FEDERAL COURT OF AUSTRALIA

Construction Forestry Mining and Energy Union (Construction & General Division) v The Master Builders’ Group Training Scheme Inc [2007] FCA 435

INDUSTRIAL LAW – interpretation of award – National Building and Construction Industry Award 2000 – where award applies to apprentices in South Australia – where award makes provision for payment of travel patterns allowance in relation to travel to work – where apprentices covered by award participated in training – whether travel patterns allowance payable in respect of travel to trade school – approach to interpretation of awards.

Held:  purpose of travel patterns allowance does not include travel to trade school – attendance by apprentice at trade school falls outside meaning of ‘work’ – travel patterns allowance not payable in respect of travel to trade school – application dismissed.   

Acts Interpretation Act 1901 (Cth)ss 15AA, 15AB, 46

Legislative Instruments Act 2003 (Cth) s 7

Workplace Relations  Act 1996 (Cth) s 718, s 848

Training and Skills Development Act 2003 (SA) s 37, s 41

Vocational Education, Employment and Training Act 1994 (SA)

City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426 cited

Fetz v Qantas Airways (1997) 77 IR 443 cited

George A Bond and Co Ltd (In Liq) v McKenzie [1929] AR (NSW) 498 considered

Master Builders Association (Vic) v Australian Building Construction Employees’ and Builders’ Labourers’ Federation (1981) 35 ALR 284 considered

Mrs P Davies v Neath Port Talbot County Borough Council [1999] ICR 1132 distinguished

Qantas Airways v Fetz (1998) 84 IR 52 cited

Short v F W Hercus Pty Ltd (1993) 40 FCR 511 considered

Wallace v CA Roofing Services Ltd [1996] IRLR 435 considered

Wiltshire Police Authority v Wynn [1981] QB 95 considered

Zajaczkowski v Podean Electronic Industries Pty Ltd (No 4) (1996) 69 IR 307 cited

CONSTRUCTION FORESTRY MINING AND ENERGY UNION (CONSTRUCTION & GENERAL DIVISION) v THE MASTER BUILDERS' GROUP TRAINING SCHEME INC

SAD 57 OF 2006

BESANKO J

27 MARCH 2007

ADELAIDE

THE COURT ORDERS THAT:

1.                  The applicant have leave to file and serve the amended application dated 28 September 2006.

2.                  The amended application be dismissed.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

1                     This is an application by the Construction Forestry Mining and Energy Union (Construction and General Division) under s 848 of the Workplace Relations Act 1996 (Cth) (‘the Act’) for an interpretation of cl 38 of the National Building and Construction Industry Award 2000 (and related provisions) (‘the award’) as it applies to an apprentice in South Australia and his or her entitlement to the fares and travel patterns allowance on a day when he or she attends trade school. The applicant also asks the Court to make a finding that the respondent had breached the award by failing to pay employee apprentices in South Australia the fares and travel patterns allowance (cl 38) in respect of each day when those apprentices attended trade school. The applicant also seeks the imposition of a penalty on the respondent under s 719 of the Act for a breach of the award. I have not heard submissions on the question of penalty and the application has proceeded on the basis that if the applicant is successful in terms of the interpretation it seeks and the finding it asks the Court to make, then the parties will make submissions on the question of penalty.

2                     I was advised by the applicant that should it be successful then it is likely that the recovery of underpayments can be dealt with by agreement between the parties.

3                     The applicant seeks leave to file an amended application seeking the interpretation and finding referred to in [1] above, and I will grant that leave.

The facts

4                     A number of facts were agreed between the parties. In addition, the applicant called as witnesses two men who have each completed an apprenticeship with the respondent. They were briefly cross-examined by the respondent. Both witnesses were honest and straightforward, and I accept their evidence. The respondent tendered a document but did not call any oral evidence.

5                     The applicant is an organisation of employees registered under the Act. The respondent is an employer who employs apprentices in the trades of carpentry, carpentry and joinery, joinery, cabinet-making, brick-laying, painting and decorating, painting, solid plastering, fibrous plastering, wall and ceiling lining and roof tiling.

6                     The applicant and the respondent are respondents to the award. The award was made by the Australian Industrial Relations Commission under the Act.

7                     The applicant has standing under s 718 of the Act, in that it is an organisation of employees registered under the Act with members employed by the respondent and whose industrial interests the organisation is entitled, under its eligibility rules, to represent in relation to work carried on by its members for the respondent. If the breach as claimed by the applicant is made out, the employees previously referred to are employees who are affected by the breach of the applicable provision of the award.

8                     The respondent requires its apprentices to enter into contracts of training as an express term of their contracts of employment. Under the contract of employment, it is an obligation of an apprentice to attend trade school. Failure to attend trade school without good reason will result in an apprentice suffering consequences, at the initiative of the respondent, pursuant to the demerit point scheme points system in the apprentice induction package, such as an official warning. I will explain what the apprentice induction package is in due course.

9                     Mr Allesandro Maurici was one of the witnesses called by the applicant. He is 26 years of age and he is a building and construction worker. He works for ceiling and wall contractors. He undertook a wall and ceiling lining apprenticeship. He commenced the apprenticeship in 2001 and he finished at the end of 2005. At the start of his apprenticeship he was apprenticed to Adelaide Fibrous Plasterboard Linings. In 2003 and towards the end of the second year of his apprenticeship, he was apprenticed to the respondent.

10                  As part of his apprenticeship with the respondent, Mr Maurici attended trade school. That was how it was described in the evidence and submissions. In fact, trade school was a Technical and Further Education College at Gilles Plains. He was under an obligation to go to trade school.

11                  At the beginning of his apprenticeship with the respondent, Mr Maurici was given a document entitled ‘Master Builders’ Group Training Scheme Apprenticeship Induction Package’. Mr Maurici understood that this document was his contract with the respondent. He understood that it was a condition of his employment with the respondent that he comply with the requirements set out in the induction package.

12                  Mr Maurici was required to sign certain pages of the induction package, including a page entitled ‘Conditions of Employment’. That page contained the following statements, among others:

“MBGTS indentures the apprentice and then “leases” them to the participating host employers for varying periods of time …

The contract of training will be signed prior to the commencement of employment. For the first three months apprentices will be on probation. The probationary period is counted as part of the terms of indenture. The apprentice will also be required to attend trade classes at a TAFE college or approved training college on a weekly block release.

Pay and conditions of service are identified in the National Building and Construction Award 1990. Annual leave is to be taken at the discretion of MBGTS and will not be normally granted when it would require an absence from the training college.

It should be noted that apprentices will not be retained in employment by MBGTS or the current host employer at the completion of their contract of training.’

13                  Under the contract of employment breaches of the contract by the apprentice were dealt with by a demerit points system.

14                  Mr Maurici went to trade school for one-week blocks for approximately one week every month. He went with other apprentices employed by the respondent. Some of the other apprentices had to complete part of a module at the Technical and Further Education College at Tea Tree Plaza and those apprentices had to make their way there in their own motor vehicles.

15                  Mr Maurici said that most apprentices brought their own tools with them to trade school. He described the toolboxes and said that they would be very difficult to carry on public transport or if an apprentice rode a bicycle or walked to trade school. To the best of Mr Maurici’s recollection, everyone attending trade school travelled there by private motor vehicle.

16                  If an apprentice failed a module at trade school then he or she would have to repeat that module. Host employers of the apprentice became ‘annoyed’ if that occurred.

17                  Mr Maurici said that he understood it was a condition of his employment that he complete all trade school requirements in the year that they were undertaken. He said that the wages of apprentices are a percentage of the ‘trades rate’. He said that he was paid for attending trade school, and that in the weeks that he went to trade school he was paid on the basis of a standard 40-hour week. Mr Maurici said that, on occasions, Adelaide Fibrous Plasterboard Linings contacted him at trade school about work issues.

18                  In cross-examination, Mr Maurici agreed that neither the respondent nor those teaching at the trade school issued or made a direction to the apprentices that they bring their own tools.

19                  Mr Andrew Harrison was the other witness called by the applicant. He is 28 years of age and he is a carpenter who works in the building construction industry. His current employer is Essential Carpentry. He was an apprentice employed by the respondent and he started his apprenticeship in 2000 and finished it in December 2004. He had a number of host employers during his apprenticeship, including Baulderstone Hornibrook and Essential Carpentry.

20                  Mr Harrison said that attending trade school was part of his employment as an apprentice. He said that he was given the induction package at the commencement of his apprenticeship, and that he understood that this contained the ‘rules’ of his employment.

21                  Mr Harrison attended trade school at the Technical and Further Education College at Marleston. He states that in the first and second year of his apprenticeship, he did eight lots of one-week blocks of trade school, and in the third year, he did six lots of one-week blocks of trade school. He did not attend trade school in the fourth and final year of his apprenticeship.

22                  Mr Harrison said that other apprentices employed by the respondent attended trade school at Marleston. He said that he and the other apprentices were required to bring their own tools and that they were required to attend other sites to examine things like foundations. His recollection was that this occurred on two occasions. He said that they had to drive their own motor vehicles from trade school to the other sites, although on one occasion a bus had been arranged.

23                  Mr Harrison said that each apprentice took his own nail bag to trade school as they were not supplied by the school. He said that in addition to the nail bag, other tools were taken to trade school and he described those other tools. He said that the tools that the trade school did supply were old or outdated or of poor quality or worn out. He said that using the tools provided at trade school would have made it harder to successfully complete the work required.

24                  Mr Harrison was paid for his attendance at trade school. He was paid on the basis of a 40‑hour week. In his induction session with the respondent, Mr Harrison raised the issue of whether he would be paid for travelling to trade school and he was told that he would not be paid for that activity.

25                  The contract of training between the respondent and Mr Harrison was put before me.

26                  The key facts to emerge from the evidence are as follows:

1.         Apprentices employed by the respondent were employed on the terms and conditions set out in the induction package. It was a condition of their employment that there be a contract of training. The contract of training was regulated by the provisions of the Training and Skills Development Act 2003 (SA) and prior to that Act, the Vocational Education, Employment and Training Act 1994 (SA).

2.         The respondent ‘hired out’ or ‘leased out’ the apprentices to employers, and when they were working for a host employer they were paid a wage and a travel patterns allowance under cl 38 of the award.

3.         Apprentices employed by the respondent were required under a contract of training to attend trade school and, generally speaking, they did so in one-week blocks. They were paid for a 40-hour week when they attended trade school. They were not paid the travel patterns allowance under cl 38 of the award. Again, generally speaking, they took their own tools to trade school because it was more convenient to do so or because they were of better quality than the tools provided by trade school. There was no legal requirement that they provide their own tools when attending the school.

On occasion, apprentices attending trade school went to work sites as part of their training. On occasion, apprentices attending trade school would receive telephone calls from their host employer about work issues.

The award

27                  The coverage of the award is dealt with in cl 6, and cl 4 contains definitions of the terms used in the award.

28                  The relevant provisions of the award for present purposes are as follows:

‘38.1    Metropolitan radial areas

Except for Operators in New South Wales (see 38.13 hereof), the following fares and travel patterns allowance shall be paid to employees for travel patterns and costs peculiar to the industry which include mobility requirements on employees and the nature of employment on construction work.

…

38.1.2  South Australia

When employed on work located within a radius of 30 kilometres from the GPO Adelaide - $12.40 per day.

…

38.10 Daily entitlement

38.10.1 The travelling allowances prescribed in this clause shall not be taken in to account in calculating overtime, penalty rates, annual or personal leave, but shall be payable for any day upon which the employee in accordance with the employers requirements works or reports for work or allocation of work and for the rostered day off as prescribed in clauses 27 – Hours of work and 30 – Shift work of this award. The allowances shall however be taken into account when calculating the annual leave loading.

38.10.2 Subject to the foregoing provisions a fare shall be deemed to have been incurred if the employee has used a bicycle or other means of locomotion or has walked instead of using a public conveyance.

…

38.12 Apprentices

38.12.1 An apprentice’s (including in South Australia, unapprenticed juniors as prescribed in clause 20.1 of this award) entitlement to allowance prescribed under 38.1, 38.2 and 38.3 hereof shall be in accordance with the following scale.

.  On the first year rate           - 75% of amount prescribed.

.  On second year rate             - 85% of amount prescribed.

. On third year rate                 - 90% of amount prescribed.

. On fourth year rate               - 95% of amount prescribed.

38.12.2 The foregoing shall be calculated to the nearest five cents, two cents and less to be disregarded.’

29                  Training of employees is referred to in other parts of the award. For example, cl 19.3.5 refers to training and it expressly provides that if training is undertaken during normal working hours the employee concerned shall not suffer any loss of pay. Clause 39.2 deals with trainees and cl 39.2.4(b) provides that an employee attending off-the-job training in accordance with the contract of training shall be permitted to be absent from work, without loss of pay or continuity of employment.

30                  The proper approach to the interpretation of the provisions of an award has been the subject of observations in the authorities. The provisions of the Acts Interpretation Act 1901 (Cth) are also relevant.

31                  In George A Bond and Co Ltd (In Liquidation) v McKenzie [1929] AR (NSW) 498, Street J said (at 503-504):

‘Now 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 parties, couched in terms intelligible to themselves but often framed without that 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.’

32                  In Short v F W Hercus Pty Ltd (1993) 40 FCR 511, Burchett J said (at 518):

‘The context of an expression may thus be much more than the words that are its immediate neighbours. Context may extend to the entire document of which it is a part, or to other documents with which there is an association. Context may also include, in some cases, ideas that gave rise to an expression in a document from which it has been taken. When the expression was transplanted, it may have brought with it some of the soil in which it once grew, retaining a special strength and colour in its new environment. There is no inherent necessity to read it as uprooted and stripped of every trace of its former significance, standing bare in alien ground. True, sometimes it does stand as if alone. But that should not be just assumed, in the case of an expression with a known source, without looking at its creation, understanding its original meaning, and then seeing how it is now used. Very frequently, perhaps most often, the immediate context is the clearest guide, but the court should not deny itself all other guidance in those cases where it can be seen that more is needed. In literature, Milton and Joyce could not be read in ignorance of the source of their language, nor should a legal document, including an award, be so read.’

I also refer to, without repeating, the observations of French J in City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426 at [50]-[57].

33                  The provisions of the Acts Interpretation Act 1901 (Cth) and, in particular, s 15AA and s 15AB are also relevant. The Act applies because the award is an instrument and does not fall within the exceptions of a legislative instrument within the meaning of the Legislative Instruments Act 2003 (Cth) (see s 7(1) item 18 of that Act) or a rule of court: s 46.

34                  The starting point is the terms of the award itself. It seems to me that three particular matters should be noted.

35                  First, cl 38.1 provides an indication of the purpose of the travel patterns allowance. It states that it is to be paid to employees:

‘… for travel patterns and costs peculiar to the industry which include mobility requirements on employees and the nature of employment on construction work.’

36                  The nature of the building and construction industry is that a worker engaged in the industry is often required to travel to different sites to perform his employment duties. Unlike many other industries where a worker in the industry reports to the same place of employment every working day, a worker in the building and construction industry may be required to travel significant distances to his places of employment over a period of time. If this occurs the cost and inconvenience of travelling to work increases.

37                  Secondly, and this is perhaps no more than a development of the first matter, the travel patterns allowance is payable irrespective of whether in fact the worker incurs additional expense or suffers inconvenience. Under cl 38.1.2 a fixed amount is payable per day and the amount is not calculated by reference to how far a worker must travel. Of a broadly similar clause, the Full Court of this Court said in Master Builders Association of Victoria v Australian Building Construction Employees and Builders’ Labourers’ Federation (1981) 35 ALR 284 (‘Master Builders Association’) at 289:

‘Under cl 16.1 each employee is entitled to what is described as a “fares allowance”, but the justification for the payment of that allowance is stated to be: “… for travel patterns and costs peculiar to the industry which include mobility requirements on employees and the nature of employment on construction work.” The fares allowance is determined at a fixed amount per day and is to be paid irrespective of whether the employee incurs any expense in travelling between his home and his particular place of work and return. An employee whose home is alongside his then place of work is just as entitled to be paid the fares allowance as an employee who may be forced to travel many kilometres at great expense from his home to his place of work.’

38                  Thirdly, the travel patterns allowance is payable when a worker is employed on ‘work’ and the case turns, or largely turns, on the meaning to be attributed to the word work in this context. The word is used not only in cl 38.1.2 of the award but also in cl 38.10.1.

39                  It seems to me that although the matter is not clear, the terms of the award support the interpretation advanced by the respondent, namely, that apprentices attending trade school are not entitled to the travel patterns allowance. I say that for two reasons. First, if one has regard to the purpose of the travel patterns allowance, the payment of the allowance to a worker who attends trade school does not seem to be within that purpose. In the case of trade school, the location of the place the worker is required to attend does not vary. I think that point holds good even though I recognise that the allowance itself is not calculated by reference to actual cost incurred or inconvenience suffered. Secondly, although the meaning of the word ‘work’ will vary, depending on the context, I do not think that one would ordinarily consider that an apprentice attending trade school was employed on ‘work’.

40                  The applicant emphasised the fact that the contract of employment between the respondent and an apprentice envisaged and required that the apprentice would enter into a contract of training and would undergo training. The respondent accepted that there needed to be an approved contract of training under s 41 of the Training and Skills Development Act 2003 (SA) and that if there was not the contract of employment would be frustrated (s 37). The applicant submitted that training was an integral part of an apprentice’s employment and part of the ‘work’ he performed. Furthermore, there was, the applicant submitted, no clear distinction between work and training in terms of benefit to the employer because training is of benefit to the employer in that the more skilled an employee is, the more value he is to his employer. The factual assertions may be accepted and, to a point, so may the submissions themselves, but to my mind, they are not of sufficient force to outweigh the interpretation I would place on the award as set out above.

41                  The applicant submitted that there were no authorities of direct assistance. It referred to Master Builders’ Association as authority for the proposition that if an employee is required by his contract of employment to perform an activity, in that case driving to and from work, then that will be considered part of his work even though it is not the main activity he is required to perform. The applicant also referred to Mrs P Davies v Neath Port Talbot County Borough Council [1999] ICR 1132 where the Employment Appeal Tribunal in England held that a union representative who attended a training course was engaged in work and made observations as to the benefits to the employer of such training. In my opinion, the statutory and regulatory context of these cases is so different from that under consideration in this case that they are of very little assistance.

42                  The applicant submitted that an amendment to the award made on 1 November 2004 supported the interpretation it advanced. The amendment dealt with school-based apprentices and introduced a new cl 38.12.3 as follows:

‘38.12.3 Notwithstanding the other provisions of this clause, school based apprentices shall only receive the allowances prescribed under clause 38.1, 38.2 and 38.3, at the scale prescribed in clause 38.12.1, for days when they attend work and they shall not be paid the allowance for days they attend school. When a school based apprentice attends off-the-job training, not at the school in which they are enrolled, they shall receive 25% of the allowance as prescribe in clause 38.12.1.’ 

43                  The applicant submitted that I could infer from this amendment that the award prior to the amendment provided for apprentices to be paid for attendance at trade school. Why otherwise, asked the applicant, would it be necessary to specifically say that school-based apprentices are not to be paid the allowance for days they attend school? Even if it was appropriate to use the amendment in this way, other questions arise. For example, the amendment specifically provides that school-based apprentices are to receive a lower proportion of the allowance for attendance at training other than at the school at which they are enrolled. It might be asked why there was a need for a specific provision if they were otherwise covered and why the allowance is such a low proportion of the allowance specified in cl 38.12.1. I do not find the amendment to the award to be of any assistance in interpreting the award.

44                  The respondent submitted that the common principles as to the nature of contracts of apprenticeship support the interpretation of the award for which it contends. In Wiltshire Police Authority v Wynn [1981] QB 95. Lord Denning MR referred to the distinction at common law between a contract of apprenticeship and a contract of service. The Master of the Rolls said (at 109):

‘The courts drew a distinction according to which purpose was the primary purpose: and which was secondary. If the primary purpose was work for the master – and teaching a trade was only a secondary purpose – it was a contract of service. But if teaching a trade was the primary purpose – and work for the master was only secondary – then it was a contract of apprenticeship.’

I also refer to the remarks of Waller LJ at 111.

Dunn LJ said (at 113-114):

‘In my judgment, the Employment Appeal Tribunal failed to give sufficient weight to the question, what is the nature or substance of the relation created? Ever since the settlement cases of the 18^th and 19^th centuries, the common law has held that the court must look at the principal object of the contract in deciding whether or not a contract of service exists. Where the primary object of the contract is teaching or learning, then there is no contract of service. In Horan v Hayhoe [1904] 1 KB 288 it was held that an apprentice jockey was not employed under a contract of service although in the ordinary course of his training and for the purpose of learning his business he performed the duties of a stable-boy during a considerable part of the day, was paid wages and was given free board and lodgings. He was not employed as a servant. The principal object was teaching and learning. The fact that the conditions of engagement are consistent with a contract of service is not decisive if the principal object of the relationship is teaching and learning. In placing emphasis on the terms of engagement of the police cadet rather than on the principal object of the relationship, in my judgment the Employment Appeal Tribunal fell into error.’

45                  In Wallace v CA Roofing Services Ltd [1996] IRLR 435, Sedley J said (at 436):

‘Since the enactment of the Apprenctices Act 1814 it has not been necessary for an apprenticeship to be created by indenture or to last for seven years or more. Although enforceability depends on the contract being in writing (Kirkby v Taylor [1910] 1 KB 529) an employer who has acted upon an oral contract of apprenticeship will be held to it as if it were in writing (McDonald v John Twiname Ltd [1953] 2 QB 304). Although modern legislation has for its own purposes assimilated apprenticeships to contracts of employment (see the Employment Protection (Consolidation) Act 1978 s 158(1) and, for example, s 49, which affects minimum periods of notice), the contract of apprenticeship remains a distinct entity known to the common law. Its first purpose is training; the execution of work for the employer is secondary (see Wiltshire Police Authority v Wynn [1981] 1 QB 95 at 109, 110 and 113-114).’

46                  The Industrial Relations Commission of South Australia in Zajaczkowski v Podean Electronic Industries Pty Ltd (No 4) (1996) 69 IR 307 discussed the common law distinction between contracts of apprenticeship and contracts of service. The distinctive features of a contract of apprenticeship were discussed by Vice President Ross in Fetz v Qantas Airways (1997) 77 IR 443 at 454 and by the Full Bench of the Commission on appeal (Qantas Airways v Fetz (1998) 84 IR 52 at 65-66).

47                  The common law principles as to the features of a contract of apprenticeship are not directly relevant. They do show that a distinction was drawn between training and work for an employer and that is a distinction which, for the reasons I have given, is reflected in the terms of the award. To that extent they provide general support for the interpretation for which the respondent contends. The same might be said of the fact that the framers of the award saw the need in cl 19.3.5 and cl 39.2.4(b) to provide that an employee engaged in training during normal working hours is not to suffer any loss of pay. Nevertheless, my conclusion as to the proper interpretation of the award is based primarily on the matters I referred to earlier.

Conclusions

48                  For these reasons, the amended application must be dismissed. I will hear the parties as to costs and any other orders.

Associate:

Dated:         27 March 2007