"Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU) v Gruma Oceania Pty Ltd T/A Mission Foods [2021] FWC 1960

1 Fair Work Act 2009 s.739 - Application to deal with a dispute "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU) v Gruma Oceania Pty Ltd T/A Mission Foods (C2020/8902) DEPUTY PRESIDENT CLANCY MELBOURNE, 12 APRIL 2021 Alleged dispute about a matter arising under an enterprise agreement - whether certain hours of work attract overtime rates of pay. [1] Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) filed an application with the Commission pursuant to s.739 of the Fair Work Act 2009 (the Act). The AMWU made its application raising a dispute with Gruma Oceania Pty Ltd T/A Mission Foods (Mission Foods) under the Gruma Oceania Enterprise Agreement 20171 (the Agreement). The essence of the dispute is the appropriate payment for employees when they commence a shift of work at 2:00am and finish at 10:00am. [2] The AMWU and Mission Foods conferred and confirmed the questions to be determined were: “In circumstances where a day worker who is required to commence work at 2:00am requests that his/her work finishes at 10:00am, and the employer agrees: 1. Is the employee entitled under the Agreement to be paid eight hours at ordinary rates only? 2. If the answer to question 1 is no, what is the employee entitled to be paid under the Agreement?” [3] After a conference on 22 December 2020, the parties filed material ahead of a hearing on 19 March 2021 at which Mr Josh Garner represented the AMWU and Missions Foods was given permission to be represented by Mr David McLaughlin of Rigby Cooke Lawyers. 1 [2017] FWCA 3050. [2021] FWC 1960 DECISION -- 1 of 7 -- [2021] FWC 1960 2 Background and Submissions [4] Mission Foods ordinarily operates continuously from 6:00am Monday to 6:00am Saturday, with some overtime worked on Saturdays from time to time. For some years Mission Foods has also required a number of employees in its production area to commence work at 2:00am on Mondays in order for the factory to be operating at full capacity by 6:00am. In 2019, Mission Foods implemented a roster change that also required one day worker in the warehouse area to commence work at 2:00am on Monday, with four hours of overtime worked prior to the commencement of their ordinary hours (6:00am to 2:00pm). Each of the day shift workers in the warehouse rotate through this early start shift and end up working it on approximately four occasions per annum. It is not disputed by the parties that if a warehouse employee works this shift as rostered, they are working 4 hours of overtime and 8 ordinary hours and are entitled to be paid (and are in fact paid) as such. [5] Since the implementation of this early start in the warehouse area, it has been customary for the employee working the early start to be asked if they will work through to 2:00pm or finish after 8 hours of work, that is at 10:00am. This discussion generally occurs between the employee and their supervisor after the commencement of the shift, usually at around 7.00am or 8.00am. In the event an employee advises that they wish to finish at 10:00am, it appears this will be accommodated by the supervisor. Whereas the majority of production day workers who commence work at 2:00am on Monday work through until the rostered finish time of 2:00pm, the majority of warehouse day workers have chosen to finish at 10:00am. Where an employee finishes at 10:00am, the Respondent has been paying the employee 8 hours at ordinary rates. [6] The AMWU’s position is that an employee working eight hours between 2:00am and 10:00am is not working ordinary day hours only, and ought to receive a penalty or overtime rate. It says that the shift in question does not fall entirely within the spread of hours for day work and therefore the entirety of the shift cannot be paid at ordinary day rates only. Further, it says that neither clause 12 nor clause 13 of the Agreement deal with the payment for hours that are worked outside the spread of hours described in clause 12.1. The AMWU submits that the treatment of hours worked outside the spread of hours for a day worker is not a matter dealt with in the Agreement and therefore, the terms of the Food, Beverage and Tobacco Manufacturing Award 2020 (the Award) should apply. [7] The AMWU notes that the terms of the Award are incorporated into the Agreement in accordance with clause 5.3 of the Agreement and asserts that the terms of the Award shall apply so long as a subject matter is not dealt with in the Agreement and where there is no inconsistency with the Agreement’s terms. The AMWU refers to clause 12.2(c) of the Award, which provides for the same spread of hours for day work as the Agreement but then relies upon clause 12.2(e) of the Award: “Any work performed outside the spread of hours must be paid for at overtime rates. However, any work performed by an employee prior to the spread of hours which is continuous with ordinary hours for the purpose, for example, of getting the plant in a state of readiness for production work is to be regarded as part of the 38 ordinary hours of work.” [8] The AMWU submits that the work performed by the employees between 2:00am and 6:00am ought to be paid at overtime rates, regardless of the time the employee concludes -- 2 of 7 -- [2021] FWC 1960 3 work on that day and that those hours should also be regarded as part of the 38 ordinary hours worked in the relevant week. The AMWU’s position is that that an employee working between 2:00am and 10:00am ought to be paid at the Agreement’s overtime rates for the first four hours between 2:00am and 6:00am, that is three hours at 150% and one hour at 200%, and ordinary rates for the remaining four hours between 6.00am and 10.00am. [9] Mission Foods does not dispute that if an employee works the shift as rostered from 2:00am to 2:00pm, the employee is entitled to be paid, and is paid, for 4 hours of overtime and 8 hours of ordinary time. It says this requirement upon employees every 13 weeks has previously been determined by the Commission to be reasonable overtime.2 Mission Foods says that when an employee requests to finish at 10.00am, it is with the full knowledge that the 8 hours worked will be treated and paid as ordinary time. [10] Mission Foods submits that Clause 13.1 of the Agreement confirms that as the hours of work are not in excess of 8 continuous hours on that day, there is no work that is considered to be overtime. Further, it submits the Agreement does not provide for any additional payment for working these hours. [11] Mission Foods does not dispute the Award is incorporated into the Agreement but relies on clause 5.3 of the Agreement in relation to the interaction. It says paragraph (c) of clause 5.3 specifically precludes any reliance on the Award for any “…wages, hourly rates, penalties, loadings, allowances, minimum entitlements or any other provision providing a monetary or related benefit…” [12] Mission Foods also says paragraph (d) of clause 5.3 specifically precludes any reliance on the Award “to restrict or limit the flexibilities, working arrangements and hours of work (including spread of hours, shifts overtime arrangements or other method of working hours no matter how described) established by the Agreement.” Mission Foods submits it is therefore not possible to turn to the Award to support an argument for payment of penalties in circumstances where the Agreement does not provide for any such payment. [13] The AMWU argues its position does not call for the provisions of the incorporated Award to “restrict or limit the flexibilities, working arrangements and hours of work” that are established in the Agreement. It says the 2:00am to 10:00am arrangement is not one that has been arrived at through the flexibility provisions of the Agreement. Further, the AMWU says it does not seek to restrict or limit the working arrangements or hours of work that are established in the Agreement because the 2:00am to 10:00am shift is not one that is contemplated in the Agreement. The AMWU also submits that its position is not inconsistent with clause 5.3(c) of the Agreement. It says its position is that the overtime rates set out in the Agreement ought to be paid to the employees who work from 2:00am - 10:00am for work performed outside the spread of hours of day shift. 2 AMWU v Gruma Oceania [2019] FWC 2655 at [15]. -- 3 of 7 -- [2021] FWC 1960 4 Consideration [14] The principles that apply to the interpretation of an enterprise agreement have been outlined by the Full Bench of the Commission in AMWU v Berri Pty Ltd3 (Berri), drawing on the earlier Full Bench decision in AMIEU v Golden Cockerel Pty Ltd.4 The Full Bench in Berri affirmed that the interpretation of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a dispute over the interpretation of an enterprise agreement will turn on the language of the agreement, having regard to its context and purpose. Context might appear from the text of the agreement as a whole, the disputed provision’s place and arrangement in the agreement, and the legislative framework under which the agreement was made.5 Berri further provides that the first task in construing an enterprise agreement is to determine whether an agreement has a plain meaning or is ambiguous or susceptible of more than one meaning.6 [15] The Agreement stipulates that ordinary hours of work for full time employees are an average of 38 hours per week and may be worked during five days of not more than eight hours on Monday to Friday inclusive.7 Shift hours are dealt with in Clause 12 of the Agreement as follows: “12.1 Shift Hours Shift arrangements will operate on the following basis: (a) Day shift may vary between the spread of hours of 6:00am to 6:00pm; (b) Afternoon shift is any shift where ordinary hours of work commence at or after 2:00pm and finish at or before midnight; (c) Night shift is any shift where ordinary hours of work commence at or after 10:00pm and finish at or before 6:00am. These shift arrangements may be altered following consultation between the Employer and affected Employee/s and by agreement between the Employer and the affected Employee/s. 12.1A Without limiting the operation of clause 12.1, the parties record that as at the date of this Agreement, rosters operate as follows: (a) Day shift: 6.00am to 2.00pm; (b) Afternoon shift: 2.00pm to 10.00pm; (c) Night shift: 10.00pm to 6.00am…” 3 [2017] FWCFB 3005. 4 [2014] FWCFB 7447. 5 [2017] FWCFB 3005 at point 1 in [114]. 6 Ibid at point 7 in [114]. 7 Clauses 11.2 and 11.6 of the Gruma Oceania Enterprise Agreement 2017. -- 4 of 7 -- [2021] FWC 1960 5 [16] Clause 13 of the Agreement has the title ‘Overtime Rates’ and relevantly provides: “13.1 Other than time that accrues towards an RDO, any time worked: (i) in excess of 38 hours per week; (ii) in excess of 8 continuous hours per day (exclusive of meal and rest breaks); or (iii) on a Saturday is considered overtime and will be paid at a rate of (a) 1.5 times the Employee's base rate of pay as set in clause 10.1 for the first 3.0 hours, and (b) 2 times the Employee's base rate of pay in clause 10.1 for any overtime in excess of 3.0 hours. Time worked on a Sunday is considered overtime and will be paid at a rate of 2 times the Employee's base rate of pay in clause 10.1. In computing overtime, each shift stands alone…” [17] Clause 5 of the Agreement deals with its relationship with other instruments and relevantly provides: “5.3 This Agreement incorporates the provisions of the Food, Beverage and Tobacco Manufacturing Award 2010 and, where applicable to Tradespersons only, the Manufacturing and Associated Industries and Occupations Award 2010, provided that: (a) The terms incorporated by reference are the Award terms in their operative form as varied from time to time; (b) Where a subject matter is dealt with in this Agreement, the Award does not apply and where there is an inconsistency between a term of this Agreement and an Award term, the term in this Agreement will prevail to the extent of the inconsistency; (c) No provision of an Award however applied will grant or vest any monetary or other benefit or entitlement in addition to the provisions set out in this Agreement with respect to wages, hourly rates, penalties, loadings, allowances, minimum entitlements or any other provision providing a monetary or related benefit; (d) No provision of an Award applies or operates to restrict or limit the flexibilities, working arrangements and hours of work (including spread of hours, shifts overtime arrangements or other method of working hours no matter how described) established by this Agreement; (e) Any incorporated Award terms are to be read as though a reference to “award” is a reference to this Agreement.” [18] I consider both Clause 5.3(b) and Clause 5.3(c) are fundamental in resolving this dispute. The AMWU submits that having regard to Clause 5.3(b) of the Agreement, the rate of pay applicable for work outside the spread of hours is a subject matter not dealt with in the Agreement and that its position is not inconsistent with clause 5.3(c) of the Agreement. Mission Foods submits overtime was dealt with to the extent the parties wanted it dealt with in Clause 13 of the Agreement and that Clause 5.3(c) of the Agreement precludes reliance on the Award insofar as it requires work performed outside the spread of hours to be paid at overtime rates. -- 5 of 7 -- [2021] FWC 1960 6 [19] The various clauses in the Agreement I have outlined or to which I have referred above at [14] – [16] establish that ordinary hours comprise no more than eight hours on Monday to Friday inclusive and that the Day Shift roster is 6:00am to 2:00pm. Additionally, Clauses 11.8 and 12.1 of the Agreement contemplate changes being made by agreement to the span of working hours and shift arrangements. Clause 13.1 of the Agreement deals with ‘Overtime Rates’ and stipulates that other than time that accrues towards an RDO, overtime is considered to be any time worked: (i) in excess of 38 hours per week; (ii) in excess of 8 continuous hours per day (exclusive of meal and rest breaks); (iii) on a Saturday; or (iv) on a Sunday. [20] While the AMWU contends that work outside the spread of hours (2:00am – 6:00am) must be paid at overtime rates, I am not persuaded by its submission that work outside the spread of hours is a subject matter not dealt with in the Agreement. In this regard, I observe the AMWU seeks to elevate work outside the spread of hours into a discrete subject matter when this is not how the Award treats it. Both the Agreement and the Award deal with the subject matter of Overtime. The context within which clause 12.2(e) of the Award (“any work performed outside the spread of hours must be paid at overtime rates…”) operates is that which is outlined in Clause 23 of the Award – ‘Overtime’. Clause 23.1(a) of the Award states “Overtime work is any work performed outside the ordinary hours on any day or shift as defined by clauses 12.2, 12.3 and 12.4”. Clause 13 of the Agreement deals with ‘Overtime Rates’ by defining what times worked will be considered overtime and then outlining the rate of pay applicable to them. In doing so, Clause 13 has dealt with the subject matter of Overtime by not including the circumstances in clause 12.2(e) of the Award. With the Agreement having dealt with Overtime in the manner outlined in Clause 13, Clauses 12.2(e) and 23.1(a) of the Award do not apply by virtue of 5.3(b) of the Agreement. [21] Further, in circumstances where the Clause 13 of the Agreement does not provide for overtime penalty rates of pay for work performed outside the spread of ordinary hours, Clause 5.3(c) of the Agreement plainly operates to prevent the application of Clauses 23.1(a), 12.2(e) and 23.2 of the Award, which do. Conclusion [22] The task the parties have asked me to discharge is one of interpreting the Agreement they have produced. In this matter, the dispute concerns the appropriate payment for employees when they commence a shift of work at 2:00am and finish at 10:00am. I have not been persuaded that an employee who commences work at 2:00am on a Monday and elects to finish at 10:00am is not working only ordinary hours and has an entitlement under the Agreement to be paid at overtime rates between 2:00am and 6:00am. -- 6 of 7 -- [2021] FWC 1960 7 [23] I therefore answer the questions the parties have asked me to determine as follows: “In circumstances where a day worker who is required to commence work at 2:00am requests that his/her work finishes at 10:00am, and the employer agrees: 1. Is the employee entitled under the Agreement to be paid eight hours at ordinary rates only?  Yes 2. If the answer to question 1 is no, what is the employee entitled to be paid under the Agreement?  Not necessary to answer. DEPUTY PRESIDENT Appearances: J Gardner for the AMWU. D McLaughlin for Gruma Oceania Pty Ltd T/A Mission Foods. Hearing details: 2021. Melbourne (via video on Microsoft Teams): March 19. 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