DECISION

Fair Work Act 2009
s.156—4 yearly review of modern awards

Four yearly review of modern awards—Black Coal Mining Industry Award 2010
(AM2020/25)

4 yearly review of modern awards – finalisation of Exposure Drafts and draft variation determinations – Tranche 3 awards – Black Coal Mining Industry Award 2010.

[1] In our decision of 18 November 2020¹ (November 2020 decision) in relation to the 4 yearly review of the Black Coal Mining Industry Award 2010 (Black Coal Award) we dealt with two outstanding issues. The first concerned the rates of pay applicable to shift workers in Schedules C and D engaged in weekend work. The second concerned the rates of pay for work on a public holiday. We decided that any necessary variations to clause 29 of the Exposure Draft to give effect to our decision should be considered in conjunction with variations which will be settled in a conference to be convened by Commissioner Bissett. Arising from the conference, directions were issued for further submissions to be filed addressing the issue whether penalties for weekend work and shift work under the Black Coal Award compound with the casual loading.

[2] In the 4 yearly review of Modern Awards – Overtime for casuals decision (Overtime for casuals decision)² issued in August 2020, a Full Bench of the Commission determined that the overtime rates compounded with the casual rate of pay for ordinary hours in the Black Coal Award³ - that is the overtime rate of “time and a half” and “double time”⁴ was applied to the loaded casual rate for ordinary time. As a result, a question arose whether the weekend penalty rate and shiftwork penalties also apply on a compounding basis to the casual loaded rate.

[3] Submissions addressing this issue were received from the CFMMEU 5, CEPU6, APESMA - Collieries Staff Division7, the Ai Group8 and CMIEG9. These are summarised below. No interested party sought a further oral hearing. Accordingly, we will determine the issue on the papers.

Summary of submission of interested parties

CFMMEU

[4] The CFMMEU contends (and the CEPU agrees) in summary that:

•  The Overtime for casuals decision determined that the casual loading was to be paid when overtime was worked and it should be calculated on a compounding (not cumulative) basis; 10

•  In considering shiftwork penalties in the Black Coal Award (November 2020 decision) the Full Bench constituted found that such penalties should be paid in addition to the relevant ordinary hourly rate; 11

•  The November 2020 decision did not consider how the casual rate and shift penalties should be calculated when applied together although the Full Bench expressed a preliminary view at [60]; 12

•  The Black Coal Award confers an entitlement for “all ordinary hours worked” by an employee of “time and a half” for the first 4 hours on a Saturday and of “double time” after 4 hours on a Saturday and for all hours on a Sunday; 13

•  The casual loaded rate in clause 10.4(b) is the ordinary rate of pay for a casual employee¹⁴ and the approach in Australian Nursing and Midwifery Federation v Domain Aged Care (QLD) Pty Ltd T/A Opal Aged Care (Domain)¹⁵ should be directly applied, that is the penalties in clause 21.2 should be applied to the casual loaded rate; and 16

•  As to shift work in clause 22.2 of the Black Coal Award the “ordinary rate of pay” for a casual employee is, in essence, the same as the “ordinary time rate” as described in the November 2020 decision.¹⁷ It follows that the “ordinary time rate” for a casual employee is the loaded rate under clause 10.4(b). 18

[5] CFMMEU proposes two alternative drafting options to resolve the issue in the Exposure Draft – either by removing casual penalty rates from clauses 23.1 and 23.2 of the Exposure Draft or, by adjusting the rates set out in paragraph [60] of the November 2020 decision to reflect the compounding nature of the penalties. 19

[6] As to the submissions of Ai Group and CMIEG (summarised further below) the CFMMEU contends that the Ai Group submissions should be rejected because:

•  CFMMEU did, in its March 2020 submissions, seek to have weekend and shift penalties paid on the ordinary time rate; 20

•  Later CFMMEU submissions on shiftwork and weekend rates were in response to a question as to whether shiftwork rates applied when an employee was in receipt of weekend penalties; 21

•  The Overtime for casuals decision had not been issued at the time CFMMEU made its submissions on the Black Coal Award but CFMMEU has consistently maintained that the ordinary time rate for casual employees includes the 25% loading; 22 and

•  The Ai Group do not argue that the penalties should not compound but rather that it would be unfair. This argument ignores the Overtime for casuals decision and the November 2020 decision. 23

[7] CFMMEU contends that:

•  the CMIEG submission places too much weight on the significance of the word “plus” in clause 10.4(b) and in the Coal Mining Industry (Staff) Award 2004 (Staff Award). It says that while “plus” can mean “in addition to” it can also mean “an additional quantity”, “additional, extra” and “having gained”. It submits that the 25% does not sit as an outlier, detached from the 100% by virtue of the word “plus”. By virtue of the Overtime for casuals decision 125% is the ordinary rate of pay; 24 and

•  the CMIEG give the word “plus” too much work to do “not borne out of an historical industrial context but of a confined interpretive argument.” It says that the use of the word “plus” in clause 10.4(b) of the Black Coal Award has been used exactly in the way interpreted by this Full Bench which is to incorporate the 25% into the casual employee’s rate of pay. 25

APESMA

[8] AESMA submits that:

•  Shiftwork penalties are calculated on the ordinary time rate; 26

•  The ordinary time rate is the applicable rate for working ordinary time as set out in clause 21.2 of the Black Coal Award; 27

•  The ordinary time rate for shift penalties is based on the rate payable for particular days; 28

•  The phrases “time and a half” and “double time” in clause 21.2 of the Black Coal Award should be treated consistently with the meaning ascribed to those phrases in the Overtime for casuals decision when used in clause 17.2, noting that the only caveat that the Full Bench placed on such an approach was if there was something in the text or historical context that would suggest an alternative approach; 29

•  There is nothing in the text or historical context of the Black Coal Award which excludes the casual loading from the rates in clause 21.2; 30 and

•  The ordinary time rates in clause 21.2 of the Black Coal Award are calculated on the casual loaded rate and this rate is then used to determine shift work rates for casuals under clause 22.2. 31

[9] As to the submission of Ai Group and CMIEG (summarised below) APESMA contends that:

•  Ai Group accept that there are no contra-indicators to suggest that overtime should not apply on a compounding basis with respect to the casual loading but says that it is different when it comes to weekend and shift penalties. There is tacit acceptance by Ai Group that the approach in Yallourn/Domain adopted in the Overtime for casuals decision should apply unless the text of the award or the historical context suggest otherwise and Ai Group has not provided any basis for a conclusion that the Yallourn/Domain approach should not apply; 32 and

•  Reliance by the CMIEG on the word “plus” in clause 10.4(b) of the Black Coal Award and in the Staff Award to mean that it should be added, and not compounded with the casual loading, is not supported by the decision in AMWU v Energy Australia Yallourn Pty Ltd (Yallourn),³³ where the Full Bench considered a clause in not dissimilar terms to that in the Black Coal Award. 34

Ai Group

[10] Ai Group submits that:

•  CFMMEU did not argue in its Aril 2020 submissions that the rates should be compounding and its proposal at the time accepted that the “ordinary time rate” did not include the casual loading (i.e. the rates were cumulative, not compounding); 35

•  The Full Bench in the November 2020 decision³⁶ decided to utilise the “minimum hourly rate” as the reference rate;³⁷

•  The CFMMEU’s claim at this stage that the rates should be compounding should be treated as a new claim; 38

•  As to the Overtime for casuals decision the Ai Group says that the Yallourn/Domain³⁹ approach only applies where there are no “textual contra-indicators.”⁴⁰ It says that:

◦  this Full Bench agreed, however, to the concurrent payment of weekend and shift penalties;  41 and

◦  if weekend and shift penalties are both calculated on the casual loaded rate this will result in double counting and will be unfair. 42

CMIEG

[11] CMIEG supports the submissions of the Ai Group.  43 It also says that in the Black Coal Award and the predecessor Coal Mining Industry (Staff) Award 2004 (Staff Award) the terminology used in the clause in relation to casual employment is that a casual employee is be paid 1/35^th of the appropriate weekly rate plus a loading of 25%.44 “Plus”, it submits, means in addition to the rate and does not mean the loading is incorporated into the rate.45

[12] The terms “double time”, “time and a half” and “ordinary time” were all used in the Staff Award. Given the casual loading is additive there is no warrant to construe the “ordinary time rate” as including the 25% loading for the purpose of calculating penalties because the casual loading is in addition to the weekly rate, not built into it.  46 These historical provisions are contra-indicators that the ordinary time rates for casual employees should be inclusive of the 25% loading.47

[13] CMIEG also contends that the purpose of the casual loading is to compensate a casual employee for the benefits of permanent employment foregone. Given this purpose it does not follow that the compensatory benefit should compound by the performance of shift or weekend work. CMIEG accepts that casuals should receive compensation for working unsociable hours on weekends and for shift work but this should be in addition to permanent benefits foregone. This is achieved by paying shift and weekend penalties as additive to the casual loading and not compounding. 48

Consideration

[14] As with the resolution of the various issues in our November 2020 decision, the issue of whether penalties for weekend work and shift work compound with the casual loading turns on a proper construction of various provision of the Black Coal Award.

[15] Clause 21 of the Black Coal Award provides:

21. Ordinary hours of work

21.1 The ordinary hours of work will be an average of 35 hours per week. Those hours will be averaged over the roster cycle.

21.2 All ordinary hours worked by an employee on the following days will be paid for at the following rates:

[16] Clause 22.2 deals with shiftwork rates and provides:

22.2 Shiftwork rates

Rates for shiftwork are payable as follows:

[17] It is convenient here to set out our analysis of these provisions in the context of the Black Coal Award as a whole from our November 2020 decision:

“[47] Clause 22.2 of the Black Coal Award sets out the rates payable under the award for shiftwork. Relevantly clause 22.2 provides that for “Day shift” the rate payable is “Ordinary time”; for “Afternoon and rotating night shifts” the rate payable for “Ordinary hours” is “115% of the ordinary time rate”; and for “Permanent night shift” the rate payable for “Ordinary hours” is “125% of the ordinary time rate”. The reference in clause 22.2 to “ordinary time” and to “ordinary time rate” appears to us clearly to be a reference to the rate that is payable for employees for working ordinary hours under the Black Coal Award.

[48] Clause 21.1 of the Black Coal Award provides that the “ordinary hours of work will be an average of 35 hours per week” and that these hours will be averaged over the roster cycle. Clause 21.2 sets out the rates that are to be paid for “ordinary hours” worked on particular days. Ordinary hours worked on Monday to Friday are to be paid at “single time”. The first 4 hours of ordinary hours worked on Saturday are to be paid at “time and a half” and the remainder at “double time”. All ordinary hours worked on a Sunday are to be paid at “Double time”. The use of terms such as “single time”, “time and a half” and “double time” in clause 21.2, stand in contrast to the terms deployed in clause 22.2 of “ordinary time” or “ordinary time rate”. But it is evident that each term refers to a rate of pay.

[49] As should be clear from clause 21.2, the Black Coal Award does not fix a single rate for working ordinary hours or for fixing the rate of “ordinary time” or the “ordinary time rate”. The rate payable for working ordinary hours depends upon the day on which ordinary hours are worked.

[50] Clause 3 of the Black Coal Award, which contains definitions, does not carry any definition of “ordinary time” or of “ordinary time rate”. It defines “ordinary week’s pay” as the amount in the total payment column for the award classification rate in respect of 35 ordinary hours, but that phrase is used only once in the Black Coal Award for the purpose of delineating an employee’s severance pay entitlement in clause 14.3 as one “ordinary week’s pay” for each completed year of employment.

[51] Clause 3 of the Black Coal Award also contains a definition of “base rate of pay” which is defined as meaning the rate of pay payable to an employee for their ordinary hours of work, but not including any of the following:

•  loadings;

•  monetary allowances;

•  overtime or penalty rates; and

•  any other separately identifiable amounts.

[52] The phrase “base rate of pay” is used only twice in the Black Coal Award. First, at clause 13.4(a) for the purposes of calculating the rate at which accrued annual leave must be paid on termination of employment. Secondly, at clause 13.4(b) for the purposes of calculating the rate at which a percentage of accrued personal leave must be paid on termination of employment.

[53] The limited use to which these definitions are put in the Black Coal Award gives expression to an intention that for some purposes the minimum rates prescribed by the Black Coal Award (“base rate of pay” and “ordinary week’s pay”) will be used to calculate identified entitlements. In other words, where rates other than those described in clause 21.2 of the Black Coal Award are intended to represent the rates payable for working ordinary hours, express provision is made therefor.

[54] Moreover, that “base rate of pay” is as defined in the Black Coal Award has the effect of distinguishing the Black Coal Award from what was said in Fonterra Brands (Australia) Pty Ltd v AMWU (and on which Ai Group relies) that the well-established and common industrial meaning of the term “ordinary pay” is “remuneration for an employee’s weekly hours but excluding any amount paid for shiftwork, overtime or other penalty”. That meaning is given effect in the definition of “base rate of pay” in the Black Coal Award. In any event clause 22.2 does not refer to “ordinary pay”. It refers to “ordinary time” and “ordinary time rate”.

[55] We consider that the plain and ordinary meaning of the provisions in clauses 21 and 22 of the Black Coal Award as concern the rate of pay for ordinary hours of work is clear. The rate of pay for ordinary hours worked is variable depending on the day on which that work is performed. So much is abundantly clear from the text of clause 21.2. The reference to “ordinary time” and “ordinary time rate” in clause 22.2, conveys a collective description of the different rates at which ordinary hours of work are paid under clause 21.2. In effect the phrases mean the applicable rate for working ordinary time set out in clause 21.2. If the phrases “ordinary time” and “ordinary time rate” were intended to mean the rate of pay for working ordinary hours on Monday through Friday the term “single time” or “base rate of pay” could have been used. Indeed “single time” is used to covey that very meaning in clause 21.2. Its use to convey that meaning in clause 21.2 stands in contradistinction to the use in the very next clause (clause 22) of different phrases – “ordinary time” and “ordinary time rate”. This is because the phrases were intended to convey a broader meaning, namely the one we have earlier described which includes single time but is not confined to single time.”⁴⁹

[18] Clause 10.4 of the Black Coal Award deals with casual employment and relevantly provides that for working ordinary hours, a casual employee “will be paid 1/35^th of the appropriate weekly rate, plus 25% instead of leave entitlements under the award, with a minimum four hours payment for each engagement”. It establishes an ordinary time hourly rate of pay for casual employees which is a single time hourly rate comprising 1/35^th of the appropriate (meaning the appropriate classification) weekly rate plus 25%. Another way of expressing the rate is 125% of 1/35^th of the appropriate weekly rate. We reject the CMIEG contention that the word “plus” in clause 10.4(b) means in addition to the rate but does not mean the loading is incorporated into the rate. We consider that the two components taken or added together constitute the relevant casual hourly rate of pay, which is a single time rate of pay established by clause 10.4(b). This analysis is consistent with the decisions in the Overtime for casuals decision⁵⁰, Yallourn⁵¹ and Australian Nursing and Midwifery Federation v Domain Aged Care (QLD) Pty Ltd.⁵² We consider each of these decisions to be correct.

[19] Dealing first then with the application of clause 21 of the Black Coal Award to casual employees. There is a substantially similar approach to the description of entitlements for overtime hours worked under clause 17 and for working ordinary hours under clause 21. Both express the various “rates” payable by reference, relevantly, to “time and a half” and “double time”. There is nothing in the text of the provision or elsewhere in the Black Coal Award which would suggest the phrases have a different meaning or application when used to describe the overtime entitlement as opposed to the ordinary hours or work entitlement. Plainly the phrases have the same meaning. In our November 2020 decision we said:

“[98] The reference to “single time” in clause 21.2 is a reference to an hourly rate of pay derived by dividing the “basic weekly 35 hour rate” in Schedule A of the Black Coal Award or the “minimum rate of pay” in Schedule B of that award, as the case requires, by 35, representing the ordinary hours per week as found in clause 21.1. “Time and a half” in clause 21.2, means 1.5 times the “single time rate” or 150% and “Double time” means twice that “single time” rate or 200%. The same nomenclature is used to describe the rates payable for overtime work in clause 17 of the Black Coal Award. The terms “time and a half” and “double time” have the same meaning.”53

[20] We were of course not concerned in the above passage with the position of a casual employee, but self-evidently and consistent with our reasoning above, the reference to “single time” in clause 21.2 in so far as it is concerned with ordinary hours for a casual employee is a reference to an hourly rate of pay derived by dividing the “basic weekly 35 hour rate” in Schedule A of the Black Coal Award or the “minimum rate of pay” in Schedule B of that award, as the case requires, by 35, representing the ordinary hours per week as found in clause 21.1 plus 25% consistent with clause 10.4(b). As we have indicated earlier another way of expressing the single time rate for a casual employee is 125% of 1/35^th of the appropriate weekly rate. In the result clause 21 of the Black Coal Award operates upon a casual employee as follows:

•  Ordinary hours worked during an engagement on Monday to Friday by a casual employee are paid at 125% of 1/35^th of the appropriate weekly rate, which is the single time rate for a casual employee.

•  For ordinary hours worked during the first four hours of an engagement by a casual employee on a Saturday, the casual employee is paid one and a half times the single time rate for a casual employee, that is, 125% of 1/35^th of the appropriate weekly rate multiplied by 1.5.

•  For ordinary hours worked by a casual employee during the Saturday engagement which are in excess of 4 hours and for all ordinary hours worked during a Sunday engagement by a casual employee, that employee is paid twice the single time rate for a casual employee, that is, 125% of 1/35^th of the appropriate weekly rate multiplied by 2.

[21] Turning then to clause 22.2. As we said in our November 2020 decision, the rate of pay for working ordinary hours under the Black Coal Award is variable depending on the day on which that work is performed (see clause 21.2). The reference to “ordinary time” and “ordinary time rate” in clause 22.2, conveys a collective description of the different rates at which ordinary hours of work are paid under clause 21.2. In effect the phrases mean the applicable rate for working ordinary time set out in clause 21.2. The ordinary time rate is different to the single time rate but will produce the same rate when ordinary hours are worked by a casual employee during engagements on Monday to Friday. For a casual employee, the ordinary time rate for a particular engagement is determined in the manner described in the preceding paragraph. If a casual is engaged to work ordinary hours which involve shift work the appropriate ordinary time rate for the casual employee is first calculated and then the appropriate shift rate of 115% (for afternoon and rotating night shifts) or 125% (for permanent night shift) is calculated by multiplying the appropriate ordinary time rate by 1.15 or 1.25 as the case requires. Clause 22.2 shows that where the shift penalty is not intended to compound with the underlying rate, it has expressly so provided. For example, clause 22.2(b) provides that the payment for overtime hours on a 6 or 7 day roster is the “overtime penalty rate” (determined by reference to clause 17) plus 15% of the “ordinary time rate for time worked”.

[22] We are not persuaded by Ai Group’s submission as to the failure of the CFMMEU to raise this issue during the proceeding leading to the November 2020 decision. The CFMMEU have explained why that is the case and in any event these proceedings are concerned with ensuring that the Exposure Draft reflects the entitlements under the existing Black Coal Award, no more and no less. We also reject the submission that the construction advanced by the CFMMEU, with which, as should be apparent, we agree, would result in “double counting”. The result simply multiplies the correctly calculated applicable casual rate by the ordinary time rate factor in clause 21.2 or the shift work factor in clause 22.2. We should indicate here as we did not consider the position of casual employees in our November 2020 decision, the preliminary view as to drafting we proffered at [60] does not properly reflect the position of casual employees on shift and weekend engagements.

[23] For the reasons stated above we reject the construction for which the CMIEG contends. We also reject the contention which underlies the CMIEG submission that given the purpose of the casual loading (instead of leave entitlements) it does not follow that the compensatory benefit should compound by the performance of shift or weekend work and that compensation for casual employees working unsociable hours on weekends and for shift work is achieved by paying shift and weekend penalties as additive to the casual loading and not compounding. Firstly, the words of the relevant provisions, for the reasons explained above, dictate a compounding result. Secondly, there is nothing inherently inconsistent with a compounding result and the purpose for which the casual loading is paid. This is particularly the case when permanent employees under the Black Coal Award are paid the greater of a 20% leave loading or the employees’ rostered earnings for the period of annual leave.

[24] As we have noted in [5] above, the CFMMEU proposes two alternative drafting options to resolve the issue in the Exposure Draft. We express our provisional preference for the first of those options. Commissioner Bissett will convene a conference of interested parties to finalise the Exposure Draft to give effect to this decision and our November 2020 decision.

DEPUTY PRESIDENT

Determined on the basis of the written submissions

Printed by authority of the Commonwealth Government Printer

<PR728601>

1 [2020] FWCFB 5908

2 [2020] FWCFB 4350

3 Ibid at [59]

4 As used in clause 17.2 prior to the variation arising from the Full bench decision.

 5   CFMMEU submission dated 15 January 2021 and CFMMEU reply submission dated 5 February 2021

 6   CEPU submission dated 15 January 2021 and CEPU reply submission dated 5 February 2021

 7   APESMA submission dated 15 January 2021 and APESMA reply submission dated 5 February 2021

 8   Ai Group reply submission dated 29 January 2021

 9   CMIEG reply submission dated 29 January 2021

 10   CFMMEU submission dated 15 January 2021 at [2]

 11   Ibid at [3]

 12   Ibid at [4]

 13   Ibid at [10]

¹⁴ [2020] FWCFB 4350 at [59]

15 [2019] FWCFB 1716

 16   CFMMEU submission dated 15 January 2021 at [12]

17 At [55]

 18   CFMMEU submission dated 15 January 2021 at [14]

 19   Ibid at [19] to [22]

 20   CFMMEU reply submission dated 5 February 2021 at [6]

 21   Ibid at [7]

 22   Ibid at [8]

 23   Ibid at [11] to [12]

 24   Ibid at [15]

 25   Ibid at [16]

 26   APESMA submission dated 15 January 2021 at [6]

 27   Ibid at [8]

 28   Ibid at [9]

 29   Ibid at [10] to [11]

 30   Ibid at [12]

 31   Ibid at [13]

 32   APESMA reply submission dated 5 February 2021 at [7] to [9]

33 [2017] FWCFB 381; 262 IR 300

 34   APESMA reply submission dated 5 February 2021 at [21] to [25]

 35   Ai Group reply submission dated 29 January 2021 at [10]

36 At [60]

37 Ai Group reply submission dated 29 January 2021 at [11]

 38   Ibid at [14]

39 [2020] FWCFB 4350 at [28]

40 [2020] FWCFB 4350 at [70] in relation to the Black Coal Award

 41   Ai Group reply submission dated 29 January 2021 at [22]

 42   Ibid at [26]

 43   CMIEG reply submission dated 29 January 2021 at [2]

 44   Ibid at [9]

 45   Ibid at [10]

 46   Ibid at [11]

 47   Ibid at [12]

 48   Ibid at [13]

49 [2020] FWCFB 5908 at [47]-[55]

50 [2020 FWCFB 4350 at [59]

51 [2017] FWCFB 381; 262 IR 300 at [41]

52 [2019] FWCFB 1716 at [17]

53 [2020] FWCFB 5908 at [98]