Automotive, Metals, Engineering, Printing and Kindred Industries Industrial Union of Employees, Queensland & Anor v Australia Meat Holdings Pty Limited [2001] QIRC 181 (2001) 168 QGIG 241

9 November, 2001 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 241 no.10 09.11.01 QUEENSLAND INDUSTRIAL RELATIONS COMMISSION Industrial Relations Act 1999 – s. 220(3)(b) – arbitration Automotive, Metals, Engineering, Printing and Kindred Industries Industrial Union of Employees, Queensland and Another AND Australia Meat Holdings Pty Limited (Nos. B766 and B827 of 2001) AUSTRALIA MEAT HOLDINGS – DINMORE MAINTENANCE – CERTIFIED AGREEMENT 2000 COMMISSIONER BROWN 26 October 2001 DECISION The applications in the above matters related to claims by the applicant unions that the Australia Meat Holdings– Dinmore Maintenance – Certified Agreement 2000, CA 540 of 2000 (the Certified Agreement 2000) be interpreted in a particular fashion with respect to the accumulation of and payment of annual leave. The matters were first before the Commission in a conference, D410 of 2000, which was convened as a result of a notification of dispute by the Automotive, Metals, Engineering, Printing and Kindred Industries, Industrial Union of Employees, Queensland (AMEPKU). Mr I. McComb represented the AMEPKU and also registered an appearance on behalf of The Electrical Trades Union of Australia, Queensland Branch (ETU). The dispute remained unresolved. At the hearing there was some preliminary argument regarding the adequacy of the applications. Eventually the parties agreed that the matters would be dealt with by interpretation of the Certified Agreement 2000 in line with s. 284 of the Industrial Relations Act 1999 (the Act). Leave to amend the applications was granted. The issues to be determined are whether or not a week’s holiday pay is 42 hours pay or 40 hours pay and whether leave accumulated at 210 hours per year or 200. The issue of how leave taken would be debited against accumulated hours was resolved by agreement. The differences arise from a belief by the unions that because the employees in question, 7 day rotating shift workers, work in accordance with the Certified Agreement 2000 to a roster cycle which delivers 42 hours each week, then a week’s annual leave should be made up of 42 hours pay and not 40 as contended by Australia Meat Holdings Pty Limited (the respondent). The Unions presented evidence from witnesses Ross Saverin, AMEPKU Shop Steward, Merv Richards employee of the respondent and Neil Bennett, Special Class Electrician and ETU delegate. Witnesses for the respondent were John Hughes, General Manager – Abattoirs, Industrial Relations and Personnel (via telephone), Neil Brereton, Group Engineer and Neville Tame, Assistant General Manager, Industrial Relations and Personnel. The main points of Ross Saverin’s evidence were:– • He had been involved in the Certified Agreement 2000 discussions; • His clear recollection of discussions regarding clauses 16 and 24 was that the work rosters would average 42 hours per week; and • He had recalled an explanation given to him by Hughes in the presence of Tame was that annual leave would be 5 weeks at an average of 42 hours. And in cross-examination – • The Certified Agreement 2000 was in effect the 1998 Agreement with negotiated changes; • A 7 day rotating roster was the main issue; • Employees voted in favour of the Certified Agreement 2000; • The change to Public Holiday provisions in exchange for 5 weeks annual leave was discussed; • Members in taking a vote at a report back meeting did not discuss how the leave would be taken – how many hours or anything else; • John Hughes during a white board exercise stated that annual leave would accumulate at 42 hours; • Under the 1998 Agreement leave was debited at 8 hours per day taken; • He did not recall detailed discussions occurring in the 1998 Agreement regarding how leave was to be accrued; • He agreed that overtime and other overaward payments were rolled up into one all-purpose rate under this new Agreement; • The explanatory document prepared by the Respondent was not considered by employees before the first vote; he agreed that there was no agreement on the question of whether annual leave accumulated on the basis of 40 or 42 hours; and • He agreed that a reasonable term to describe an hour’s pay under the Certified Agreement 2000 would be “ the loaded rate” and “the loaded rate” compensates for overtime. Merv Richards gave evidence that he was advised on applying for leave that the respondent accumulated annual leave of 5 weeks at an average of 42 hours per week which worked out to 210 hours for 5 weeks. However, under cross-examination, Mr Richards conceded the leave sought may have been subject to the 1998 Agreement. Mr Bennett made the following points in his evidence:– • There were detailed discussions on the subject of working hours during the Certified Agreement 2000 negotiations; • Agreement was reached on 7 day rotating shifts which averaged 42 hours per week; • His impression from meetings and negotiations was that the new annual leave entitlement was 5 week’s leave at an average of 42 hours per week; and • He was later advised by the respondent that this was incorrect. Mr Hughes gave evidence that at no time during the Certified Agreement 2000 negotiations did the respondent agree or even discuss the possibility of increasing the weekly entitlement to annual leave from 40 hours per week to 42 hours per week. He maintained that in respect of 7 day rotating roster employees, the respondent’s agreement to allow 5 week’s annual leave in exchange for changes to the public holidays provision was always on the basis -- 1 of 3 -- 242 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 9 November, 2001 that the entitlement to annual leave was based on 40 hours per week (as it was under the 1998 Agreement). The white board exercise was about taking leave and not accumulation. Mr Tame and Mr Brereton gave evidence in the same vein as Mr Hughes and confirmed the respondent’s position as to its interpretation of the annual leave provisions (5 weeks based on 40 hours per week at the all-purpose rate). Brereton admitted to having misunderstood that issue previously. Simply put the unions maintain that if an employee is entitled to 5 weeks annual leave (as per clause 24.1.2) based on the average hours worked, the employee’s pay for the period of the leave should be paid on the basis of 42 ordinary hours per week, which equates to 210 hours for 5 weeks. The respondent relied on the provisions of clause 16.1 (Ordinary Hours of Work) which state that the ordinary hours per week shall be 40, Monday to Sunday inclusive. Also clause 24.7.1 which states that payment for annual leave shall be on the basis of the employee’s all purpose weekly rate of 40 ordinary hours worked. The respondent claimed that the effect of the provisions of the Certified Agreement 2000 is that employees on the 7 day rotating roster are entitled to 5 week’s leave based on 40 ordinary hours per week or 200 hour’s annual leave. Conclusions From the evidence it was apparent that whilst the parties had formed and held particular views of how annual leave would accumulate and be paid, there was no discussion in the lead up to the certification of the Agreement that specifically focused on those issues. In fact, neither party was aware of the other’s position until well after the certification of the Certified Agreement 2000. In evidence and the material presented a number of terms were used to describe the hours of work of the employees in question, namely, ordinary time, ordinary hours, rostered hours, average hours and regular hours. The true nature of the working hours, which determine the rate of accumulation of hours for annual leave and payment for annual leave, is to be found in the Certified Agreement 2000. The Certified Agreement 2000 at clause 24 (Annual Leave) states (inter alia)– “24.1 An employee, other than a casual employee, shall at the end of each period of 12 months continuous service be entitled to annual leave as follows: 24.1.1 Not less than 5 weeks if employed on shift work where continuous shifts per day are worked over a period of seven days per week; or 24.1.2 Not less than four weeks in any case.”. The employees concerned are governed by the provisions of clause 24.1.1, i.e. entitled to 5 weeks per year annual leave. “Week” is defined as Monday to Sunday inclusive. This definition does not assist the Commission. The all-purpose weekly rate set out in the Certified Agreement 2000 is, in fact, a loaded rate as described in clause 19.2 as follows:– “19.2 The rates contained in sub clause 19.1 incorporate all award, over award and non award payments which might otherwise be payable. Without limiting the generality of this definition, the weekly rate, or ordinary hourly rate is payable in lieu of any and all entitlements by way of wages (for 40 hours per week), allowances (other than call back and tools of trade), loading, special rates and disability allowances or any other additional allowance or payments provided for in any award, agreement or the Act including all site allowances or payments not provided for in any previous award or agreement.”. The ordinary hourly rate for these employees is arrived at by dividing the loaded weekly rate by 40. Clause 17 (Overtime-Additional Hours) provides that all hours worked in excess of the ordinary hours of work as provided for in clause 16 shall be paid at the ordinary hourly rate. Subclause 1 to 4 of clause 16 (Ordinary Hours of Work) reads as follows:– “16.1 The ordinary hours of work of an employee, other than a part-time or casual employee, shall be 40 hours per week as required by the company, Monday to Sunday inclusive. 16.2 Each employee on a seven day rotating roster shall work additional hours as required by the company so as to average a minimum of 42 hours per week. 16.3 Notwithstanding the provisions of 16.1 and 16.2, each employee shall work additional hours in excess of their ordinary hours of work per week as required by the company. 16.4 All hours worked by an employee shall be paid at the ordinary hourly rate. This includes hours worked in excess of an employee’s ordinary hours of work on any day of the week.”. Clause 24.7 (Payment for Annual Leave and Loading) provides payment for annual leave on the basis of the employee’s all-purpose rate for 40 ordinary hours in respect of which leave is accrued or proportionate payment due. In many awards ordinary weekly hours of work as varied have been used for the calculation of annual leave accruals and payment, e.g. where a 35 or 38 hour week exists the accumulation and payment is at 35 or 38 where once it was 40. It would therefore follow that it would be acceptable and indeed appropriate that where the ordinary hours are varied so that 42 ordinary hours are worked that leave accumulates and is paid at 42 hours per week. Unfortunately for the applicant unions in these matters, that is not the case. -- 2 of 3 -- 9 November, 2001 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 243 I find that the ordinary weekly hours of the employees concerned is 40 (see clause 16.1) and that the extra time worked so as to average 42 hours per week is “additional hours” as referred to in clause 16.2 and not ordinary hours. As the additional hours are in excess of 40, they are, in my view, dealt with in terms of payment firstly by clause 17 (Overtime) and secondly by clause 19.2 the explanation of the make up of rates of pay included in clause 19.1. I find that annual leave accumulates at the rate of 40 hours per week and in this case for 5 weeks per year and that payment for a week’s annual leave must be made in accordance with clause 24.7, i.e. at the “all-purpose weekly rate” contained in clause 19 of the Certified Agreement 2000 as varied from time to time. Further, that the hourly rate for the calculation of pro rata leave for theses employees is the “all purpose rate” divided by 40. That is also listed in the table in the column headed “Weekly ordinary hourly rate” in clause 19 (Rates of Pay). Order accordingly. D. K. BROWN, Commissioner. Appearances:– Mr B. Burton for the Automotive, Metals, Engineering, Printing and Kindred Industries Industrial Union of Employees, Queensland. Ms K. Inglis for The Electrical Trades Union of Employees of Australia, Queensland Branch. Ms J. Sharpe for Australia Meat Holdings Pty Limited. Released: 26 October 2001 ########################################################################################################################## -- 3 of 3 --