 13.2 which we prefer. The first sentence of clause 13.3 provides that day work employees will be entitled to time off without loss of pay for all public holidays “including substitute holidays in lieu thereof”. The expression “in lieu” suggests that a substitute holiday will always be instead of or in replacement for a public holiday identified in clause 13.1 – which is consistent with a substitute holiday being one declared under s 8 of the PH Act, but is not consistent with the approach preferred by the Deputy President whereby a substitute day applies in respect of a public holiday which remains as such but merely falls on a weekend. Clause 13.4(a) provides that a shift work employee “shall… be entitled to” an annual leave credit of 8 hours, or 8 hours’ pay, for any public holiday falling on a day that the employee is not rostered to work. Two things may be noted. First, the provision uses clear and unambiguous language of entitlement in conferring this benefit, in contrast to the first sentence of clause 13.2. Second, the rationale for the entitlement is to ensure equal treatment of shiftworkers, so that all shift workers will receive the same degree of public holiday benefits regardless of the roster they are required to work. That rationale is absent for day workers.

[42] Two matters of historical industrial context the subject of findings in the Deputy President’s decision support our preference for the above approach to the construction of clause 13.2 over that adopted by the Deputy President:

(1) During the negotiations for the 2013 Agreement, the maintenance unions sought that day work employees be entitled to a holiday on Easter Tuesday as a substitute for Easter Saturday. Yallourn initially conceded this, and it formed part of an offer by Yallourn for a new agreement. However, after this offer was rejected in a vote of all employees and industrial action by CFMMEU members followed, Yallourn took this concession “off the table”. A modified proposed agreement was subsequently put to a vote of employees and approved after an in-principle agreement was reached first with the CFMMEU and then the other unions. The explanatory document for the proposed agreement provided to employees pursuant to s 180(5) did not identify clause 13.2 as providing for any new or substantially different entitlement than the preceding agreement (which did not provide any entitlement to “non-gazetted” substitute days for public holidays falling on weekends), nor did the statutory declaration which accompanied the application for approval of the 2013 Agreement identify clause 13.2 as a more beneficial term when compared with the relevant award for the purpose of the better off overall test. This demonstrates that there was never any mutual intention for the equivalent provision in the 2013 Agreement to the current clause 13.2 to provide day workers with public holidays they would not otherwise be entitled to under s 115 of the FW Act (or under the PH Act).

(2) At all times from the approval of the 2013 Agreement to the date the 2020 Agreement was made (15 March 2020, before Anzac Day that year), Yallourn has applied the predecessor provisions of the current clause 13.2 contained in the 2013 Agreement and the 2017 Agreement in a manner consistent with the construction we prefer and inconsistent with the construction adopted by the Deputy President, without complaint from the CFMMEU or any other union or any employee. This established prior practice and understanding weighs strongly against there having been any mutual understanding that clause 13.2 would operate according to the construction preferred by the Deputy President.

[43] For the above reasons, we consider that the Deputy President’s determination of the CFMMEU’s s 739 application was in error. The correct construction of clause 13.2 is that a “substitute day off” in the first paragraph means a substitute day that is declared as such in the Government Gazette pursuant to s 8 of the PH Act and thereby constitutes a public holiday under the NES by virtue of s 115(2) of the FW Act. We will therefore uphold the appeal in respect of the determination of the s 739 application and substitute our construction of clause 13.2 for that of the Deputy President.

[44] A question was raised at the hearing of the appeal as to whether the second sentence of clause 13.2, insofar as it permits the day of the observance of a substitute day to be the subject of agreement of “the parties” (that is, Yallourn, the CFMMEU and the other four unions), is permissible to be included in an enterprise agreement under s 115(3) (which refers to agreement between an employer and an employee) or, alternatively, s 55(4). However, this is a separate issue which is not necessary to be determined in this appeal.

[45] Having regard to the conclusion we have reached concerning Yallourn’s appeal against the Deputy President’s determination of the s 739 application, there is no utility in us considering Yallourn’s appeal against the dismissal of its s 217 application. Permission to appeal is therefore refused in respect of that appeal.

Orders

[46] In respect of the appeal against the Deputy President’s determination of the application in matter C2020/4793, we order as follows:

(1) Permission to appeal is granted.

(2) The appeal is upheld.

(3) In substitution for the Deputy President’s determination of the application ([2021] FWC 3681 at [86]), the application is determined as follows: The correct construction of clause 13.2 of the EnergyAustralia Yallourn Enterprise Agreement 2020 is that a “substitute day off” in the first paragraph means a substitute day that is declared as such in the Government Gazette pursuant to s 8 of the Public Holidays Act 1993 (Vic) and thereby constitutes a public holiday under the NES by virtue of s 115(2) of the Fair Work Act 2009 (Cth).

[47] In respect of the appeal against the Deputy President’s dismissal of the application in matter AG2020/1734, permission to appeal is refused.

VICE PRESIDENT

Appearances:

B Avallone of counsel for the appellant.

Y Bakri of counsel on behalf of the CFMMEU.

Hearing details:

2021.

Sydney and Melbourne (via video-link):

16 September.

Final written submissions:

30 September 2021.

Printed by authority of the Commonwealth Government Printer

<PR735195>

 1   [2021] FWC 3681

 2   AE508007

 3   AE427914

 4   AE405605

 5   [2021] FWC 3681 at [23]-[43]

 6   Ibid at [44]-[49]; AE500958

 7   [2021] FWC 3681 at [50]-[53]

 8   Ibid at [66]

 9   Ibid at [76]

 10   Ibid at [77]

 11   Ibid at [78]

 12   Ibid at [79]-[80]

 13   Ibid at [86]

 14   Macquarie Dictionary

 15   Public Holidays Act 2010 (NSW), s 6; Holidays Act 1983 (Qld), s 3; Holidays Act 1910 (SA), s 5; Public and Bank Holidays Act 1972 (WA), s 8; Public Holidays Act 1981 (NT), s 7

 16   See Amcor Ltd v Construction, Forestry, Mining and Energy Union [2005] HCA 10, 222 CLR 241 at [13] per Gleeson CJ and McHugh J