WESTERN AUSTRALIAN INDUSTRIAL MAGISTRATES COURT

CITATION : 2019 WAIRC 00880

CLAIMANT

AND

Vesco Foods Pty Ltd, trading as Vesco Foods

CatchWords : INDUSTRIAL LAW – Application of clause 33.1(e) of the Food, Beverage and Tobacco Manufacturing Award 2010 – Determinations on quantum

Instruments : Vesco Foods Pty Ltd (Production Employees, Western Australia) Enterprise Agreement 2017 (Cth)

Food, Beverage and Tobacco Manufacturing Award 2010 (Cth)

Result : Determinations made

Representation:

Claimant : Mr C. Young (industrial officer)

Respondent : Mr J. Raftos (of counsel) as instructed by Minter Ellison

SUPPLEMENTARY REASONS FOR DECISION

1         On 21 August 2019, the Industrial Magistrates Court of Western Australia (IMC) delivered its reasons for decision in answering specified questions for determination identified by the parties (Reasons for Decision).

2         The purpose in answering the parties’ questions was to resolve the Australian Workers' Union’s (the claimant) claim (on behalf of an employee) where the IMC understands that there are other similar claims. In part, the intention was for the parties to use the methodology in the Reasons for Decision to quantify the claimant’s claim and potentially in any other similar claim.

3         To that end, following publishing of the Reasons for Decision the IMC informed the parties that, if necessary, rulings could be given with respect to quantum. It has now become necessary to give a ruling. It is not an opportunity for the parties to relitigate the original questions for determination, although in saying that, arguably, a new issue has been identified by Vesco Foods Pty Ltd, trading as Vesco Foods (the respondent).

4         The parties lodged submissions in the IMC, including example calculations relevant to the Example Week.

5         These supplementary reasons are limited to ruling on issues of quantum raised by the parties and should be read in conjunction with the Reasons for Decision.

6         In the Reasons for Decision, I found that had Deng Atack Ken Agany (Mr Agany) been paid for work undertaken in the Example Week by reference to the Vesco Foods Pty Ltd (Production Employees, Western Australia) Enterprise Agreement 2017 (Cth) (Agreement) he would have been paid $1,412.14.

7         The respondent paid $1,444.81 to Mr Agany in the same week.1

8         In Table 5 of Schedule IV of the Reasons for Decision, I set out the calculation of what Mr Agany could have expected to be paid had the Agreement been applied consistent with the undertakings and the applicable award, namely the Food, Beverage and Tobacco Manufacturing Award 2010 (Cth) (Award).

9         The purpose of Table 5 of Schedule IV of the Reasons for Decision was to identify any potential shortfall, consistent with the Reconciliation Undertaking and the decision by Commissioner Gregory on 18 August 2017 that the undertakings will not cause financial detriment to any employees covered by the Agreement.

10      The IMC found that a shortfall did exist, but the parties now dispute the amount of the shortfall and, further, the computation of the shortfall.

Question For Determination On Quantum

11      The principal question for determination is the amount of the shortfall referrable to the Example Week.

12      To answer that question the IMC is asked to consider the effect of cl 33.1(e) of the Award on the computation in Table 5 of Schedule IV of the Reasons for Decision, specifically as it relates to overtime paid on Saturday in the Example Week.

13      I have inserted into these reasons Table 6 at Schedule IV which reflects the respondent’s alternative calculation with the amended calculation on Saturday.

14      If the respondent’s contention is accepted, the effect of the amended calculation in Table 6 of Schedule IV of these reasons is to reduce the shortfall payment to Mr Agany in the Example Week by approximately $30 (from $1,559.17 to $1,528.75).

15      A second question for determination is the amount to be paid in week 28 where Mr Agany worked 37.6 hours on weekdays and then worked 8.5 hours on Saturday. The respondent says 0.4 hours of the hours worked on Saturday should be paid at ordinary rates of pay (or in the alternative at time and a half of the ordinary rates of pay). The claimant says 0.4 hours of the hours worked on Saturday should be paid at double time.

Claimant’s Contentions

16      The claimant contends that:

(a)     clause 33.1(e) of the Award has no effect on the computation in Table 5 of Schedule IV of the Reasons for Decision where cl 33.1(a) of the Award provides that ‘…the overtime rate is 150% for the first three hours and 200% thereafter until the completion of the overtime work…’ (emphasis added);

(b)     the IMC’s conclusion at [99] of the Reasons for Decision is correct and cl 33.1(e) of the Award does not undermine the IMC’s reasons; and

(c)     when read as a whole, cl 33.1(a) to cl 33.1(e) ‘make sense’ as each subclause deals with a different subject matter.

Respondent’s Contentions

17      The respondent contends that:

(a)     any calculation of overtime in the Example Week must have regard to the way overtime is calculated under the Award in order to determine whether a shortfall exists and, if it does, by how much and, therefore, cl 33.1(e) of the Award is relevant to that calculation;

(b)     the IMC in its reasons did not consider the effect of cl 33.1(e) (if any); and

(c)     the effect of cl 33.1(e) is to limit the payment of applicable overtime rates to day by day – the computation for Saturday in Table 6 of Schedule IV of these reasons versus the computation for Saturday in Table 5 of Schedule IV of the Reasons for Decision demonstrates how cl 33.1(e) operates.

The Agreement and Associated Undertakings

18      It is useful to restate the relevant undertakings in the Agreement:

Base rates of pay

Notwithstanding the base rates of pay in Schedule 1 of the Agreement, employees will receive at least the base rate of pay in Food, Beverage and Tobacco Manufacturing Award 2010 (Award) or the rate set out in the Agreement relevant to their classification, whichever is the higher rate.

Overtime

Employees who are required to work overtime will receive at least the amount that they would receive under the Award for working the same hours, calculated on a weekly basis.

Overtime – part-time employees

Part-time employees are entitled to overtime rates (to be paid in accordance with the overtime undertaking above) for hours worked in excess of their agreed hours, calculated on a weekly basis.

Reconciliation

Vesco Foods Pty Ltd will establish a system to ensure that any shortfalls in payments to employees arising from the Overtime, Overtime – part-time employees, and Allowances undertakings are reconciled and paid to employees at the following frequency (remainder omitted).

19      Clause 17 of the Agreement outlines the payment of overtime and penalty rates, relevantly, as follows:

17.1.         If an Employee works more than 38 hours in one weekly pay period, inclusive of paid leave entitlements (leave omitted), then the additional hours will be paid as follows:

a)   38.01 to 45.0 hours – the Employee’s Base Rate plus 50% penalty.

b)   45.01 hours to 55.0 hours inclusive – the Employee’s Base Rate plus 65% penalty.

c)    55.01 hours and above – the Employee’s Base Rate plus 81% penalty.

17.3.         If the Employer requires an Employee to work on a Saturday, the Employee shall be paid time and a half the Employee’s Base Pay Rate for all hours worked, and the total hours are included in the minimum rostered hours for the week.

17.7.         All hours worked after 6.00pm and before 10.00pm Monday to Friday will be paid at an additional 15% of the Employee’s Base Rate. This 15% will be known as Shift Allowance 1 and will not be payable when either penalty rates or overtime rates are applied to these hours worked.

17.10.     Refusal to Work Overtime

It is a term of this agreement that employees will make themselves available to work reasonable overtime in order to meet the operational requirements of the Employer. Where practical, employees will be notified of the requirement for overtime within the first 3 hours of the shift.

The Award

20      Clause 33.1 of the Award provides for the payment of overtime as follows:

(a)      Except as provided for in clauses 33.12, 33.1(d), 33.7 and 33.8, for all work done outside ordinary hours on any day or shift, as defined in clauses 30.2, 30.3 and 30.4, the overtime rate is 150% for the first three hours and 200% thereafter until the completion of the overtime work. For a continuous shift worker the rate for working overtime is 200% (emphasis added).

(b)      For the purpose of clause 33 – Overtime, ordinary hours means the hours worked in an enterprise, fixed in accordance with clause 30 – Ordinary hours of work and rostering.

(c)      …

(d)      …

(e)    In computing overtime each day’s work stands alone.

21      The Award terms are not readily referrable to the Agreement terms. However, the Agreement, provides at cl 4.3 ‘[t]his Agreement operates to the exclusion of any modern award or other industrial instrument’.

22      The purpose of the Award is to reconcile certain allowances under the Agreement to ensure employees are not worse off financially, but this can only be done in the context of the Agreement terms applicable to the employee.

23      The Award terms cannot otherwise be shoehorned in to the Agreement. By way of example, Mr Agany does not work ‘ordinary hours’ as that term is generally understood in cl 30.2(b) and cl 30.2(c) of the Award. That is, Mr Agany does not work Monday to Friday (and thereafter with agreement on Saturday or Sunday) with a spread of hours from 6.00 am to 6.00 pm. As specified in the Agreement, Mr Agany’s ordinary hours of work are shifts commencing Monday to Saturday based on a production roster where the maximum length is 12 hours: cl 12 of the Agreement.

24      Therefore, certain terms of the Award may have a different effect on an employee who works ordinary hours as contemplated under cl 30.2 of the Award to that of Mr Agany and the ordinary hours (or agreed hours) worked by him under the Agreement.

25      Clause 33.1(e) of the Award, as it applies to an employee working overtime under the Award, appears to reset overtime each day, possibly because it anticipates an employee working defined ordinary hours within the defined spread of hours between 6.00 am and 6.00 pm. Thereafter, the employee is eligible for overtime outside of ordinary hours. The requirement for a rest period after overtime seems to support this interpretation: cl 33.3 of the Award.

26      While this interpretation might appear to conflict with cl 33.1(a) of the Award as it relates to Mr Agany and the Example Week, in my view, it does not conflict when applied in the context of cl 12 of the Agreement and the hours worked by Mr Agany.

Application Of Cl 33.1(a) And Cl 33.1(e) Of The Award To The Example Week

27      In the Example Week, Mr Agany commenced working in excess of 38 hours on Friday after 0.5 hours. Thereafter, he continues to work overtime for the remainder of the week until he finished on Saturday at 11.30pm (recalling that for the Example Week the published weekly agreed hours were 60 hours of which he was paid 56 hours of which 18 hours was overtime pursuant to cl 17.1 of the Agreement).

28      Having regard to the analysis in the Reasons for Decision at [94] to [99], in the Example Week, Mr Agany never resets overtime in the manner envisaged if he was employed under the Award and he continues to work until the completion of the overtime work in that week.

29      When viewed in this context, cl 33.1(a) and cl 33.1(e) of the Award operate such that each day Mr Agany works overtime in the Example Week does, in fact, stand alone, but he has already exhausted the ordinary hours contemplated under cl 17.1 of the Agreement and only ever works in excess of that on Friday and Saturday of the Example Week (save for 0.5 hours on Friday).

30      Therefore, in my view, in the Example Week there is no tension between cl 33.1(a) and cl 33.1(e) of the Award where Mr Agany works continually in excess of his agreed hours (which are also his ordinary hours) for the week and the whole of remaining time after, this is overtime.

31      The outcome is that the calculation in Table 5 of Schedule IV of the Reasons for Decision (and not the alternative calculation in Table 6 of Schedule IV of these reasons) is the applicable calculation with the effect that the amount Mr Agany would have been paid under the Award (referrable to the Agreement and to the undertakings) is $1,559.17.

Payment For Week 28

32      For the following reasons I find that the disputed 0.4 hours worked on Saturday in week 28 should be paid at time and a half of the ordinary rates of pay (150%):

• the starting point is contained in cl 17.3 of the Agreement, which provides that if the employer requires an employee to work on a Saturday, the employee shall be paid time and a half of base rate of pay for all hours worked, and the total hours are included in the minimum rostered hours for the week;
• thus, while the ordinary hours in cl 12 of the Agreement includes shifts on a Saturday (based on a production roster), penalty rates in cl 17.3 of the Agreement apply to the Saturday shift;
• reference to the Award applies for the purposes of reconciling any shortfall (if there is any). In week 28 it is assumed the agreed hours were approximately 49.1 hours of which hours worked in excess of 38 hours are overtime hours under the Agreement;
• however, 0.4 of those overtime hours were worked on Saturday and cl 17.3 of the Agreement applies in any event;
• referrable to cl 30.2(b) and cl 30.2(e) of the Award, had Mr Agany worked ordinary hours (by agreement) between midnight on Friday and midnight on Saturday he would have been paid 150% (or time and a half) in any event; and
• therefore, in my view, in respect of the 0.4 hours worked on Saturday in week 28, the Award and the Agreement have the same effect, that being the rate of pay is time and a half irrespective of whether it is under 38 hours (noting also that the time falls within the first three hours under cl 33.1(a) of the Award).

Result

33      The following determinations on quantum apply:

• The calculation in Table 5 of Schedule IV of the Reasons for Decision is maintained.
• 0.4 hours worked on Saturday in week 28 should be paid at time and a half of the ordinary rates of pay.

34      I will hear from the parties in respect of orders to be made.

D SCADDAN

INDUSTRIAL MAGISTRATE

1Table 1 in Schedule IV of the Reasons for Decision as replicated at the end of these supplementary reasons.

Schedule IV – Tables Of Calculations

Table 1: The respondent’s actual payment to Mr Agany

Table 5: IMC’s calculation of overtime in accordance with the Agreement (consistent with the undertakings and the Award)

SA1 = Shift Allowance 1 pursuant to cl 17.7 of the Agreement

SA2 = Shift Allowance 2 pursuant to cl 17.8 of the Agreement

OT1, OT2 = Overtime pursuant to cl 33.1(a) of the Award

Table 6: Alternative calculation of overtime by the respondent