Cunningham v Coles Group Supply Chain Pty Ltd [2013] FWC 596 (28 June 2013) [2013] FWC 596 FAIR WORK COMMISSION RECOMMENDATION Fair Work Act 2009 s.739 - Application to deal with a dispute Errol Cunningham v Coles Group Supply Chain Pty Ltd T/A Coles Distribution Centre - Forest Lake (C2012/5345) Storage services COMMISSIONER SPENCER BRISBANE, 28 JUNE 2013 Alleged dispute regarding unpaid personal/carer’s leave - payment for period under annual leave, TOIL or RDO provisions - notice and evidence requirements. Introduction [1] This recommendation relates to an application to the Fair Work Commission (the Commission) by Mr Errol Cummingham (the Applicant). The application was made pursuant to s.739 of the Fair Work Act 2009 (Cth) (the Act) seeking the Commission to deal with a dispute under clause 8, the dispute settlement procedure, of the Coles Queensland Distribution Centres Enterprise Agreement 2011 (the Agreement). [2] Neither party raised any jurisdictional arguments relating to the dispute; as such the Commission has proceeded on the basis that the parties agree that the pre-Arbitration requirements of the disputes procedure have been met. [3] The Commission notes that the aspects of the dispute as they relate specifically to the circumstances of Mr Cunningham’s claim were settled with the parties in conference before the Commission. However, the parties (the Shop, Distributive and Allied Employees Association [the SDA/Union] and Coles [the Respondent]) sought further assistance in resolving the underlying dispute which was of general application. Both parties sought the further assistance of the Commission in this regard and consented to the formal determination by the Commission. [4] Formal Directions were set by the Commission for the filing of materials and both Parties consented to the matter being determined on the papers, without the need for a formal Hearing. [5] The parties agreed that the questions for arbitration were as follows: “a) Is the employee required to provide a medical certificate or statutory declaration if seeking to access either unused accrued Annual Leave (clause 31), accrued TOIL of overtime (clause 26.8) or banked RDO’s (clause 25) via clause 29.3.3 in line with the notice and evidentiary requirements of Unpaid Carer’s Leave (clause 29) of the Agreement? b) Is the employee required to meet the notice and evidentiary requirements of clause 29.7 or clause 29.4.8 or clause 29.4.9 in the event that the employee has exhausted all their accrued personal leave but would like to access a period of paid leave to provide care or support to a member of their immediate family or a member of the employee’s household, using and in accordance with clause 29.3.3? c) If the employee elects to seek access to the unused accrued Annual Leave (clause 31), accrued TOIL of overtime (clause 26.8) or banked RDO’s (clause 25) in accordance with clause 29.3.3, does this exclude the employee from the applicable notification and evidentiary requirement/s relevant to the type of leave applied for.” [6] It is noted that the evidentiary requirements between paid and unpaid carer’s leave under the Agreement differ. To access paid personal/carers’ leave, if the employee has accrued a sufficient amount to use, requires the employee to provide a medical certificate or statutory declaration in relation to the period of any paid personal/carers’ leave that exceeds two days. 1 Unpaid carers’ leave requires the employee to provide a medical certificate or statutory declaration in relation to every period of unpaid carers’ leave. 2 [7] The Applicant was represented by Mr Darryn Gaffy, Industrial Officer of the Shop, Distributive and Allied Employees Association (the SDA). The Respondent was represented by Ms Michelle Klietz, Senior Employee Relations Advisor of the Respondent. [8] Whilst all of the submissions and evidence provided in this matter may not be referred to in this recommendation, all of such has been considered in making the determination. Relevant Provisions of the Agreement [9] The Agreement clause 29.3.3 provides: “In the event that an employee has exhausted all accrued personal leave but requires a period of paid leave to provide care or support to a member of their immediate family or a member of the employee’s household the employee shall have an option to take the leave required by accessing unused accrued annual leave (clause 31), accrued TOIL of overtime (clause 26.8) or banked RDO’s (clause 25).” [10] For “Notification and Certification Requirements” Clause 29.4.8 provides: “Notwithstanding subclause 29.4.7 hereof, the Company will require a medical certificate or a statutory declaration (if it is not reasonably practicable for the employee to provide a medical certificate) in relation to every period of unpaid carer’s leave.” [11] Clause 29.7.3 provides: “The Company will require a medical certificate or a statutory declaration (if it is not reasonably practicable for the employee to provide a medical certificate) in relation to every period of unpaid carer’s leave.” Summary of the Applicant’s Submissions and Evidence [12] The Applicant’s position is that once an employee has exhausted all personal leave entitlements, but wishes to have a paid period of absence for the purpose of caring for a family member or a member in their household, they can elect to use clause 29.3.3 of the Agreement and access other accrued leave entitlements for the payment purpose without the obligation of evidence that would normally be required had the employee used unpaid carers’ leave. [13] The Applicant drew the Commission’s attention to several consecutive agreements which it was submitted have similar clauses to that of clause 29.3.3 of the Agreement. It is not necessary to repeat in its entirety the substance of this material. However the Applicant made submissions as to the historical context of the Agreement including to the Family Leave Award. Reference will be made to the historical material where the context requires. [14] The Applicant submitted that the Family Leave Award through the 2005 Agreement did not impose any “outright obligation” on an employee to comply with evidence requirements in relation to sick/carer’s leave. This was said to be subject to some exceptions for instance where such evidence was specifically required by an employer. The Applicant argued that the custom and practice established by the way the Respondent allowed for Family Leave, without the need for evidence, under previous agreements, indicates the intended operation of clause 29.3.3. [15] The Applicant submitted that the principles of construction and interpretation of an enterprise agreement can be found in the often quoted decisions of Kucks v CSR Ltd ; 3 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd ; 4 and Amcor v Construction, Forestry, Mining and Energy Union , 5 summarised thus: “(a) That the agreement is to be construed in the context of the relevant industry and industrial relations environment so as to give effect to its evident purposes having regard to such context, despite mere inconsistencies or infelicities or expression which might tend to some other meaning; (b) That it is not the subjective beliefs or understanding of the parties about their rights and liabilities that govern their relations. Rather, what matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. That normally requires consideration not only of the context, but also of the surrounding circumstances known to the parties and the purpose and object of the transaction; and (c) That the nature of the agreement, the manner of its expression, the context in which it operates and the industrial purpose it serves, suggests that the construction to be given is not to be a strict one but one that contributes to a sensible industrial outcome, such as should be attributed to the parties who negotiated and executed the agreement.” [16] The Applicant referred to Shop Distributive and Allied Employees’ Association v Woolworths SA Pty Ltd , wherein Marshall, Tracey and Flick JJ summarised these principles: “14 Support for the position that the industrial context and the intention or purpose of the makers of an industrial instrument should be paramount notwithstanding the strict wording of the document is found in the judgments of members of the High Court in Amcor Limited v Construction, Forestry, Mining and Energy Union [2005] HCA 10 ; (2005) 222 CLR 241. ” [17] The Applicant noted that in Amcor , Gleeson CJ and McHugh J stressed at paragraph [2] that : “[2] resolution of the issue turns upon the language of the particular agreement, understood in the light of its industrial context and purpose, and the nature of the particular reorganisation” [18] Also at paragraph [13] their Honours referred to “…the industrial purpose of the agreement and the commercial and legislative context in which it applies”. [19] It was submitted that this purposive approach to the construction of industrial instruments is persuasively illustrated by Kirby J in Amcor at paragraph [96] where his Honour said: “[96] The nature of the document, the manner of its expression, the context in which it operated and the industrial purpose it served combine to suggest that the construction to be given to Cl 55.1.1 should not be a strict one but one that contributes to a sensible industrial outcome such as should be attributed to the parties who negotiated and executed the agreement. Approaching the interpretation of the clause in that way accords with the proper way adopted by this Court of interpreting industrial instruments and especially certified agreements. I agree with the following passage in the reasons of Madgwick J in Kucks v CSR Ltd, where his Honour observed: It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading and meanings which avoid inconvenience or injustice may reasonably be restrained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly to be held to mean something else in the document at hand. [20] The Applicant made submissions as to his interpretation of clause 29.3.3. The Applicant referred to the history of the clause, namely, that it was introduced by the SDA as part of its log of claims leading up to the negotiation of the 2011 Agreement. The SDA states this provision was to reintroduce an entitlement that had previously been in place and the intention was for it to operate in a similar manner to how the Respondent handled the Family Leave Award provisions. [21] In terms of constructing the meaning of the clause, the Applicant argued that the placement of the clause under the subheading “Entitlement” and a literal reading of the clause provide an automatic entitlement for the employee to gain access to wages from certain specified types of accrued leave. The phrase “the employee shall have an option” is an imperative that allows the employee to have sole discretion and choice whether to use their own accrued leave entitlements to gain a period of paid leave, or to have unpaid carers’ leave. [22] Further, the Applicant argued the Agreement contemplated no consideration of consent on part of the Respondent in how the Applicant chose to take the leave and exercise the entitlement. [23] The Applicant submitted that notice and evidentiary requirements relate to the purpose of the leave, rather than under what entitlement the leave payment is being made. The Applicant contended that by imposing notice and evidentiary requirements on an employee seeking to access the entitlement, that this would place an unnecessary burden on the employee. Such a requirement would nullify the effect of the clause. [24] The Applicant also made submissions as to how this interpretation of clause 29.3.3 interacts with other leave clauses. The Applicant argued that clause 29.3.3 does not suggest the need to adhere to any further notice or evidentiary requirements for the relevant entitlement being accessed. [25] The Applicant argued the annual leave clause in the Agreement envisaged that an employee would take the entitlement in a block with a minimum notice period of 48 hours. 6 If an employee had to comply with such requirements, it would nullify the effect of clause 29.3.3, which allows an employee to take carers’ leave at short notice. [26] The Applicant then referred to the TOIL clause, which requires requests to be in writing and taken only at mutual agreement and convenience, 7 and the banked RDOs clause, which requires mutual agreement the day before accessing it, 8 and claimed that to comply with such requirements would nullify the effect of clause 29.3.3. [27] The Applicant submitted that employees are not required to provide evidence for the purpose of unpaid carers’ leave pursuant to clauses 29.4.8 or 29.7.3 when seeking access to other forms of leave under clause 29.3.3 of the Agreement. The notice requirements are not necessarily an issue; however, in the context of evidentiary requirements, these will depend on whether the leave is paid or unpaid. [28] The Applicant supports its submissions by reference to the historical customs and practices arising from similar clauses in older agreements; by taking into account the context, understanding of the parties and actual wording of the agreement at the time of negotiations; that to impose notice and evidentiary requirements results in an incorrect and burdensome interpretation; and, that allowing the clause election to occur and then imposing relevant evidence requirements maintains the integrity of the clause as presented and agreed to during negotiations. Summary of the Respondent’s Submissions and Evidence [29] The Respondent’s position is that an employee can access annual leave, accrued TOIL of overtime, or banked RDOs as provided for in clause 29.3.3 once the employee has exhausted his or her personal leave, but the employee must satisfy the same notification and evidentiary requirements as provided for in clauses 29.4.8 and 29.7.3 for accessing unpaid carers’ leave. [30] The Respondent submitted that there were two principal reasons justifying this position: • “First, any period of leave granted under clause 29.3.3 is effectively an extension of paid personal leave and available for the same purpose. As an employee is required to provide a medical certificate or a statutory declaration to justify the taking of the initial personal leave (clause 29.4.8 and 29.7.3) it is perfectly logical that the same requirement be applied to allow that leave to be extended where the purpose of the extension is the same.” • “Secondly, in order to claim the right to access unused accrued annual leave, accrued TOIL of overtime or banked RDO’s the employee needs to satisfy the employer that such leave is for the purpose stated in clause 29.3.3, namely to provide care and support to a member of their immediate family or household. It is entirely consistent with clause 29.4.8 and 29.7.3 that the employee provides a medical certificate or a statutory declaration to justify the purpose for the leave.” [31] The Respondent broadly agreed with the principles of interpretation and construction outlined in the Applicant’s submissions, however, noted a number of further relevant principles related to the interpretation and construction of enterprise agreements: 1. “Whether the clause in question accords with business common sense is a relevant consideration; 9 2. The Enterprise Agreement must be construed in relation to the matrix of facts that existed at the time the Enterprise Agreement was made; 10 3. Where a clause in the Enterprise Agreement is the product of a history, regard can be had to that history; 11 4. A strict literal interpretation is to be avoided. Clauses must be viewed broadly and in context; and 12 5. The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined by reference to the language of the instrument viewed as a whole” 13 [32] The Respondent also referred to Australian Rail, Tram and Bus Industry Union and Australian Federated Union of Locomotive Employees v QR Limited T/A QR National (C2012/18; C2012/2174), where in Commissioner Lee set out His Honour, Vice President Lawler’s considerations with respect to the relevant principles as follows: “In summary, the general principles governing the construction of contracts laid down by the High Court in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales applies to the construction of industrial agreements. However, consistent with the approach in Kucks and Short v FW Hercus Pty Ltd, an industrial agreement must always be construed in context: the context of particular provisions within the agreement as a whole and the context in which the agreement was made including any relevant statutory or historical context. Extrinsic evidence as to the context in which the agreement was made, including the statutory and historical context, will be admissible to demonstrate the existence of ambiguity and or to resolve ambiguity.” 14 [33] The Respondent made submissions as to its interpretation of clause 29.3.3. The Respondent argued for a Business/Common Sense reading of the clause as the primary purpose of statutory construction is to construe the relevant provision so it is consistent with the language and purpose of all provisions of the Agreement. The Respondent accepted it may not be practical for an employee to get a doctors’ appointment or medical certificate at short notice, however, submitted that signing a statutory declaration at work where a Justice of the Peace would likely be close at hand, was not an onerous provision. [34] In terms of the historical aspect of the provision, the Respondent argued that the 2011 Agreement was intended to be a consolidated standalone document that included “all relevant employment conditions (including the National Employment Standards [NES]; union rights provisions; Award, over-Award and Enterprise Agreement conditions) that can be legally contained in an Enterprise Agreement are incorporated into a consolidated document”. 15 [35] The Respondent further added that at no time during the negotiation of the 2011 Agreement or afterwards has it entered into discussions with SDA regarding the concept of family leave. [36] In relation to communications made by the Respondent to employees on previous occasions and in relation to the 2011 Agreement and previous agreements, and regarding clauses of a similar nature with similar notification and evidentiary grounds in previous agreements, the Respondent stated the SDA did not raise an alternative interpretation until August 2012. [37] The Respondent submitted that the notification and evidentiary requirements in the Agreement apply logically and that freedom to access leave without proper notification and evidence goes against business common sense. The Respondent also relied on a reading of the Agreement in context and of taking into account a broad reading of the text in pressing for its interpretation of the Agreement. Conclusion [38] In terms of the interpretation of the Agreement provisions, the words of the Agreement have been examined, as have the nature of the document, the manner of its expression and the context in which it operates. The issues of the industrial context, purpose and nature of the organisation have also been considered. The Respondent is a large employer conducting significant distribution operations. The rostering of its staff and the usage of leave entitlements are important to the operations and the fairness to the parties. [39] It is clear that if an employee wished to take any type of leave, the parties negotiated an agreement that provides for a notice/evidence requirement which varies depending upon the type of leave. It is difficult to imagine that the agreement operates in such a way that in this specific scenario an employee can bypass all notice/evidence requirements. In fact the scenario before the Commission, provides real reasoning as to specifically why notice/evidence requirements exist. That is so that employees aren’t by default afforded leave they are not entitled to under the Agreement. [40] For an example an Employee applies for leave next Thursday and is declined because there is already a high amount of planned leave. The Employee has no entitlement to paid personal/carer’s leave remaining. The Employee calls in sick on Thursday and knowing that he has no sick leave left applies for it to be paid out of his annual leave. On the construction advanced by the Union, that Employee would not be required to provide any evidence to access the leave and does not have to comply with evidence requirements of applying for other kinds of leave. [41] Further if the position as advanced by the Union is correct it would be a limitation on the operation of clause 29.4.8. It is difficult to accept that the operation of the clause is such that an employee who is otherwise not entitled to any payment for their absence and elects to ask for payment from their annual leave, RDO or TOIL entitlements, therefore becomes entitled without demonstrating evidence for such. [42] The Union’s position if accepted is essentially asking the Commission to read further words into clause 29.7 of the Agreement. The clause states: “Notwithstanding sub clause 29.4.7 hereof the company will require a medical certificate from a registered health practitioner or a statutory declaration (if it is not reasonably practicable for the employee to provide a medical certificate) in relation to every period of unpaid carer’s leave.” (emphasis added) [43] The underlying assumption of the arguments advanced by the Union is that in clause 29.7 after the words “ every period of unpaid carer’s leave ” the words “ unless it is a period of leave to which clause 29.3.3 applies ” should be read in. [44] No evidence has been lead in relation to the specific circumstances of any one employee in relation to, for example, any applications for other periods of paid leave under the Agreement. But a further assumption of the Union’s position is that once an employee takes a period of unpaid carer’s leave and indicates that he/she wishes for that leave to be paid from their other paid leave entitlements it ceases to be a period of unpaid carer’s leave and becomes a period of the other paid leave (ie annual leave, TOIL or RDO). Accordingly to be a period of annual leave then the requirements associated with annual leave must be complied with. Similarly with any period of TOIL or RDO’s. To find otherwise would be incongruous to authority, custom and practice in most businesses and as a matter of industrial law logic. [45] The correct classification of the nature of the operation of clause 29.3.3 of the Agreement is that an employee is being allowed to access payment in circumstances where they would otherwise not be entitled to any payment. The steps for accessing the kinds of payments envisaged by clause 29.3.3 can be summarised as follows: • An employee is absent from work to provide care for an immediate family member of member of their household who is suffering from an injury/illness; • To be an authorised period of absence the employee must comply with any notice/evidence requirements provided for by the Act or supplemented by the applicable industrial instrument, in this case the Agreement; • In the circumstances of Mr Cunningham those notice/evidence requirements are contained in clause 29.7 of the Agreement; • The Employee “ shall have an option ” to take the leave required by accessing unused accrued paid leave entitlements. [46] It is clear that when looking at the industrial purpose of the clauses the parties have clearly negotiated notice/evidence requirements for every other type of leave; it is not more likely that the parties would then draft a clause which operates in such a way so as to circumvent any notice/evidence requirement. [47] In this respect I think it is significant that the operation of clause 29.3.3 is limited only to periods of carer’s leave. This may be evidence of the acceptance of the parties that periods of carer’s leave are generally unexpected (otherwise the notice requirements for annual leave could easily be complied with) and in such cases the notice requirements (ie the third question for arbitration) can’t be complied with. [48] There was reference to “custom and practice” by both the Applicant and Respondent. However limited evidence was led to satisfy the Commission that what was said to be “custom and practice” was in fact “custom and practice”. It is not possible for the Commission to make any definitive findings in relation to this aspect of the argument. [49] Accordingly the Recommendation has been based on the usual approach to the construction of industrial Agreements. [50] Based on the aforementioned reasoning it is recommended that: 1. An employee is required to provide a medical certificate or statutory declaration if seeking to access either unused accrued Annual Leave (clause 31), accrued TOIL of overtime (clause 26.8) or banked RDO’s (clause 25) via clause 29.3.3 in line with the notice and evidentiary requirements of Unpaid Carer’s Leave (clause 29) of the Agreement; 2. An employee is required to meet the notice and evidentiary requirements of clause 29.7 or clause 29.4.8 or clause 29.4.9 in the event that the employee has exhausted all their accrued personal leave but would like to access a period of paid leave to provide care or support to a member of their immediate family or a member of the employee’s household, using and in accordance with clause 29.3.3; and 3. If an employee elects to seek access to the unused accrued Annual Leave (clause 31), accrued TOIL of overtime (clause 26.8) or banked RDO’s (clause 25) in accordance with clause 29.3.3, this does not exclude the employee from the applicable notification and evidentiary requirement/s relevant to the type of leave applied for. COMMISSIONER 1 Clause 29.4.3 of the 2011 Agreement. 2 Clause 29.7.3 of the 2011 Agreement. 3 (1996) 66 IR 186 , per Madgwick J at 184. 4 (2004) 219 CLR 165 at [40]. 5 [2005] HCA 10 ; (2005) 222 CLR 241 at [96] . 6 Clause 31 of the 2011 Agreement. 7 Clause 26 of the 2011 Agreement. 8 Clause 25 of the 2011 Agreement. 9 See Australasian Meat Industry Employees Union (WA Branch) v Woolworths Limited [2007] FCAFC 201 ; (2007) 164 FCR 420 at [19] - [21] per Siopis J, Van Efferen v CMA Corporation Ltd [2009] FCA 597 at [37] . 10 See Finance Sector Union of Australia v Commonwealth Bank of Australia [2001] FCA 335 ; (2001) 106 IR 172. 11 See Short v F W Hercus Pty Ltd (1993) 40 FCR 51l at 518. 12 See A ustralasian Meat Industry Employees Union (WA Branch) v Woolworths Limited [2007] FCAFC 201 ; (2007) 164 FCR 420 at [21] per Siopis J. 13 High Court of Australia Project Blue Sky Inc & Others v Australian Broadcasting Authority (1998) 194 CLR 355 at 381-382 per McHugh, Gummow, Kirby and Hayne JJ 14 See Australasian Meat Industry Employees Union (WA Branch) v Woolworths Limited [2007] FCAFC 201 ; (2007) 164 FCR 420 at [19] - [21] per Siopis J, Van Efferen v CMA Corporation Ltd [2009] FCA 597 at [37] . 15 Union Log of Claims for 2011 Agreement, clause 27. 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