FEDERAL COURT OF AUSTRALIA

Manildra Flour Mills (Manufacturing) Pty Limited v National Union of Workers [2012] FCA 1010

THE COURT ORDERS THAT:

1.    The appeal be dismissed.

2.    There be no order as to costs.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    The appellant (hereafter referred to as ‘the company’) appeals from the decision of Chief Industrial Magistrate Hart delivered on 30 August 2011 in the Chief Industrial Magistrate’s Court of New South Wales in respect of an Application for Recovery of Money made by the respondents against the appellant pursuant to the provisions of ss 719, 720, 722 and 723 of the Workplace Relations Act 1996 (Cth) (‘the Act’): see Craig Fahy & Ors v Manildra Flour Mills (Manufacturing) Pty Ltd (Unreported, Chief Industrial Magistrate’s Court of New South Wales, Magistrate Hart, 30 August 2011).

FACTS

2    The respondents (hereafter collectively referred to as ‘the electricians’) were employed as maintenance electricians by the company at its flour mill at Manildra, NSW (‘the mill’). Their employment was governed by the Milling Industry – General Award 1999 (‘the Award’).

3    In approximately 2000 three of the four electricians worked a roster pursuant to which they took turns to work one week in three on the afternoon shift whilst the remaining electricians worked on the day shift. From approximately April 2005 a fourth electrician was engaged by Manildra, so that each electrician worked one week in four on the afternoon shift.

4    The company’s mill has operated at least since 2000 to the present, seven days a week, 24 hours a day, and the normal working hours for the electricians on the afternoon shift was 2:00 pm to 10:00 pm Monday to Friday whereas the day shift was conducted from 7:00 am to 3:00 pm Monday to Friday.

5    The critical matter at issue before the Chief Industrial Magistrate was whether the electricians who were working on the afternoon shift from time to time were entitled to be paid standby time from the time they ceased their shift (10:00 pm) until the commencement of the next morning’s shift. The issue arose in consequence of a claim made by each of the electricians for payment for standby remuneration.

6    The relevant provisions of the Award provided as follows:

25.2    Call Back

Where, after having left the place of employment, an employee is recalled to work from home, the employee shall be paid for at least three hours work at the appropriate rate, except where such recall occurs within one hour of the employee’s normal commencement time. In such case overtime rates shall apply until the normal commencement time and then ordinary rates shall be payable.

25.3    Standing By

An employee required by the employer to hold in readiness for call back to work shall be paid standby time at ordinary award rates of pay from the time the employee is required to so hold in readiness until released by the employer from the requirement to .

7    There was no dispute that the electricians had been paid appropriate remuneration pursuant to cl 25.2 for those periods when they were actually called back to the mill. However, no payment had been made for standing by in the period from the completion of the afternoon shift until commencement of the next morning shift.

8    The company claimed that no payment was due for call back since at no stage were the electricians ‘required’ by the company to be on standby. The company submitted that ‘required’ meant that there had to be a direction from the employer, either express or implied, requiring the electricians to hold themselves in readiness until released following the completion of their particular afternoon shift to enable the electricians to be eligible for the benefit of payment pursuant to the ‘call back’ provision. Nor had any occasion arisen when the electricians were held ‘in readiness until released by the employer from the requirement to standby’: see cl 25.3 of the Award. Nor had there ever been any ‘release’ by the company.

FINDINGS

9    The Chief Industrial Magistrate found that the electricians were entitled to payment for call back pursuant to cl 25.3 of the Award. He observed that the uncontested evidence established that the four electricians were engaged as maintenance electricians; that if a breakdown occurred it was the task of the electricians as maintenance electricians to attend at the mill if the maintenance fitters identified the problem as one that required an electrician to rectify the fault.

10    Whilst no specific direction in such terms had been issued by the company, his Honour found a roster had been prepared in consultation between the company and the electricians. The roster stipulated that from Monday to Friday two electricians would be on duty during the day shift, from 7:00 am to 3:00 pm. One electrician would be on duty during the afternoon shift, from 2:00 pm to 10:00 pm. At the conclusion of the afternoon shift the afternoon shift electrician was free to return to his home. However, upon leaving the mill that electrician, as the nominated after hours electrician, was required to take with him a pager and a mobile phone supplied by the company to enable contact with him in case of an emergency. In the event of an electrical breakdown, employees of the mill were instructed to contact the nominated after hours electrician.

11    On weekends the afternoon shift employee, having completed his Friday afternoon shift at 10:00 pm, was required to commence an overtime Saturday shift commencing at 7:00 am and finishing at 3:00 pm on Saturday. However on leaving the mill at 3:00 pm on Saturday he was required to take the pager and mobile phone and be the point of contact from 3:00 pm Saturday to 7:00 am Monday morning should a call back be required.

12    The Chief Industrial Magistrate found that the roster required the electricians to work in accordance with such schedules and that whilst the word ‘required’ was not used in cl 2.5.3 of the Award, the roster had that effect. His Honour rejected the submission that the words ‘required’ or ‘released’ in respect of a call back obligation was necessary to invoke cl 25.3 since the roster necessarily effected such requirement.

13    His Honour also considered the obligations of a shift worker who had worked the afternoon shift. His Honour observed that such person had to be in close geographic proximity, have the pager with him, was prevented from consuming alcohol in case the worker had to drive to the mill and continue with such obligations as part of his roster.

14    The Chief Industrial Magistrate rejected the submission of the company that there was no express or implied provision in the verbal contract of employment between the company and the electricians such as to create an obligation upon the latter to hold themselves in readiness for a call back when required. His Honour also found that on a proper interpretation of cl 25.3 of the Award, the call back benefits were available to the electricians.

15    A submission was made by the company to the effect that if one of the electricians was not available to be recalled, then the company would telephone another member of the electrical team, or alternatively an electrical contractor. The Chief Industrial Magistrate found that there was no evidence to support such assertion; nor was there any evidence to support any claim that the electricians were free to decline to return to work to perform emergency call backs because the company had available alternative arrangements such as the utilisation of electrical contractors. His Honour also rejected the submission that because of the absence of evidence that the relevant employee might be unavailable or might have ignored a call back phone call, and instead found that the roster made it plain who was the person obligated to be available and to hold themselves available in readiness.

16    The Chief Industrial Magistrate also observed that where, during the call back period, the employee had been required to return to work, cl 25.2 of the Award imposed the relevant provision for payment and required a minimum payment for three hours irrespective of the time actually taken for the work.

17    Lastly, the Chief Industrial Magistrate rejected the company’s contention that the rostered employees were on-call but not ‘standing-by’ within the meaning of cl 25.3 of the Award and found that the notion that such employees, being on notice of possible call back, yet not on ‘standby was a status unknown to the Award and outside the scheme provided in Clause 25 thereof’.

APPEAL TO THIS COURT

18    The company appeals the decision on several grounds. Some of the grounds challenge the substance of the Chief Industrial Magistrate’s findings. Other grounds pertain to procedural errors allegedly found in the decision. It is convenient for the Court to first consider the grounds of appeal relating to procedural errors.

CHALLENGE TO THE CHIEF INDUSTRIAL MAGISTRATE’S EVIDENTIARY FINDINGS

19    In coming to his conclusion that the electricians were entitled to payment under cl 25.3 of the award, the Chief Industrial Magistrate considered evidence including the evidence of Mr O’Shea, who was a maintenance supervisor at the mill and who was called by the company as a witness.

20    The company submits that the Chief Industrial Magistrate erred in his construction of the effect of the electrical maintenance roster maintained at the mill. First it is submitted that in stating that Mr O’Shea’s evidence assisted the electricians his Honour misunderstood and misinterpreted his evidence. Contrary to his Honour’s findings, the company submits that in fact Mr O’Shea’s evidence did support the company’s and not the electricians’ contentions. The company points to [14] of Mr O’Shea’s affidavit sworn on 27 March 2009 in which he provided evidence that he understood the arrangements between the electricians were flexible such that an on-call electrician, if unavailable, could then arrange for another of the electricians team to answer the call. Mr O’Shea testified that he believed these arrangements were in place. Further, Mr O’Shea testified that it was his understanding that the afternoon shift electricians when on-call were not expected to alter their private lives in consequence of the on-call requirements and that such contentions were not challenged in cross examination.

21    Mr O’Shea was not challenged as to his credibility and the Chief Industrial Magistrate accepted Mr O’Shea as a witness of truth. The company submits that Mr O’Shea’s evidence was contrary to the findings made by the Chief Industrial Magistrate concerning the operation of the roster.

22    Secondly it is submitted that his Honour failed to have regard to other witnesses called by the company, namely Messrs Chilcott and Campbell. These witnesses were senior employees of the company. The company submits that although the electricians did not suggest that they were untruthful or that their evidence should be rejected, nor did the Chief Industrial Magistrate make any adverse findings against the witnesses, their testimony appears to have been ignored.

Consideration of this issue

23    In Mifsud v Campbell (1991) 21 NSWLR 725, Samuels JA stated at 728:

In Public Service Board of New South Wales v Osmond (1986) 159 CLR 656 the High Court said that it was right to describe the giving of reasons as “an incident of the judicial process” although a normal but not a universal one. In Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 McHugh JA at 247. makes some comments upon that holding, and goes on to say at 281 that the failure to explain the basis of a crucial finding of fact involves a breach of the principle that justice must not only be done but must be seen to be done.

Similarly, in my opinion, it is an incident of judicial duty for the judge to consider all the evidence in the case. It is plainly unnecessary for a judge to refer to all the evidence led in the proceedings or to indicate which of it is accepted or rejected. The extent of the duty to record the evidence given and the findings made depend, as the duty to give reasons does, upon the circumstances of the individual case.

Accordingly, a failure to refer to some of the evidence does not necessarily, whenever it occurs, indicate that the judge has failed to discharge the duty which rests upon him or her. However, for a judge to ignore evidence critical to an issue in a case and contrary to an assertion of fact made by one party and accepted by the judge — as the defendant's denial of having consumed alcohol — may promote a sense of grievance in the adversary and create a litigant who is not only “disappointed” but “disturbed”— to use the words which appear in the New Zealand case of Connell v Auckland City Council [1977] 1 NZLR 630 at 634. It tends to deny both the fact and the appearance of justice having been done. If it does, as in my opinion is the case here, then it will have worked a miscarriage of justice and have produced a mis-trial and resulted in what I would take to be an error of law which is reviewable on appeal. Whether it is an error of law or an error of fact, it seems to me a failure by the judge to do what the nature of the office requires.

24    The Chief Industrial Magistrate stated at [37] of his decision that Mr O’Shea’s evidence did not contradict the evidence of the electricians. According to the Chief Industrial Magistrate’s assessment the electricians’ evidence established that they were made aware that the roster system required them to keep themselves in readiness for a call back when they were rostered on the afternoon shift. This restriction prevented them from travelling any substantial distance away from the mill and it prevented them from consuming alcohol to the extent it might interfere with their ability to drive a car or work as an electrician.

25    Mr O’Shea states in his affidavit sworn on 27 March 2009 at [8] that:

I have never said to any of the electricians at any time it was a requirement of their roster that they not travel further than Orange from the mill, not to consume alcohol nor not to have personal commitments. As far as I am aware, it was never an instruction from Manildra Group to the electricians to remain within reasonable proximity of the mill, to not consume alcohol and/or to not have any personal commitments that might affect response times.

26    Mr O’Shea was cross examined on his affidavit. During the cross examination the following exchange occurred:

Q. But sir, was it not the case that part of being on-call was a requirement that you be able to respond, including come back to work –

A. Yeah.

Q. – in a timely manner?

A. That is correct.

Q. And so if you’re on-call for the weekend, you couldn’t go up to Newcastle for the weekend?

A. Of course not.

Q. No, you had to stay somewhere within a reasonable proximity.

A. That’s correct.

Q. Just in relation to being able to respond in a timely manner, including getting yourself to work, wouldn’t you agree that the employees, whilst on call, were not able to drink alcohol?

A. Well, there’s a term called fit for work, obviously, and, you know, there’s statements made in there where I’ve stated don’t drink alcohol. I never control these fellows. If you wanted to have a beer, have a beer. You know, if you understand where I’m coming from – and the – the company ruling as they’ve started in 1999 was zero alcohol, but if – I never made statements like that. I couldn’t control what they wanted to do. If you wanted to have […]

Q. But would you agree with me that Manildra’s requirement was that people be in a fit state to work –

A. That’s correct.

Q. – and not be affected by alcohol.

A. That is correct.

[…]

Q. And whilst you could still go out and do things in your private life, say on the weekend, you expected somebody, if they were on-call, to be able to return to work, to respond immediately and to return to work in a timely manner?

A. That’s correct.

27    With respect to his Honour, the Chief Industrial Magistrate’s conclusion that Mr O’Shea’s evidence does not contradict the evidence of the electricians is not accurate. The affidavit of Mr O’Shea clearly contradicts the evidence of the electricians that they were expected to refrain from alcohol consumption while on call. It is correct that in cross examination, Mr O’Shea’s evidence on this point departed from his affidavit. Mr O’Shea acknowledged that although he did not personally have a concern with employees consuming a reasonable amount of alcohol, the company did have a policy that employees should not be affected by alcohol while at work. Otherwise his written testimony survived. Although the learned Chief Industrial Magistrate was incorrect in stating that the evidence of the electricians was not contradicted by Mr O’Shea, the concessions made by Mr O’Shea in cross examination do tend to support the electricians’ case. Although it may not have been Mr O’Shea’s personal expectation, it was certainly the company’s expectation that employees not consume alcohol if they were intending to work.

28    Mr Campbell, who was the general manager of the company’s mill swore an affidavit on 16 April 2009. In his affidavit Mr Campbell avers that: he did not instruct Mr Fahy, who is one of the electricians, that he was to be in a fit state to work and not to consume alcohol while on call; that he did not inform Mr Fahy that he was not to have personal commitments that might affect the attendance time to the mill; that although he told Mr Fahy that there would be periods of on call work that required a response in an immediate manner to attend break-down situations, he meant that he expected a response from Mr Fahy immediately as to whether Mr Fahy would be able to attend; and that if Mr Fahy was not available, Mr Campbell would arrange for another electrician or a contractor to attend the mill. Mr Campbell deposed that he did not give an instruction that Mr Fahy was to hold himself in readiness.

29    In cross examination of Mr Campbell, the following exchange occurred:

Q. You don’t recall the part about not having any commitments that – sorry, so you agree that you said, “You should not have any commitments that prevent an immediate response”?

A. Yeah, and – and my response – my expectation of a response was – is exactly that.

Q. I’m only asking if you agree that you said words to that effect?

A. I – I can’t remember the exact words but – but that would have been something along the lines by the sound of it.

Q. But you don’t agree that you said, “You must be in a fit state and not consume alcohol”? You don’t recall saying that?

A. If – I would have – I mean again it’s a matter of making sure people are safe at work so obviously they couldn’t attend if they’d had alcohol I think is probably, bu the sound of the context and I can’t – I can’t recall the exact words but by the sound of the context that you’re referring to.

Q. In a sense it would almost go without saying?

A. Well, yeah, but OH&S doesn’t act like that.

30    This exchange demonstrates that Mr Campbell’s evidence was in similar terms to that of Mr O’Shea. Although Mr Campbell’s affidavit absolutely denied informing one of the electricians that he was not to consume alcohol or have time-consuming social engagements while on duty, that position was qualified in cross examination. Given that the evidence of Mr Campbell was on similar terms to that of Mr O’Shea, the Court finds that there was no error resulting from the fact that the Chief Industrial Magistrate did not refer specifically to Mr Campbell’s testimony in his decision.

31    Mr Chilcott is the manager of Human Resources and Safety for the company. In his affidavit sworn 17 April 2009 he stated that he was never advised that the electricians were under an obligation to not consume alcohol, remain within a reasonable proximity of the mill and not have personal commitments that might affect response times.

32    During the cross examination of Mr Chilcott, the following exchange occurred:

Q. Would it be fair to say that you didn’t have any knowledge either way in the sense that no one ever said to you there is no requirement that the electricians do these things? Is that what you’re saying – that nobody said anything to you about those things?

A. About?

Q. Those things that I have just referred to – about there being no requirements for the electricians.

A. Not to drink alcohol, stay within – no, no one said anything to me about that, no.

Q. So in other words, what you’re saying is, no one said anything to you about those things.

A. No they did not.

33    The Chief Industrial Magistrate’s decision did not refer to the evidence of Mr Chilcott. The Chief Industrial Magistrate made no evaluation whatsoever of Mr Chilcott’s evidence. Because Mr Chilcott said he was unaware of any directions not to consume alcohol and to remain in the vicinity of the mill, it appears that Mr Chilcott’s evidence stands in direct contradiction to the evidence of the electricians, which the Chief Industrial Magistrate erroneously described as uncontested.

34    In the hearing of the appeal the electricians submitted that the failure of the Chief Industrial Magistrate to refer to the evidence of Mr Chilcott was of no consequence, as Mr Chilcott was not aware of the operation of the roster. The Court rejects such submission. The fact that the manager responsible for human resources did not know of the purported instructions to on call electricians not to consume alcohol or not to travel too far from the mill is a relevant and significant piece of evidence. It tends to support a conclusion that such instructions were in fact not issued by the employer. In the circumstances of the case the failure of the learned Chief Industrial Magistrate to refer to the evidence indicates that the evidence has been overlooked.

DELAY IN ISSUING THE DECISION

35    The company submits that the delay in the delivery of judgment, namely some 21 months, was excessive. The company submitted that the Chief Industrial Magistrate failed to make crucial evidentiary findings in the face of conflicting evidence from the company’s and electricians’ witnesses, coupled with the fact that there had been extended delay in handing down a decision and that this fact constituted procedural unfairness as considered in Fox v Australian Industrial Relations Commission (2007) 161 FCR 263 (‘Fox’) and in Haros v Linfox Australia Pty Ltd (2012) 287 ALR 507.

36    In Fox, the Full Bench of the Australian Industrial Relations Court heard a wrongful dismissal claim brought by Mr Fox, who was terminated after allegedly engaging in inappropriate conduct with another employee at a work function. There was a 12 month interval between the hearing of the matter and the AIRC issuing a decision. In such decision Commissioner Roberts made a number of findings which were adverse to Mr Fox’s credibility. Mr Fox claimed that he had been denied procedural fairness because of the long delay without any explanation, in conjunction with the credibility findings.

37    The Full Court found that a breach of procedural fairness resulted because of the absence of any explanation for the findings on credit. Further, the Full Court did not exclude the possibility that the breach of procedural fairness could have affected the outcome of the case. The Full Court followed the decision of NAIS v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 228 CLR 470 (‘NAIS’), where Kirby J stated at [88]:

Where the decision-maker reaches a decision in reliance upon considerations of the credibility of parties or witnesses, significant delay undermines the acceptability of such assessments. Where there is lengthy delay in the provision of a reasoned decision, whether by a judge or tribunal, it may not be enough for the decision-maker simply to announce conclusions on credibility. It may then be necessary to say why the evidence of a witness is believed or disbelieved, in effect to demonstrate that any countervailing evidence has not been forgotten or overlooked.

38    In Stead v State Government Insurance Commission (1986) 161 CLR 141, the High Court stated at 145-146:

… Not every departure from the rules of natural justice at a trial will entitle the aggrieved party to a new trial.

[…]

Where, however, the denial of natural justice affects the entitlement of a party to make submissions on an issue of fact, especially when the issue is whether the evidence of a particular witness should be accepted, it is more difficult for a court of appeal to conclude that compliance with the requirements of natural justice could have made no difference. True it is that an appeal to the Full Court from a judgment or order of a judge is by way of rehearing… However, when the Full Court is invited by a respondent to exercise these powers in order to arrive at a conclusion that a new trial, sought to remedy a denial of natural justice relevant to a finding of fact, could make no difference to the result already reached, it should proceed with caution. It is no easy task for a court of appeal to satisfy itself that what appears on its face to have been a denial of natural justice could have had no bearing on the outcome of the trial of an issue of fact. And this difficulty is magnified when the issue concerns the acceptance or rejection of the testimony of a witness at the trial.

39    In Haros v Linfox Australia, the Full Court stated at [30]:

There are many reasons for caution in finding that a judge has denied fairness to the losing party in a case by reason of delay. A judge will sometimes make a point of preparing a draft of the facts of a case at the first opportunity after the trial has finished, while the details of the evidence are still fresh in his or her memory. It might be many months before the judgment can be completed, owing to work pressures, poor health, or other reasons, but the quality of the judgment will not suffer by the delay in those circumstances. The evidence in a case might be voluminous, but the issues that arise might turn out to be susceptible of resolution without reference to all of the detail of the evidence. Many cases develop a character as they proceed, which enables the judge to recall all that is necessary to write a judgment, even after a considerable time has elapsed. In many cases, all that is necessary is to return to the case to bring back the memories of the trial. In every case conducted in this court, transcript will be available to supplement and refresh memory. In determining whether there has been excessive delay, sufficient to deny fairness to a party, much more needs to be examined than simply the length of the delay.

40    With some hesitation, the Court considers that the delay in the reasons for decision being given did not amount to a breach of procedural fairness that would have affected the outcome of the decision. This case differs from cases such as Fox and NAIS on the basis that to decide this case, the Chief Industrial Magistrate was not obliged to make any findings of credibility. Further, the Chief Industrial Magistrate no doubt had access to the transcript and to the various affidavits and documentary evidence which were necessary to make the decision. It also may well have been that the Chief Industrial Magistrate had prepared a first draft shortly after the hearing and for one reason or another was not able to finalise such draft until much later.

41    Given the shortcomings in relation to the incomplete assessment of the evidence identified in the Chief Industrial Magistrate’s decision, the question is whether the Court should remit the matter to the Chief Industrial Magistrates Court for a rehearing, or whether it should proceed to address the substantive issues and reach its own conclusion on the evidence before it.

42    The decision of Kirby J in State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liq) (1999) 160 ALR 588 provides a fulsome discussion of the principles concerned with rehearings on appeal. Kirby J referred to the decision of Warren v Coombes (1979) 142 CLR 531 at 551- 552 as establishing the ‘traditional view’ of the issue:

[I]n general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge. In deciding what is the proper inference to be drawn, the appellate court will give respect and weight to the conclusion of the trial judge, but, once having reached its own conclusion, will not shrink from giving effect to it. These principles, we venture to think, are not only sound in law, but beneficial in their operation.

43    In his judgment, Kirby J referred to factors which went against an expectation that appeal courts remit matters instead of deciding the substantive issues, such as the improved ability to record courtroom proceedings, case management considerations and an increasing importance on documentary as opposed to oral evidence as factors encouraging appellate courts to draw their own conclusions from the evidence instead of remitting the matter to the lower court for redetermination. His Honour also critically examined the extent to which a trial judge could be said to have a particular advantage in assessing the credibility of a witness.

44    In the Court’s view, it is appropriate for the Court to consider the evidence as presented in the transcript of the proceedings in the Chief Industrial Magistrates Court and the decision of the Chief Industrial Magistrate, as well as the submissions before this Court and attempt to resolve the substantive issues in this case. The case does not particularly turn on the credibility of witnesses. No attacks were made by either counsel in the court below on the credibility of witnesses. Further, although the delay in judgment being handed down by the court below did not amount to a breach of procedural fairness per se, it is unfortunate and the Court is loath to add to the parties’ inconvenience by ordering a retrial of this matter.

45    The Court now turns to the substantive issues.

CONSTRUCTION OF CLAUSES 25.2 AND 25.3 OF THE AWARD

46    The company submits that the Chief Industrial Magistrate erroneously treated ‘on-call’ as having the same meaning as ‘standby’. Further it submits that being ‘on-call’ pursuant to the company’s roster did not have the consequence that the employee was on ‘standby’ and that to be ‘on-call’ simply meant that the employee might have been called back if required and available. It is submitted that there is nothing in the Award preventing an employer from telling an employee that he may be called back under cl 25.2 if he or she were available. However such a direction is distinct from being directed or instructed to be available and therefore on ‘standby’ in readiness to return to work and then to be ‘released’ from such readiness.

47    The company maintains that the only relevant obligation in the present circumstances was that contained in cl 25.2 (call back) and that the only payments that the company was required to make were call back payments under cl 25.2 of the Award. The call back provisions provided by cl 25.2 were separate and distinct to obligations under cl 25.3 and if they were called back they were paid accordingly pursuant to cl 25.2.

48    Lastly, it is submitted that the ‘system in place’ for the electricians did not operate as a standby system, rather it operated only as a ‘call back system’. It is submitted that there was no requirement for any of the employees to be on standby and that if a direction to hold in readiness was not given and if an employee was called back (as it is claimed occurred in the present circumstances) the employee was entitled to payment within accordance of the call back provisions in cl 25.2. Such circumstance prevailed regardless of whether the employees were on a roster to be potentially recalled and regardless of whether the mill operated 24 hours a day 7 days a week. Under the roster system the employees were not on standby as required by cl 25.3.

49    The electricians maintain that the provisions of cl 25.3 are clear and unambiguous and that his Honour was correct in finding that the electricians were required to standby by virtue of the operation of the roster.

Principles of Interpretation

50    Interpreting an industrial award requires an approach focusing on the actual words used and their plain, ordinary English meaning: see Bryce v Apperley (1998) 82 IR 448 at 452. If the words of the award have an unambiguous meaning, then that is the meaning that should be ascribed to them and there is no need for the Court to consider the expressed or supposed intention of the drafters of the award: see Norwest Beef Industries Ltd v Australasian Meat Industries Employees Union of Workers (WA Branch) (1984) 12 IR 314 at 331.

51    If there is a degree of ambiguity, then the Court must consider the relevant clauses of the award in their context. The principles in this respect are set out in Kucks v CSR Ltd (1996) 66 IR 182 at 184:

It is true that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand.

But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning.

52    In construing award provisions it is also important to have regard to the nature of the document, the manner of its expression, the context in which it operated and the industrial purpose it serves: see Amcor v CFMEU (2005) 222 CLR 241 at [95].

53    Bearing these principles in mind, it should first be noted that clauses 25.2 and 25.3 of the Award deal with separate and distinct circumstances that could possibly arise in the course of the company’s business. Clause 25.2 applies to circumstances where a worker is in fact called back to the mill to work outside of their normal shift. For the obligation of the company to pay an employee sums under cl 25.2 to be enlivened, there must be two things:

1.    The employer calls the employee back to the mill at a time when the employee is not scheduled to work.

2.    The employee in fact returns to the mill.

54    Clause 25.3 applies in circumstances where an employee might be called back to the mill and thus the company considers it expedient to place them on standby.

55    The plain English meaning of the words of cl 25.3 causes the Court to consider that for the obligation of the company to pay an employee sums under cl 25.3 to be enlivened, there must be three things:

1.    A requirement, issued by the employer, that the employee ‘stands by’.

2.    A period of some time during which the employee is required to hold themselves in readiness to work.

3.    An instruction from the employer that the employee is no longer required to ‘standby’.

56    In coming to this conclusion, the Court does not place any significance on whether an employee is told to ‘stand by’ or be ‘on call’. The words are interchangeable and provided that the intention of an employer to place a worker on standby in accordance with cl 25.3 is evident from the employer’s words and conduct, cl 25.3 will be enlivened.

DOES THE ROSTER SYSTEM AMOUNT TO A REQUIREMENT OF THE EMPLOYER THAT THE EMPLOYEE STAND BY?

57    At [17] of his decision the Chief Industrial Magistrate found that the roster was ‘adopted, authorised and instituted’ by the company. His Honour further found at [20] that the electricians were not expressly informed that they were required to hold themselves in readiness and were never informed that they were released. However at [22] the Chief Industrial Magistrate rejected the company’s submission that this was a necessary requirement for cl 25.3 to be enlivened. The roster itself imposed a set of duties on the electricians, including a requirement for them to be contactable by pager if they were scheduled as the electrician ‘on call’ and a requirement that they limit their social activities so as to be available to return on demand. His Honour concluded at [23] that:

An employee may be required to do something because they receive a specific verbal instruction from their supervisor, or they may be required to do it because it is part of their normal range of duties, or, as in this case, because they are rostered by their employer and as a consequence of being so rostered, they are required to conduct themselves in a particular fashion.

58    The Chief Industrial Magistrate found that all participants knew how the roster operated and that all participants considered that the release from standby happened automatically upon the conclusion of the employee’s rostered period. Therefore the requirements of cl 25.3 were satisfied.

59    In submissions, the company stated that the roster was merely a system implemented between the electricians to more efficiently allocate the time during which an electrician was expected to be ‘on call’ to return to the mill. The roster was not an instruction to an employee to remain on standby. This is demonstrated by the fact that if an employee who was rostered on as the electrician on call was unwilling or unable to return to the mill, that employee would not face sanctions for a failure to attend the call. The mill would merely find another employed electrician or would arrange for a contract electrician to attend. The company further stated that there was no evidence before the Chief Industrial Magistrate of the company issuing any instructions relating to the roster.

60    The company submits that there was no evidence from any of the employees that they were specifically given any direction or instruction to ‘hold in readiness’ or that at a later stage they would be ‘released’ from that readiness and that such conditions were essential to a finding that the roster operated in a way as maintained by the electricians. It is submitted that contrary to his Honour’s findings, the roster operated in a way that allowed an afternoon shift employee, at the end of his shift, to be free of any commitments and to ignore any call from the company if he were unavailable and that there is no evidence that countermands the evidence of these witnesses.

61    The company submits that the evidence showed that at no time between 2002 to 2008 was the afternoon shift employee given any instruction or direction ‘requiring’ him to hold in readiness from time to time or any specific time, nor were they ‘released’ from that readiness. Accordingly the roster operated in such a way that the provisions of cl 25.3 of the Award were never engaged.

62    In response, the respondent stated that both the company and the electricians had input into the formulation of the roster. The respondent stated that the only way that the roster could have worked in practice is if all parties viewed it as imposing an obligation to attend and the fact that the roster did work for a period of approximately 10 years is evidence that parties viewed it as a mandatory instruction. The respondent referred to evidence that a supervisor at the plant, Mr O’Shea, had urged an electrician who was nominated by the roster as being on call, namely Mr Davis, to not try and diagnose and fix problems over the phone but attend the mill. The respondent stated that this demonstrated that the employer viewed attendance in accordance with the roster as an obligatory requirement.

Does the roster amount to an instruction to the employee to ‘hold in readiness’?

63    Two cases are relevant on this point and the Court will briefly canvass each of them.

64    Chief Commissioner of Police v Kerley (2008) 171 IR 420 (‘Kerley’) concerned provisions of the Victoria Police Force (Police Officers, Protective Service Officers, Police Reservists & Police Recruits) Certified Agreement 1998. Clause 51(1) of that Agreement relevantly stated that:

Subject to the provisions of this Sub-Division a member who is rostered or otherwise directed to stand by on call for a resumption of duty on a day other than a Rest Day shall, for the duration of the period over which he remains on call in accordance with such requirement and subject to sub-paragraph (2) hereof…

Would be entitled to payment calculated at 17% of the base salary of a Senior Constable.

65    For after hours work, members of the Special Operations Group (‘SOG’) would be allocated into three teams of four: Alpha, Bravo and Charlie. If an incident required SOG to respond out of normal hours, Alpha would be the first to be dispatched. If additional SOG units were required, Bravo would be dispatched next, followed by Charlie.

66    Alpha team members were chosen by SOG Command without any input from SOG members. Each morning at a meeting, SOG members were asked to voluntarily nominate themselves to be placed upon either the Bravo or Charlie team by writing their names on a whiteboard. The information on the whiteboard was then used to generate a more formalised availability roster, with contact details for each team member.

67    Members of SOG claimed that they were entitled to ‘on call’ and ‘available for duty’ allowances for the periods which they nominated themselves for the Bravo or Charlie teams. Amongst other questions, the Full Court was required to decide whether by placing their names on the whiteboard the SOG members were ‘rostered, or otherwise directed’.

68    The respondent argued that the words ‘rostered or otherwise directed’ required a direction to issue from Command and that a direction be formalised and communicated from Command.

69    Moore J noted that the allowance was to compensate SOG members for the disability of being required to remain ready for duty in case they were called back. His Honour relevantly stated at [22]:

However, the reference in cl 52(1) to an officer who “… is rostered or otherwise directed to stand by available for resumption of duty…” is no more than the identification of any mechanism adopted from time to time by the Commissioner or those in a position of authority within the Police Force which results in particular officers constituting the group of officers who, at any particular time, were standing by ready and capable of resuming duty.

[…]

It is clear, in my opinion, [the provision] was not intended to create a precondition to the payment of the disability allowance in circumstances where, by agreement, officers who stand by have done so by entering an arrangement both agreed to and acted upon by supervising officers which identifies those officers on standby and who may be required to (and would be under a duty to) to resume work when requested. The expression “who is rostered or otherwise directed to stand by… for resumption of duty does not, in terms, require any particular degree or measure of formality.

70    Further at [27] his Honour relevantly stated:

However, in my opinion, it was unnecessary for the respondents to demonstrate that assuming membership of a team through the process involving the whiteboard, was involuntary. All the 1998 Agreement required was that they were rostered or directed. And as discussed earlier, that provision was designed to protect the officers and identify the specific circumstances in which they were under a duty or obligation to be on stand by. That occurred by the process of self-nomination on the whiteboard and the translation of what was on the whiteboard into a list of officers who could be called on to return to duty. The evidence establishes that from the time the names on the whiteboard were transcribed on to the availability sheet the identified officers were “rostered or otherwise directed” as that expression appears in cl 50(1) and cl 52(1) of the Award as incorporated in the 1998 Agreement.

71    At [35] his Honour stated inter alia:

There is little room to doubt, in my opinion, that the word “authorised” in the context of an officer being on stand by, refers to the result of any process within the Police Force where, with the knowledge and approval of a supervising officer, the officer is being designated on standby.

72    Logan v Otis Elevator Co Pty Ltd (1999) 94 IR 218 (‘Logan’) concerned an elevator repairman who operated a 24 hour repair service. He claimed that he was entitled to standby payment according to cl 14(g) of the National Metal and Engineering On-Site Construction Industry Award 1989 for periods outside of his normal shift hours where he was not attending a callout. Clause 14(g) stated:

Subject to any custom now prevailing under which an employee is required regularly to hold himself in readiness for a call back, an employee required to hold himself in readiness to work after ordinary hours shall until released be paid standing-by time at ordinary rates from the time which he is so to hold himself in readiness.

73    The Industrial Relations Court of Australia rejected Mr Logan’s claim to standby payment. The Court stated at [20]:

It seems to us that the purpose of cl 14(g) is to provide compensation to employees for being placed on a specific alert. The sub-clause operates where an employee is required to “hold himself in readiness to work after ordinary hours”. The employee shall “until released” be paid standing by time at ordinary rates “from the time which he is to hold himself in readiness”. The sub-clause envisages both a requirement by the employer that the employee hold himself in readiness to work on a specific occasion and a release from readiness. Standing by payments apply during the period between those notifications. The sub-clause is to operate on an ad hoc basis, as and when stand by instructions are given by an employer.

74    The Court considers that the circumstances of this case are more analogous to the circumstances of Kerley than to the circumstances of Logan. There was a roster in place which specified that certain employees would make themselves available for after hours duty. The fact that the roster was voluntarily entered into was not considered by the Full Court in Kerley to be relevant in determining whether there was an instruction. Provided that management knew and approved of the formation of the roster, that was sufficient to amount to an authorisation for the employee on call to hold himself or herself in readiness. The Full Court held that no specific degree of formality was required to constitute an instruction. Similarly in this case, the instruction to hold oneself in readiness commenced at the conclusion of the afternoon shift, when the electrician on call took the pager and mobile and the instruction to cease holding oneself in readiness came at the commencement of the morning shift at the end of the on call period when the electrician on call returned the pager and mobile phone.

75    Logan can be distinguished from the present circumstances on the basis that in that case there was no specific instruction in the form of a roster system to hold oneself in readiness. Rather, it was an expectation of the employer that Mr Logan be generally available to attend to emergency calls outside of hours, for which he would be paid call back rates if required to attend. There was no instruction, formal or informal, that Mr Logan should hold himself in readiness or be released from this period of readiness.

76    If the electricians had been instructed by the company that collectively they would all be responsible for attending to out of hours breakdowns at any time and if the company had a policy of simply calling one of the electricians in no particular order of priority, then the circumstances of the matter at hand would more closely resemble Logan than Kerley. However, the implementation of a formal roster indicates that Kerley should be followed.

77    It is certainly the case that there was a degree of flexibility in the actual implementation of the roster. The electricians could nominate the weeks when they would and would not be available to be on call after hours. This could involve the electricians switching weeks between themselves as needs outside of work dictated.

78    In the Court’s view this fact alone does not negate the existence of the roster as a form of tacit instruction from the company for one respondent to hold themselves available each week for after hours calls. In Kerley, the SOG members who were not on Alpha team were completely free to determine for themselves what days they would and would not be available for duty. This fact did not displace the SOG members’ entitlement to an allowance for standing by if they nominated themselves for Bravo or Charlie team. In the same way, the roster operated so that the company knew that one of the electricians would be available at all times for call backs. The fact that the electricians had a high degree of latitude in determining which of the electricians it would be does not matter.

79    The company also referred to evidence that suggested that there were instances where a respondent who according to the roster was meant to attend out of hours call backs did not respond and instead found another of the electricians to attend. The company submitted that this negated the view that the roster constituted a binding instruction from the company to the respondent.

80    The evidence from Mr O’Shea indicates that on very rare occasions, an electrician who was stated by the roster to be on call would not be available to attend a call back. In those circumstances, another electrician, a contractor or Mr O’Shea himself would be asked to attend the mill to resolve the problem. However, Mr O’Shea indicated that it would not be acceptable for an electrician who was ‘rostered on’ to not respond at all to calls from the mill and if they failed to respond to the call by either attending or arranging for someone else to attend, then they would be counselled by the company’s human resources staff.

81    Mr Chilcott’s evidence states that the electricians were not free to simply disregard a call back while they were rostered on, but if they were sick or otherwise incapacitated the relevant electrician would find another electrician to attend the callout. According to Mr Chilcott’s evidence, the responsibility was on the electrician who was nominated by the roster to either respond to the call personally or find a replacement.

82    Mr Campbell stated in cross examination that the company informed the electricians that they would be expected to respond in an immediate manner and to attend breakdowns. Mr Campbell emphasised the word ‘and’ in his cross examination. The Court infers that Mr Campbell was seeking to emphasise that when an electrician nominated by the roster received a call from the mill informing him that there was a problem, he would be expected to first respond to the call and then either attend personally if it could not be fixed over the phone or find someone else to attend. It was the rostered electrician’s responsibility to do this.

83    The Court concludes from this evidence that although in very limited instances a rostered electrician may have been able to delegate the duty of responding to a breakdown at the mill, this was acknowledged by all witnesses to be a rare occurrence. The existence of occasional exceptions to the operation of the roster does not negate the general effect of the roster as establishing a period when a specific electrician would be on call and expected to respond to a breakdown.

84    The affidavits of Messrs Campbell, O’Shea and Chilcott deny that an instruction was given to employees not to consume alcohol or to travel outside of a certain distance from the mill if they were on call. The evidence of Mr Campbell and Mr O’Shea was tempered slightly in cross examination. Both acknowledged that there was an expectation of the company that the employee or employees who were intending to work would not consume alcohol or drugs. As mentioned previously, Mr Chilcott also stated in cross examination that he was entirely unaware of any instruction being given along those lines.

85    The Court finds that even if the instruction was not expressly given by Mr O’Shea or another supervisor to the electricians, there was an expectation of the company, as set out in its drug and alcohol policy, that ‘employees not commence work or return to work while under the influence of alcohol or drugs’. The policy clearly applies to employees on standby, as they were in a position where a return to work was a likely possibility. The Court does not interpret this policy to mean that an employee on standby could not consume any alcohol at all. However, the policy does make clear the company’s expectation that an employee could not consume alcohol past a point where it would be unsafe for the employee to drive or work. This would place a limitation on the social activities of the electricians while they were on call.

86    With respect to the question of a purported requirement for employees on call to be a certain distance from the mill, the Court again finds that this may not have taken the form of an explicit instruction as to where an employee could or could not go while on call. However, the evidence of Mr Campbell and Mr O’Shea indicated that it was the expectation of company management that employees respond promptly to call backs and that any activity which would compromise the ability of the employee to respond promptly would not be permitted. The Court finds that this also placed a limitation on the activities of the employees on call.

87    Furthermore, the evidence of Messrs Campbell, O’Shea and Chilcott indicates that at a minimum, the rostered electrician was expected to be the company’s first point of call for any electrical breakdowns outside of normal shift hours. This therefore indicates that the company obtained the benefit of having someone responsible for responding to the problem and organising a response, even if the person responding was not the rostered employee personally. The respondent who was rostered on endured the disability (to adopt the word used in Kerley) of being required to keep themselves in a position to respond to the mill’s call and to organise the response to the problem. The participation of the electricians in the roster was vital to the company’s operations. Without it, the company would not have been able to operate its continuous shifts. The evidence confirms that the effect of the roster was an instruction that the rostered employee stand by.

IS THERE A CONTRACTUAL OBLIGATION FOR THE RESPONDENTS TO RESPOND TO OUT OF HOURS BREAKDOWNS AT THE MILL?

88    In submissions before this Court the company noted that the Chief Industrial Magistrate did not find that there was a contractual obligation on the part of the electricians to return to the mill outside of shift hours to fix electrical problems. The company further submitted that the contract did not contain any such requirement. The roster did not form part of the contract and there was no instruction that an electrician hold himself in readiness pursuant to the roster and pursuant to the terms of the Award contained in the written documents comprising the contracts for employment. Therefore, the Chief Industrial Magistrate erred in finding that cl 25.3 operated independently of any contractual obligations.

89    In a Notice of Contention filed on 12 March 2012, the respondent submitted that the Chief Industrial Magistrate’s decision could be supported on the basis that the Chief Industrial Magistrate should have concluded that the electricians were contractually obligated to hold themselves in readiness for call back to work in a manner that engaged cl 25.3 of the Award. In submissions on this point, the respondent stated that the company made it clear to the electricians, either in the form of oral instructions or in the letters stating the terms of employment that it was a term of their employment that the electricians participate in the roster system.

90    In his Honour’s decision the Chief Industrial Magistrate stated that if the maintenance electricians were required to be on standby within the meaning of cl 25.3, their entitlement to payment flows from the Award irrespective of any express or implied term in the contract of employment. His Honour stated that there was an obligation imposed by the Award for the company to pay the electricians standby rates pursuant to cl 25.3 if the company instructed the electricians to hold in readiness. This obligation was a corollary of the company’s common law right to establish working hours in a manner that suited its business.

What is the interaction between an industrial award and a contract of employment?

91    The Award was created pursuant to s 897 of the Act, which states:

Relationship between employment agreements and awards

An award prevails to the extent of any inconsistency with an employment agreement.

92    In Byrne v Australian Airlines Ltd (1995) 185 CLR 410 the High Court decided that terms of industrial awards are not implied into contracts of employment. The right of the electricians to claim what they say are unpaid wages is rooted in s 720 of the WR Act. It is not an action for common law breach of contract.

93    In Gapes v Commercial Bank of Australia (1980) 37 ALR 20 (‘Gapes’) Smithers and Evatt JJ stated at 22-23:

In the judgment appealed from particular reference is made to the observations of the Chief Justice, Sir John Latham, in Amalgamated Collieries of WA Ltd v True (1938) 59 CLR 417 at 423-4 in the following terms, namely:-

When any person is employed to do work to which an award applies, the parties are bound by a contract. Their legal relations are in part determined by the contract between them and in part by the award. The award governs their relations as to all matters with which it deals.

…

But an award never deals with all the matters which affect the relations of any particular employer and any particular employee. The creation of the relation of employer and employee depends upon an agreement between them and not upon any award. Thus the existence of the obligations under an award in relation to a particular employer and employee always depends on the existence of a contract between them. So, also, there are terms of their relationship which do not depend upon any award. For example, the employee must always obey the lawful orders of his employer, but awards do not commonly include a term to that effect. In my opinion, however, it is unnecessary in this case to work out in detail the basis of the relations created by employment under an award. For the purposes of this case it is sufficient to refer to what was said in a unanimous judgment of this court in Mallinson v Scottish Australian Investment Co Ltd (1920) 28 CLR 66 at 73: ‘Apart from the Act [the Commonwealth Conciliation and Arbitration Act] the right to receive wages sprang from the existence of the relationship of master and servant and the performance of services therein, and notwithstanding the Act it is still the existence of this relationship and the performance of services therein which confers on the employee the right to remuneration — all that the Act has done in this respect is to substitute another method of determining the amount of remuneration.’

But we do not think these observations of the Chief Justice throw doubt on our views expressed in these reasons. The problem in each case is to identify the topic with which the award deals and to ascertain what it says on that topic. It is the provision made by the award on that topic which governs. It is clear that one topic with which this award deals and therefore governs embraces the amount of salary, the times of payment of the components thereof, and the nature of the obligation to pay such components as and when specified in the award, namely whether that obligation is conditional or unconditional. Every obligation in the award is conditional on the existence of, at least, a contract of employment. But once that condition is fulfilled the award operates and governs the obligations of the parties to the extent that it deals therewith.

94    In the Court’s view, following Gapes, once it is established that a contract of employment existed between the company and the electricians, the Award governs the obligations of the company in respect of payment of standby rates to the electricians. Therefore, provided that the roster and instructions given by the company to the respondent meet the criteria necessary to enliven cl 25.3 (as discussed above at [29]), the company’s obligation to pay the sums required by cl 25.3 arises independent of the contract of employment. It is not necessary for the electricians to point to a clause in the contract that establishes this right.

95    However, if this view is incorrect, then the Court proceeds to consider whether compliance with the roster system amounted to a term of the electricians’ contracts of employment. A letter from the company to Mr Fahy dated 19 December 2000 sets out a summary of the conditions of Mr Fahy’s employment with the respondent. Such letter states, inter alia:

Work hours may vary. You will be expected to work some overtime hours. A requirement of the position is that you work periods “on call” which requires response in an immediate manner to attend break-down situations.

Letters containing the same term were given by the company to the other electricians.

96    This portion of the letter clearly establishes that a term of the contract of employment is that the electricians would periodically be expected to respond to break down situations at the mill outside of normal hours of employment on an ‘on call’ fashion.

97    In contracts of employment there is an implied term that an employee comply with all reasonable instructions of the employer: see, for example, R v Darling Island Stevedoring and Lighterage Co Ltd; ex parte Halliday and Sullivan (1938) 60 CLR 601. As this Court has concluded above at [73], the roster amounted to an instruction by the employer as to when an employee was to make themselves available for call backs. Although the roster might not have been an express term of the contract of employment between the company and the electricians, it was a manifestation of a contractual term. Therefore, the term of the contract was subject to the provisions of the Award.

CONCLUSION

98    It follows from the above reasons that the orders of the Chief Industrial Magistrate should be affirmed. Accordingly, the Court dismisses the appeal.

Associate:

Dated:    14 September 2012