WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION CITATION : 2013 WAIRC 00796 CORAM : COMMISSIONER S J KENNER HEARD : FRIDAY, 12 APRIL 2013, FRIDAY, 9 AUGUST 2013 DELIVERED : MONDAY, 9 SEPTEMBER 2013 FILE NO. : APPL 13 OF 2013 BETWEEN : THE AUSTRALIAN RAIL, TRAM AND BUS INDUSTRY UNION OF EMPLOYEES, WEST AUSTRALIAN BRANCH Applicant AND PUBLIC TRANSPORT AUTHORITY OF WESTERN AUSTRALIA Respondent 1522 WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 93 W.A.I.G. Catchwords : Industrial law (WA) – Application for an interpretation of clauses of the Public Transport Authority (Transperth Train Operations Rail Car Drivers) Enterprise Order 2011 – Interpretation of cl 44.3 – Principles applied – Public holiday penalties should not be paid to a rail car driver when on sick leave – Declaration issued Legislation : Industrial Relations Act 1979 s 46 Result : Declaration issued Representation: Counsel: Applicant : Mr K Singh Respondent : Mr D Matthews of counsel Case(s) referred to in reasons: Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 BHP Billiton Iron Ore Pty Ltd v Australian Workers’ Union Western Australian Branch, Industrial Union of Workers (2006) 154 IR 457 In re Shift Workers Case 1972 [1972] AR 633 Liquor, Hospitality and Miscellaneous Union, West Australian Branch v The Minister for Health (2011) 91 WAIG 291 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 Case(s) also cited: Australian Communication Exchange Ltd v Deputy Commissioner of Taxation (2003) 201 ALR 271 CIC Insurance Limited v Bankstown Football Club Limited (1997) 187 CLR 384 City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426 City of Wanneroo v Holmes (1989) 30 IR 362 Cooper Brookes (Wollongong) Proprietary Limited v The Commissioner of Taxation of the Commonwealth of Australia (1981) 147 CLR 297 Geo A Bond and Co Ltd (in liq) v McKenzie [1929] AR (NSW) 498 Kucks v CSR Limited (1996) 66 IR 182 Robe River Iron Associates v Amalgamated Metal Workers and Shipwrights’ Union (1987) 67 WAIG 1097 Short v F W Hercus Pty Limited (1993) 40 FCR 511 The Metropolitan Gas Company v The Federated Gas Employees’ Industrial Union (1925) 35 CLR 449 Reasons for Decision 1 The Union and the Authority are party to the Public Transport Authority (Transperth Train Operations Rail Car Drivers) Enterprise Order 2011. The parties are in dispute in relation to the proper interpretation of cl 44.3 of the Order, in relation to payments to be made to a rail car driver when on sick leave. Specifically, the issue is whether public holiday penalties are included. The Union says they are and the Authority disagrees. Questions posed 2 Accordingly these proceedings have been brought for an interpretation of the relevant provisions of the Order. In the application, a number of related questions are asked and they are: Question 1 10. Does clause 44.3 (a) (i) of the Order create an entitlement for an additional payment for shift penalties Monday to Friday inclusive? Question 2 11. If an employee is rostered or is otherwise required to work on a public holiday, does clause 14.5 (a) of the Order create an entitlement for the employee to be paid public holiday penalties? Question 3 12. If an employee is rostered or otherwise required to work on a public holiday, does clause 14.5 (b) of the Order create an entitlement for the employee to be paid a sum equal to eight hours pay at base rate, or be granted eight hours' leave with pay (known as leave in lieu)? Question 4 13. If an employee is unable to attend or remain at their place of employment during their rostered shift, by reason of personal ill health or injury on a public holiday, which falls on or between Monday and Friday, are they entitled to receive the public holiday penalty in accordance with clause 44.3 (a) (i)? 93 W.A.I.G. WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 1523 Relevant provisions of the Order 3 It is convenient at this point to set out the relevant provisions of the Order. They are clauses 14.4, 14.5, 24.1, 24.2 and 44.3(a) as follows: 14.4 Saturday and Sunday Penalty Rates (a) All standard hours worked on Saturdays by shift employees shall be paid at time and a half. (b) All time worked on a Sunday shall be paid at the rate of double time. (c) For the avoidance of doubt, where a shift commences on one day and concludes on the following day, hours will be paid at the rate applicable to the day on which they were worked. 14.5 Penalties for Working on Public Holidays (a) Employees rostered or otherwise required to work on a Public Holiday shall be paid for all time worked at the rate of time and a half for the first 8 hours worked on any shift on that day and at the rate of double time and a half for all time worked in excess of eight hours on any shift. (b) In addition to payment described in subclause 14.5 (a) an employee rostered or otherwise required to work on a Public Holiday shall either: (i) be paid a sum equal to eight hours' pay at the base rate of pay; or (ii) be granted eight hours' leave with pay (to be known as Leave in lieu of Public Holidays) which an employee can elect to be granted and can clear in accordance with clause 33 – Annual Leave. (c) For the avoidance of doubt, no other penalties, including penalties under sub-clause 14.3 of this clause, are payable for work on a public holiday. … 24. SHIFT WORK 24.1 Monday to Friday The Employer may, if the Employer so desires, work any part of its business on shifts in accordance with the following provisions; (a) On an afternoon shift which commences before 1800 hours and the rostered duration of which concludes at or after 1830 hours, an employee will be paid an allowance of $2.76 an hour on all time paid at the base rate. (b) On a night shift, which commences at or between 1800 hours and 0359 hours, an employee will be paid an allowance of $3.28 an hour on all time paid at the base rate. (c) On an early morning shift, which commences at or between 0400 hours and 0530 hours an employee will be paid an allowance of $2.76 an hour on all time paid at the base rate. (d) In addition to the hourly shift work allowance, an employee will be paid an allowance of $3.28 for any shift where the rostered duration commences or finishes at or between 0101 hours and 0359 hours. (e) In calculating the allowance under this clause, broken parts of an hour less than thirty minutes on any shift shall be disregarded and thirty minutes to fifty-nine minutes paid as one hour. 24.2 Saturday and Sunday The penalties payable on Saturdays and Sundays are specified at sub clause 14.4 Saturday and Sunday Penalty Rates. … 44.3 (a) Subject to this subclause, an employee shall be paid sick leave at the employee's base rate of pay. In addition payment shall include: (i) Shift penalties Monday to Friday inclusive; (ii) Saturday penalty; and (iii) Sunday penalty which the employee would have received had the employee not ceased duty on account of sickness. Provided that no sick leave payment shall be made for additional shifts or overtime which the employee would have worked. Principles of interpretation 4 The relevant principles to apply in interpreting an industrial instrument are well settled. In Liquor, Hospitality and Miscellaneous Union, West Australian Branch v The Minister for Health (2011) 91 WAIG 291 I summarised them and at pars 101-104 I said as follows: 101 The Agreement, as a legal instrument, is subject to the usual principles of interpretation. There has been over many years, judicial acceptance that in the case of industrial instruments, such as awards or industrial agreements, a 1524 WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 93 W.A.I.G. ‘generous’ approach to interpretation should be applied. In George A Bond & Co Ltd (in liquidation) v McKenzie [1929] AR (NSW) 498 Street J said at 503 – 504: … speaking generally, awards are to be interpreted as any other enactment is interpreted. They lay down the law affecting employers and employees in their relations as such, and they have to be obeyed to the same extent as any other statutory enactment. But at the same time, it must be remembered that awards are made for the various industries in the light of the customs and working conditions of each industry, and they frequently result, as this award in fact did, from an agreement between the parties, couched in terms intelligible to themselves but often framed without careful attention to form and draughtsmanship which one expects to find in an Act of Parliament. I think, therefore, in construing an award, one must always be careful to avoid a too literal adherence to the strict technical meaning of words, and must view the matter broadly, and after giving consideration and weight to every part of the award, endeavour to give it a meaning consistent with the general intention of the parties to be gathered from the whole award. 102 As to the interpretation of industrial agreements in this jurisdiction, in Robe River Iron Associates v Amalgamated Metal Workers and Shipwrights Union (1987) 67 WAIG 1097 Brinsden J observed at 1098: The meaning of a provision in the Agreement is to be obtained by considering the terms of the Agreement as a whole. If the terms are clear and unambiguous it is not permissible to look to extrinsic material to qualify the meaning of the particular provision being considered. Therefore, when the issue is which of two or more possible meanings is to be given a contractual provision it is not permissible to look at actual intentions, aspirations, or expectations of the parties before or at the time of the contract, except in so far as they are expressed in the contract but to look at only the objective framework of facts within which the contract came into existence, and to the parties presumed intentions in that setting. Should a consideration of the whole terms of this Agreement expose an ambiguity in the construction of Clause 6(9) then resort may be made to extrinsic material and in certain circumstances any trade custom or usage. 103 In the same case, Kennedy J said that in the interpretation of agreements, a broad approach to the meaning of the agreement should be adopted, and too literal adherence to the technical meaning of words should be avoided. 104 More recent expressions of the generous approach to the interpretation of industrial instruments were adopted by Madgwick J in Kucks v CSR Limited (1996) 66 IR 182, considered and approved by Kirby and Callinan JJ in Amcor Limited v CFMEU (2005) 222 CLR 241 at 270-271; 282-283. 5 In Amcor, Kirby J, at par 67, emphasised that in the final analysis, the process of interpretation is essentially a text based activity. Additionally, I note the observations of McHugh, Gummow, Kirby and Hayne JJ in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at pars 69-71 and those of Wheeler J (Steytler and Pullin JJ agreeing) in BHP Billiton Iron Ore Pty Ltd v Australian Workers’ Union Western Australian Branch, Industrial Union of Workers (2006) 154 IR 457 at pars 23-24. 6 I adopt and apply these principles for present purposes. Position of the parties 7 Having referred to relevant authorities in relation to the construction of industrial instruments, the Union contended that the provisions of the Order were clear and unambiguous. It was submitted that the terms of cl 14.5(a) and (b) create an entitlement for employees to be paid public holiday penalties when rostered to work or otherwise required to work. The Union contended that having regard to the relevant provisions of cl 44 of the Order, in the context of the Order as a whole, where public holidays fall between Monday and Friday in a week, a reasonable person in the position of the employer should regard the entitlements conferred by cl 14.5(a) and (b) as “shift penalties”. Accordingly, they should be taken into account for the purposes of an employee’s entitlement under cl 44.3(a)(i) of the Order. The Union submitted that adopting a generous approach to construction, which is appropriate, and having regard to the scope and purpose of the Order, this is the true interpretation of cl 44.3(a)(i). 8 On the other hand, the Authority, whilst also contending that the relevant provisions of the Order are clear and unambiguous, submitted that there is no basis to include “public holiday penalties” in payments made to employees under cl 44.3(a)(i). It contended that adopting the usual approach to the interpretation of industrial instruments, the terms of cl 44.3(a) are clear and do not include payments for public holiday penalties. Whilst the terms of cl 44.3(a) was described as being beneficial to employees, by including payments they would not otherwise be entitled to when not working, it is a bridge to far, on the Authorities’ submissions, to extend that to public holidays as contended by the Union. 9 In particular, the Authority focused on the language used in cl 44.3(a) and the clear absence of any reference to public holiday penalties, despite the inclusion of other penalties, such as shift penalties Monday to Friday, and Saturday and Sunday penalties. The broad submission was that had the Order intended to make public holiday penalties payable to an employee on sick leave, the clause would have said so. Accordingly, the literal and ordinary meaning of cl 44.3(a) leads to the conclusion that such payments are not included. Consideration 10 The application of established principles to the interpretation of industrial instruments requires firstly, a consideration of the ordinary and natural meaning of the text used in the contentious provisions of the Order. One should not immediately look to extrinsic materials in an endeavour to divine some hidden meaning of the provision in question. This approach to the construction of the clauses of the Order in question leads to the following. 11 Clause 44.3 sets out the payments an employee is entitled to in the event they are unable to attend or remain at work, by reason of sickness or injury. The draftsperson of the clause has set out, with some particularity, those payments, in addition to base 93 W.A.I.G. WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 1525 pay, that are to be included. I agree with the submissions of counsel for the Authority, that the terms of cl 44.3 are beneficial to an employee. It includes payments for work in unsociable hours, in circumstances where no work is actually performed. 12 As a matter of structure, cl 44.3(a) provides for two elements to the payments an employee is entitled to receive when sick. The first is the “base rate of pay”. There was no dispute that this is the rate of pay as prescribed for an employee in cl 18 of the Order. The second element, is an extra payment, as prescribed by cl 43(a)(i)-(iii). There was no contest as to the meaning of (ii) and (iii). They plainly refer to the “penalties” payable when an employee works ordinary hours on a Saturday or a Sunday, as prescribed by cl 14.4 of the Order. Furthermore, the draftsperson of the clause has sought to place some limitations on the scope of payments to employees, when on sick leave. Excluded are payments for “additional shifts” and “overtime” which may otherwise have been worked by the employee. 13 I return then to the controversial provision, which is cl 44.3(a)(i). For the Union to succeed, it must be open to conclude that the terms of (i) referring to “Shift penalties Monday to Friday inclusive”, includes payments made where an employee is rostered to or otherwise works on a public holiday as provided in cl 14.5 of the Order. For the following reasons, to reach this conclusion would, in my opinion, place an impermissible strain on the ordinary and natural meaning of the language used in the Order, when considered as a whole. 14 Whilst cl 44.3(a)(i) does not refer to it, the reference to “shift penalties” must be a reference to the additional payments prescribed in cl 24.1 of the Order. It was common ground between the parties, that this was so, despite cl 24.1 being headed “Allowances”. From the rest of Part 5 of the Order, it is seen why it was so described, because a range of allowances for various conditions of work are set out. Nothing turns on the inclusion of shift penalties in this clause in my view. 15 The first part of cl 44.3(a)(i) refers to “shift penalties”. It is trite to observe that in the interpretative process, technical or other terms of art may have a particular meaning. In industrial relations parlance, the term “shift penalties” is one of long standing and accepted meaning. It describes those additional payments made to an employee for working unsociable hours to compensate for the disruption to an employee’s domestic and social life, as a result of working shifts: In re Shift Workers Case 1972 [1972] 72 AR 633. The fact that such clauses impose an additional cost on the employer, and is an additional payment to the employee, is indicated by its description generally, as a “penalty”: Shift Workers Case. The penalties payable are normally expressed as an allowance, either as a flat payment or a percentage loading on an employee’s base rate of pay. 16 The characterisation of “penalty” payments for working unsociable hours, is reflected in the provisions of the Order applicable to work on Saturdays, Sundays and Public Holidays. In clauses 14.4 and 14.5, the respective payments are clearly identified and described as “Saturday and Sunday Penalty Rates” and as “Penalties for Working on Public Holidays”, respectively. 17 Carrying forward this approach to the drafting of the Order, when one reaches cl 44.3, it is clear that the same broad descriptions are used. It is important to note that cl 44.3(a)(i) does not just refer to “penalties Monday to Friday inclusive”. It specifically refers to the concept of “shift penalties”. In my view, as a matter of construction, when read with the terms of cl 24.1, this distinction is significant. As also pointed out by the Authority in its submissions, there is a conceptual distinction between additional payments for working a particular shift, as opposed to working on a public holiday. The former refers to compensation for the disruption to domestic and social life of working a particular shift, whether it is morning, afternoon or night. The latter refers to compensation for working on a particular day i.e. a public holiday, a day on which employees are not generally required to attend for work. 18 Whilst I accept that the Union may say it is unfair to include some penalty payments on sick leave and not others, the Commission’s task is to interpret the Order as it finds it, and not to rewrite it according to what the Commission considers may be a fair result. Adopting the approach I have to the interpretation of cl 44.3(a)(i) of the Order, leads to no absurdity or repugnancy with the provisions of the Order as a whole. 19 Having regard to the foregoing, the answers to the questions posed must be: Question 1: Yes, Question 2: Yes, Question 3: Yes, Question 4: No. 20 The Commission declares accordingly. 2013 WAIRC 00805 INTERPRETATION OF CLAUSES 14.5 AND 44.3 OF THE PUBLIC TRANSPORT AUTHORITY (TRANSPERTH TRAIN OPERATIONS RAIL CAR DRIVERS) ENTERPRISE ORDER 2011 (2011 WAIRC 00218)