FEDERAL COURT OF AUSTRALIA

Shop, Distributive & Allied Employees’ Association v Harris Scarfe Australia Pty Ltd [2014] FCA 283

THE COURT ORDERS THAT:

1.    The appeal be dismissed.

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

REASONS FOR JUDGMENT

BUCHANAN J:

1    On 30 May 2013 the appellant commenced proceedings against the respondent before the Industrial Relations Court of South Australia on behalf of Benjamin Roe, who worked as a casual employee of the respondent on 26 January 2013, Australia Day.

2    The claim was for unpaid wages. The basis of the claim was stated succinctly as follows:

1.    Benjamin Roe is a casual employee at the Harris Scarfe Marion store.

2.    Clause 6.7 of the Harris Scarfe Agreement states:

“Where a State or Territory substitutes a public holiday from the actual day of celebration (“the actual public holiday”) to another day (“the substitute day”) under its relevant legislation and a store opens for trade on the actual public holiday then:

…

(c)    If a team member is rostered to work on the actual public holiday and not the substitute day, the team member shall receive the standard public holiday benefits on the actual day and not on the substitute day ..... ”

3.    Australia Day was on Saturday the 26th of January this year. This was the actual public holiday. The state government substituted the public holiday to Monday the 28th of January. This was the substitute day.

4.    Benjamin Roe worked on Saturday the 26th of January (the actual day) and not Monday the 28th of January (the substitute day).

5.    Clause 6.7.4(c) applies to Benjamin Roe and as such he should have received the standard public holiday benefits for work on Saturday the 26th of January.

6.    This did not occur.

7.    The standard public holiday benefit applicable to Benjamin Roe is the payment of public holiday rates, ie double time for work on this day.

3    The respondent denied liability. Its answering position was stated as follows:

1.    The dispute relates to the Applicant’s contention that he has been underpaid for the work he was engaged to do on Saturday 26 January 2013 in his position as a casual Sales Assistant with the Respondent.

2.    The Applicant disputes the Respondent’s application of sub-clause 6.7.4 contained within clause ‘6.7 Public Holidays’ in the Harris Scarfe Agreement 2011 (the 2011 Agreement).

3.    The Respondent submits that sub-clause 6.7.4 of the 2011 Agreement applies to persons who are employed by the Respondent in full-time and part-time positions.

4.    The Respondent further submits that when read within the context of the entirety of clause ‘6.7 Public Holidays’ it is clear that sub-clause 6.7.4 does not apply to persons engaged on a casual basis in the Respondent’s employ (which includes the Applicant’s position).

5.    The Respondent denies all liability in relation to the Applicant’s claim and contends that the Applicant has been paid pursuant to the terms of the 2011 Agreement, in accordance with the longstanding custom and practice of the enterprise and by having reference to the comparative provision in the preceding 2004 Agreement and that no back pay is owed to the Applicant.

4    The agreement upon which the claim was based was an enterprise agreement within the meaning of s 50 of the Fair Work Act 2009 (Cth) (“the FW Act”), which provides:

50    Contravening an enterprise agreement

A person must not contravene a term of an enterprise agreement.

Note 1:    This section is a civil remedy provision (see Part 4-1).

Note 2:    A person does not contravene a term of an enterprise agreement unless the agreement applies to the person: see subsection 51(1).

5    The Industrial Relations Court of South Australia is invested with jurisdiction to hear the claim (ss 12 and 539 of the FW Act). The claim was heard by Industrial Magistrate M Ardlie who, on 18 September 2013, dismissed it. It is from that judgment that the present appeal has been brought. The hearing of the appeal is assigned to this Court by s 565 of the FW Act.

6    Entitlement to additional pay for working on a public holiday or substituted day arises under cl 6.7 of the Harris Scarfe Agreement 2011 (“the Agreement”). Clause 6.7 provides as follows:

6.7    Public Holidays

6.7.1    General public holidays

All permanent full-time and part-time Employees will be granted the following holidays without deduction of pay:

•    NewYear’s Day

•    Australia Day

•    Labour Day

•    Good Friday

•    Easter Saturday

•    Easter Monday

•    Anzac Day

•    Queen’s Birthday

•    Christmas Day

•    Boxing Day (Proclamation Day in SA)

…

6.7.3    Additional public holidays

Permanent Employees shall be entitled without loss of pay to an additional public holiday in a State or Territory or locality within a State or Territory when such public holiday is proclaimed or gazetted by the authority of the Commonwealth Government or of a State or Territory Government and such proclaimed or gazetted holiday is to be observed generally by persons throughout the State or Territory or a locality.

6.7.4    Where a State or Territory substitutes a public holiday from the actual day of celebration (“the actual public holiday”) to another day (“the substitute day”) under its relevant legislation and a store opens for trade on the actual public holiday then:

a)    If a team member is ordinarily rostered to work on the actual public holiday and the substitute day, then that team member shall elect which day is to be their public holiday and receive the standard public holiday benefits on that day. The other day shall then be a normal rostered day, subject to

b)    Additional Christmas Holiday loading.

c)    If a team member is rostered to work on the actual public holiday and not the substitute day, the team member shall receive the standard public holiday benefits on the actual day and not on the substitute day.

d)    If a team member is rostered to work on the substitute day and not the actual public holiday, the team member shall receive the public holiday benefits on the substitute day.

e)    Additional Christmas Holiday Loading.

In the case of Christmas Day where substitution occurs by operation of the law of a State or Territory, work on 25 December will attract an additional loading of half a normal day’s work in addition to the Saturday/Sunday rate and the team member will also be entitled to the benefits of the substitute public holiday.

f)    Where a choice is required, a Team Member will be asked to make a choice and needs to advise the Company at least 2 weeks prior to the holiday of their chosen public holiday.

6.7.5    Work done on any one of the public holidays prescribed in this Clause shall be voluntary and will be paid at the rates proscribed in clause 6.6.2(b), subject to the provisions set out in clause 6.7.4(a).

…

6.7.7    Work on a public holiday

a)    All work on a public holiday is voluntary.

b)    Where a public holiday falls on a day on which an Employee would otherwise be rostered to work, the Employee may elect to work on the public holiday at a penalty rate in accordance with the rate specified in Clause 6.6.2(b)(ii) for any overtime hours worked. Provided that the minimum payment on any public holiday shall be 3 hours at the appropriate penalty rate.

c)    Where a public holiday falls on a day an Employee is not rostered to work and the Employee elects to work on that day, the Employee shall be paid in accordance with the rate specified in Clause 6.6.2(b)(ii) with a minimum payment as for 3 hours worked. Such payment shall not be in addition to the entitlement pursuant to 6.7.8.

d)    Where a public holiday falls on a day on which an Employee would otherwise be rostered to work and the Employee does not work, he/she shall be entitled to the day off without loss of pay.

e)    All casual Employees working on public holidays shall be paid in accordance with the rate specified in Clause 6.6.2(b)(ii) with a minimum payment for 3 hours worked.

(Emphasis added.)

7    It will be noted that cl 6.7.4 applies to a “team member”. The definition of team member in the Agreement accords with the definition in an earlier agreement of “Sales Assistant”. It was not disputed that Mr Roe was a team member on 26 January 2013. However, that served to identify the work on which Mr Roe was engaged, rather than the nature of his employment. It does not answer the question of whether cl 6.7.4 applies to a casual employee.

8    Clause 6.7.4 is concerned with identification of the day on which an entitlement to any additional pay might arise. In my view, cl 6.7.4 is not concerned directly with specifying the entitlement to additional pay for working on a public holiday or the level of that pay. That is done elsewhere.

9    In the case of a casual employee, the entitlement to payment is directly stated in cl 6.7.7(e) (emphasised earlier). The level of payment is stated in cl 6.6.2(b)(ii). Clause 6.6.2(b)(ii) provides as follows:

6.6    Overtime

…

6.6.2    Full-time and Part-time Employees

…

b)    Overtime on Sundays and Public Holidays

…

ii.    Public Holidays

If a full time or part time Employee works overtime on a public holiday, the employee must be paid at the rate specified below, based on the applicable ordinary time rate;

•    South Australia; double time

•    All other states and Territories: double time and one-half

…

10    It is clear that, nominally, cl 6.6 applies to overtime work – i.e. work in addition to ordinary hours and in that context provides overtime entitlements for full-time and part-time employees. However, cl 6.6.2(b)(ii) also provides a point of reference for the operation of cl 6.7.7 when full-time and part-time employees work on public holidays. All such work is voluntary (cl 6.7.7(a)). Where such work is done (rostered or not) under the Agreement by full-time or part-time employees it is to be paid for at overtime rates (cl 6.7.7(b), (c) and (d)). Clause 6.6.2(b)(ii) also applies to work on public holidays by casual employees (cl 6.7.7(e)). In the case of a casual employee, the rate is to be double time (cl 6.6.2(b)(ii), cl 6.7.7(e)). That is to say, the rate is to be double the ordinary time rate for a full-time or part-time employee. Apparently, no casual loading need be paid.

11    There was no disagreement that if Mr Roe had worked on a public holiday within the meaning of cl 6.6.2(b)(ii), then he would have been entitled to the payment there specified. However, although Mr Roe worked on Saturday 26 January 2013, no entitlement arose for him under cl 6.6.2(b)(ii). That was because of the combined operation of the the FW Act and the Holidays Act 1910 (SA) (“the State Act”).

12    Section 115(1) of the FW Act nominates 26 January (Australia Day) as a public holiday. However, s 115(2) provides:

115    Meaning of public holiday

…

Substituted public holidays under State or Territory laws

(2)    If, under (or in accordance with a procedure under) a law of a State or Territory, a day or part-day is substituted for a day or part-day that would otherwise be a public holiday because of subsection (1), then the substituted day or part-day is the public holiday.

13    Under the State Act, in 2013 Monday 28 January became substituted for Saturday 26 January as the public holiday. That substitution was effective for the operation of cl 6.7.7(e).

14    Mr Roe’s claimed entitlement did not arise under cl 6.7.7(e), but rested on the operation of cl 6.7.4(c), because he worked on Saturday 26 January 2013, but did not work on Monday 28 January 2013 (the day which had become the public holiday for the purpose of cl 6.7.7(e)). In particular, Mr Roe’s claimed entitlement depended on the proposition that he was “rostered to work on the actual public holiday and not the substitute day”.

15    The learned Industrial Magistrate concluded that Mr Roe was not entitled to an additional payment for working on 26 January 2013. The claim made on his behalf was dismissed.

16    Paragraph 77 of the decision under appeal captures the essential reason for the outcome:

77    When the whole of cl 6 is considered, in particular how the clause relates to permanent employees, when the words team member appear in cl 6.7.4 coupled with the words “rostered to work” the sensible industrial outcome is that casual employees are not included. …

(Citation omitted.)

17    A footnote at that point said:

21    Clause 6.2 refers to rosters and specifically mentions full time and part time employees.

18    I agree with the essence of this reasoning. I shall explain why in greater detail.

19    I reject, however, any criticism of the decision to the effect that insufficient reasons were provided. I have extracted one element of a thorough examination of the parties’ arguments and the relevant terms of the Agreement. The learned Industrial Magistrate correctly identified and sufficiently disclosed that the key flaw in Mr Roe’s case was that he was not “rostered to work” in the relevant sense.

20    The claim that the Agreement obliged an additional payment to Mr Roe must be primarily examined by reference to the terms of, and overall context set by, the Agreement itself. On the appeal, submissions were made about the terms of earlier agreements from 1997 which were concluded after a test case about public holidays which was conducted before the Australian Industrial Relations Commission in 1994. However, those submissions did not identify any respect in which it might be necessary to depart from the meaning suggested by the terms of the Agreement itself, and they do not, therefore, require separate analysis.

21    The Agreement provides for full-time employment, part-time employment and casual employment. Mr Roe was, at the relevant time, a casual employee.

22    Moore J (sitting as the Industrial Relations Court of Australia) in Reed v Blue Line Cruises Ltd (1996) 73 IR 420 (“Reed”) said, of casual employment:

A characteristic of engagement on a casual basis is, in my opinion, that the employer can elect to offer employment on a particular day or days and when offered, the employee can elect to work. Another characteristic is that there is no certainty about the period over which employment of this type will be offered. It is the informality, uncertainty and irregularity of the engagement that gives it the characteristic of being casual.

23    I applied the same approach in Thompson v Big Bert Pty Ltd t/as Charles Hotel (2007) 168 IR 309, saying (at [58]):

58    … Traditionally, casual employees were regarded as employed only for the duration of a specific engagement — usually day to day. This may be contrasted with the traditional assumption that the period of engagement of a full-time or part-time employee was week to week as usually reflected in a formal period of notice for termination. These assumptions were not universally applicable and were susceptible to modification — e.g. to a monthly engagement. They are also subject to any relevant modification by or under a statute — e.g. by award.

24    In the present case, the Agreement confirms the traditional position. Casual employees are engaged as such and are paid a casual loading. They do not receive annual holidays or other forms of leave. They are not subject to provisions concerning termination of employment or redundancy.

25    Of course, casual employment may become regular and systematic. The Agreement itself recognises that possibility. Nevertheless, the feature of separate engagements for casual employees, shift by shift, is evident in the Agreement even in such cases.

26    On the appeal it was argued that Mr Roe was “rostered” for his work. I do not think the term is apt to describe the position. There is a significant difference between a roster for full-time or part-time employees, which involves an allocation of work which they have agreed to undertake, and an offer of casual engagements, which a casual employee is usually free to accept or decline. The consequence for a casual employee of declining a “rostered” shift may be that no more are offered but the consequence for a full-time or part-time employee is that they have refused to work and have breached their contract of employment.

27    No predictability of engagement can affect the legal character of casual employment or the obligations under the Agreement which result from its character.

28    The oral evidence before the learned Industrial Magistrate illustrated that the practices of the respondent were not inconsistent with the usual understanding of the legal position.

29    The evidence in chief of the respondent’s chief witness included:

Because a casual doesn’t get a roster, is that what you’re - - - ? ---They get a roster but they don’t get a regular roster or an ordinary roster. They may not get work every week.

30    Cross-examination strengthened the position:

… Would the lack of the phrase “ordinarily rostered” in clause (c) suggest that that is then deemed to be more expansive and include all team members? ---No. It’s what a roster is. It’s something that people would be able to rely on and we don’t have ongoing rosters for casuals. We just have the hours that they work in a particular week if we give them work. So we give them shifts. Roster – the term “roster” for us is for permanents.

…

---Every casual decides if they want to work. They’re offered shifts and they say if they can do them. We have their availability but they will sometimes say, “I’m not available on that day now.”

31    The terms of the Agreement also confirm that rostering has a special significance for full-time and part-time employees, but not for casuals.

32    Both full-time and part-time employees are engaged on a weekly basis, are entitled to holidays and must normally be given notice of termination. For full-time employees, normal weekly hours are an average of 38 per week, over a 4 week 152 hour cycle. Up to 48 hours may be worked in a week. Under cl 5.5.1(b)(v) of the Agreement, full-time employees:

5.5    Full Time Employment (except CLEANERS – Refer Clause 5.11)

5.5.1 (b) v.    must be rostered in such a way that the Employee shall have at least 2 consecutive days off per week or 3 consecutive days off per fortnight, unless the Employee agrees otherwise;

…

33    A part-time employee may be engaged for between 48 and 144 ordinary hours in the 4 week cycle. Under cl 5.6.1(e)(vii) of the Agreement, part-time employees:

5.6    Part Time Employment (except CLEANERS – Refer Clause 5.11)

5.6.1 (e) vii.    must be rostered in such a way that the employee shall have at least 2 consecutive days off per fortnight unless the Employee concerned agrees otherwise;

…

34    Clause 6.2 provides:

6.2    Rosters

6.2.1    Full-time and part-time employees must be provided in advance with regular notice of their work rosters. Notice of any change of rosters for full-time and part-time employees shall be given at least one week prior to the change unless:

a)    the Employer and the Employee mutually agree to a lesser period of notice;

b)    the Employee disagrees with the proposed change in the roster in which case 14 days notice of the change shall apply, during which time there shall be discussion between the Employer and the Employee affected to attempt to resolve the disagreement.

6.2.2    The Employer will give reasonable consideration to issues of family responsibilities of the Employee (such as sporting commitments of young family members) and the ability of the Employee to arrange safe transport to and from work and conversely the Employee shall respect that the reasonable needs of the Employer’s business must be taken into account in setting and varying rosters.

35    Rosters for full-time and part-time employees thus represent an allocation of their contracted weekly hours of work. They are not just a forecast of that work, although they serve that purpose. On the other hand, a forecast of work for a casual employee represents an offer to engage the casual on the stipulated occasions. Those occasions are separate.

36    The arrangements under the Agreement reflect traditional understanding of the matters to which I referred earlier. It was not inapt of the learned Industrial Magistrate to refer, in a shorthand way, to “the sensible industrial outcome” when he construed cl 6.7.4.

37    I agree that cl 6.7.4(c) does not refer to the arrangements under which casuals like Mr Roe worked. He was not rostered to work on Saturday 26 January 2013, he was engaged as a casual to work on that day. Similarly, he was not rostered off on Monday 28 January, or any other day. He was not engaged to work on Monday 28 January 2013.

38    The learned Industrial Magistrate was correct to dismiss the claim, for reasons which he gave. The appeal must be dismissed also.

Associate:

Dated:    27 March 2014