FEDERAL COURT OF AUSTRALIA

Construction, Forestry and Maritime Employees Union v Sydney International Container Terminals Pty Ltd [2024] FCA 490

ORDERS

THE COURT ORDERS THAT:

1.    The proceeding 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

RANGIAH J:

1    The first respondent, Sydney International Container Terminals Pty Ltd (SCT), conducts stevedoring operations in Sydney. The second respondent, Brisbane Container Terminals Pty Ltd (BCT), conducts stevedoring operations in Brisbane. I will refer to the respondents together as “the Employers”.

2    The employees of SCT and BCT were covered by the Sydney International Container Terminals Pty Limited and Brisbane Container Terminals Pty Limited and Maritime Union of Australia Enterprise Agreement 2015 (the 2015 Agreement).

3    Between 12 and 19 June 2021, a number of employees took protected industrial action by failing or refusing to work their allocated shifts. The Employers refused to pay the employees for those shifts, relying upon ss 470(1) and 471(4) of the Fair Work Act 2009 (Cth) (the FW Act). Section 470(1) prohibits an employer from paying an employee for the time when the employee takes protected industrial action. Section 471(4) provides that if there is a partial work ban and the employer has given written notice, the employee is not entitled to any payments in relation to the industrial action period.

4    In this proceeding, the applicant, the Construction, Forestry and Maritime Employees Union (the Union), contends that, contrary to the Employers’ position, ss 470(1) and 471(4) of the FW Act had no application to a particular category of renumeration payable under the 2015 Agreement to employees who had worked a certain number of hours in the year (the Employees). The Union alleges that the Employers contravened ss 50 and 323 of the FW Act by their refusal to make those payments to the Employees.

5    The dispute turns upon the proper construction of the 2015 Agreement. The Union’s argument is that the Employees were entitled to the relevant renumeration regardless of whether they performed any work and regardless of whether they were ready and willing to perform work, such that ss 470 and 471 had no application to those payments. The Employer’s argument is that the Employees were not entitled to such payments unless they were at least ready and willing to perform their rostered shift, and, accordingly, ss 470 and 471 required or authorised their refusal to pay.

6    I will explain the facts of the case and set out the relevant clauses of the 2015 Agreement and the legislative provisions before considering the parties’ submissions.

The facts

7    The facts are not in dispute, and many of the relevant facts are the subject of agreement under two Agreed Statements of Fact.

8    SCT employed a number of employees in stevedoring operations at the Port Botany Terminal (the Port Botany Employees) in New South Wales. BCT employed a number of employees in stevedoring operations at the Port of Brisbane Terminal (the Port of Brisbane Employees) in Queensland.

9    The 2015 Agreement was approved by the Fair Work Commission on 18 November 2015 and was in operation during the period from 25 November 2015 to 16 August 2021. The 2015 Agreement covered the Employers, their employees and the Union.

10    On 6 June 2021, the Union gave notice to the Employers under s 414(2) of the FW Act that the Port Botany Employees and Port of Brisbane Employees who were members of the Union intended to engage in protected industrial action. The industrial action included stoppages of work and partial work bans.

11    On 11 June 2021, the Employers sent written notices to their respective employees pursuant to s 471(4)(c) of the FW Act and reg 3.23(2) of the Fair Work Regulations 2009 (Cth) stating that if any employee chose to engage in a partial work ban:

(a)    they would not be entitled to any payment for any day on which they engaged in a partial work ban;

(b)    the Employers would refuse to accept the performance of any work by the employee until prepared to perform all of their normal duties; and

(c)    they would not pay the employee during the period of the industrial action, including any day on which the employee engaged in a partial work ban.

12    The Amended Statement of Claim attaches Schedules A, B and C which lists a number of the Port Botany Employees. As at 12 June 2021, each of the employees referred to in those Schedules had worked at least 1,501 annual hours in the period since 1 July 2020.

13    The Amended Statement of Claim also attaches Schedules D, E, F, G H, I and J listing a number of the Port of Brisbane Employees. As at 12 June 2021, each of the employees referred to in those Schedules had worked at least 1,560 annual hours in the period since 1 July 2020.

14    In accordance with the Roster Rules in Schedule 4 of the 2015 Agreement, each of the Port Botany Employees named in Schedules A, B and C was allocated by SCT to work on 12, 13 and 15 June 2021 respectively on the shift identified in the Schedules. On those dates, the Port Botany Employees named in Schedules A, B and C respectively engaged in protected industrial action.

15    In accordance with the Roster Rules in Schedule 4 of the 2015 Agreement, each of the Port of Brisbane Employees named in Schedules D, E, F, G, H, I and J was allocated by BCT to work on 12, 14, 15, 16, 17, 18 and 19 June 2021 respectively on the shift identified in the Schedules. On those dates, the Port of Brisbane Employees named in Schedules D, E, F, G, H, I and J respectively engaged in protected industrial action.

16    The Employers refused to pay the Employees for eight hours at the Level 1 ordinary time rate in respect of each shift they failed or refused to work.

The 2015 Agreement

17    Clause 3 of the 2015 Agreement provided that there were two phases to the operation of the Agreement, Phase 1 and Phase 2. This proceeding is only concerned with Phase 1.

18    Clause 5 described the intent of the parties to the Agreement as follows:

5.1    It is the intent of the Parties to establish employment arrangements that enable the Company to successfully establish grow and maintain world-class container terminal operations in those ports where it seeks to do so and which reflect the Company's mission to be a global market leader In container port operations and logistics services through innovation and continual business improvement.

19    Clause 6 described the nature of the employment as follows:

6.1    An employee covered by this Agreement will be employed as:

6.1.1    A full time employee engaged as such for an average of 30 hours per week in accordance with this Agreement in Schedule 4; or

…

20    Clause 15 dealt with Remuneration and provided in part:

15.1    Employees shall be paid at the Level 1 ordinary rate or classification rate (as applicable) in accordance with the rostering details set out in Schedule 4 of this Agreement…

…

21    Clause 15.4 set out the ordinary rates for full-time employees at each Level. Relevantly, the Level 1 ordinary rate was $42.45 per hour of work from 1 March 2018.

22    Clause 15.6 dealt with the payment of overtime for shift extensions and additional shifts after employees had worked the required annual roster hours.

23    Clause 16 provided, relevantly:

16.1    The Company will at all times be able to roster and allocate any employee individually in a flexible manner in accordance with the arrangements in this Agreement.

16.2    Employees shall work in accordance with the arrangements detailed in the following sub-sections and the roster and related rules in Schedule 4…

16.3    Normal working shifts shall be 8 hours in duration.

16.4    Employees shall be responsible for ascertaining when they are next required for work. The Company will provide a facility for that to occur, which will include SMS and/or e-mail advice.

16.5    For Brisbane, notification of work requirements for the following day will be available before 1500 Monday to Friday. Notification of work requirements for weekend shifts (commencing with day shift Saturday, through to first shift Monday (night shift) will be available before 1500 on Friday. Where a public holiday falls on a Friday or Monday, allocation for the long weekend will be done on the day prior to long weekend, consistent with the above. Where a public holiday falls on another weekday, allocation will include the day after the holiday as well as the holiday.

16.6    For Sydney, the allocation times above will be adjusted to 1400 to reflect the intended earlier shift start times at that Terminal.

16.7    The Parties recognise that emergent circumstances may at times impact on the Company’s ability to meet this timing, and the Company will consult with the Union and employees where it anticipates that this may be an issue.

16.8    In the event of an employee failing to report for duty, other employees shall still immediately commence and continue work pending a replacement employee being sourced or, if necessary, an adjustment made to the work program.

16.9    The Company may contact employees who have been allocated to a day off (other than a scratch day) on short notice to provide additional labour on a voluntary basis, provided no employee will be contacted between 2230 hours and 0500 hours. Notification of employees shall be performed by employees identified in Clause 15.8. Late call-in’s that are accepted will be paid for the shift from the commencement time of the shift. The Parties agree to monitor usage of the above arrangements and address any issues that may arise.

…

16.13    The Union and employees guarantee to provide sufficient employees to conduct all operations when required by the Company, subject to arrangements for pre-approved leave and for public holidays as set out in this Agreement.

…

16.17    Where an employee is unable to attend work for an allocated shift, they should notify the Company as soon as practical so that a replacement can be sourced if required and disruption to work is minimised.

16.18    If the Company is not notified of an employee’s inability to attend for work before the commencement of the shift, the absence will be treated as a “Fail To Report” (FTR) and will be dealt with under the Company’s absence management procedure.

24    Clause 17.2 provided that employees may be required to work a reasonable amount of overtime to meet operational requirements.

25    Clause 17.9 provided that extensions and hours worked beyond 1,560 hours (including extensions beyond 1,560) would be paid at the multiples set out therein of the secondary time Level rate (cl 15.6 rate) appropriate to the work being performed on the overtime shift.

26    Clause 17.15 provided that an employee may also be required to work up to 30 minutes preparatory and/or closing work and shall be paid for the period so worked at the secondary Level rate applicable to the work performed and at the extension multiple applicable to the shift.

27    Clause 18 dealt with leave entitlements and public holidays and provided in part:

…

18.34    Employees who work on a public holiday shall be paid at the Award public holiday rates of pay and no hours will be counted towards the annual hours total. Employees who work on a voluntary public holiday shall also be entitled to a day in lieu.

18.35    Where an employee is available to work by virtue of being on a scratch day, and is not required to work on any public holiday (voluntary holiday or otherwise), they shall be paid 8 hours at the Level 1 ordinary rate and have 8 hours counted towards their annual total.

…

28    Clause 27 provided for jury duty to be counted towards employees’ annual total hours.

29    Schedule 4 had the heading, “Phase 1 Roster”. It set out the roster referenced in cl 16.2, providing for employees to be rostered in Day, Evening and Night shifts through a cycle of eight weeks. The employees were to have every eighth week off.

30    After the roster, appeared the heading, “Roster Rules”. The Roster Rules provided in part:

Roster Rules

In addition to the provisions of Clause 16 (Allocation and Working Arrangements), the following allocation rules will apply to this roster, subject to skills:

1.    Employees shall work 1560 hours annually and are available to be allocated to shifts in accordance with the roster, subject to any agreed leave arrangements.

2.    The annual hours are based on a 30-hour week and include leave counted at 30 hours per week (annual leave) and 8 hours per day (personal leave and accrued days taken).

3.    Employees will be paid 30 hours at the Level 1 ordinary rate each week, plus any higher duties payments for any shifts worked in the week, plus any shift premiums applicable to any shifts worked in the week, plus any extensions or preparatory/closing work performed in the week, plus any leave as noted above.

4.    Once the 1560 annual hours have been worked in any year, the employee will be paid 30 hours at the Level 1 ordinary rate each week, plus the applicable overtime rate for each shift worked in the week, plus any extensions or preparatory/closing work performed during the week.

5.    Employees with the lowest pro rata target annualised hours may be allocated first on each occasion in accordance with the panel tumble and pick up. Thereafter, higher panels on the roster will be allocated before lower panels (eg., Panel 1 before Panel 5 for day work, etc).

…

18.    Annual hours shall recommence and shall be zeroed on July 1 of each year.

31    On 15 June 2020, the 2015 Agreement was varied by adding a new Schedule 10 – Covid 19 Pandemic Arrangements (Sydney). Clause 3 of Schedule 10 of the 2015 Agreement as varied amended the Roster Rules (Amended Roster Rules). In accordance with the Amended Roster Rules, the pro–rated annualised hours of work target for Port Botany Employees for the year commencing from 1 July 2020 to 1 July 2021 was 1,501 hours.

Issues for determination

32    In its Amended Statement of Claim, the Union alleges that on each occasion described in the table below, the Employers contravened ss 50 and 323 of the FW Act by making “unlawful deductions” from amounts payable to the following Port Botany Employees and Port of Brisbane Employees:

33    The Employers submit it is incorrect to describe what they did as making “deductions”, but accept that they withheld payment of amounts of wages. I accept that submission, but it has not been suggested that anything turns upon the distinction.

34    By their Amended Defences, the Employers plead that:

(1)    A Port Botany Employee and a Port of Brisbane Employee was only entitled to the payment provided for in the Roster Rules set out in Schedule 4 of the 2015 Agreement of 30 hours at the Level 1 ordinary rate each week if the Employee:

(a)    was ready willing and able to perform the work on a shift allocated to the Employee in the roster; and

(b)    performed the work on the shift allocated to the Employee in the roster.

(2)    Each of the Port Botany Employees set out at Schedules A, B and C of the Amended Statement of Claim and the Port of Brisbane Employees set out at Schedules D, E, F, G, H, I and J of the Amended Statement of Claim:

(a)    failed or refused to attend for work on the shift allocated to the Employee in the roster and that by s 470(1) of the FW Act, the First Respondent and the Second Respondent were prohibited from making the payment of the Level 1 ordinary rate pleaded as payable, whether on 17 June 2021, 1 July 2021 or at all; and further and in the alternative;

(b)    was not ready, willing and able to, and did not perform the work on the shift allocated to the Employee in the roster and that by reason of s 471(4) of the FW Act was not entitled to the payment of the Level 1 ordinary rate, pleaded as payable, whether on 17 June 2021, 1 July 2021 or at all.

35    The Union admits that the Employees failed or refused to attend for work on the relevant dates. However, they plead that neither s 470(1) nor s 471(4) of the FW Act applied to prevent or allow refusal of payment.

The statutory provisions

36    By s 50 of the FW Act, a person, “must not contravene a term of an enterprise agreement”.

37    Section 323(1) of the FW Act provides in part that an employer must pay an employee amounts payable to the employee in relation to the performance of work in full except as provided by s 324. Section 324(1)(d) provides, relevantly, that an employer may deduct an amount from an amount payable to an employee in accordance with subsection 323(1) if the deduction is authorised by or under a law of the Commonwealth.

38    Sections 50 and 323 of the FW Act are civil remedy provisions.

39    Subdivision A of Div 9 of Pt 3–3 of the FW Act deals with payments relating to periods of protected industrial action. Section 470(1) of the FW Act provides:

470    Payments not to be made relating to certain periods of industrial action

(1)    If an employee engaged, or engages, in protected industrial action against an employer on a day, the employer must not make a payment to an employee in relation to the total duration of the industrial action on that day.

40    Section 471 provides, relevantly:

Payments relating to partial work bans

…

Employer gives notice of non-payment

(4)    If:

(a)    an employee engaged, or engages, in protected industrial action against an employer on a day; and

(b)    the industrial action is a partial work ban; and

(c)    the employer gives to the employee a written notice stating that, because of the ban:

(i)    the employee will not be entitled to any payments; and

(ii)    the employer refuses to accept the performance of any work by the employee until the employee is prepared to perform all of his or her normal duties;

then the employee is not entitled to any payments in relation to the period (the industrial action period) referred to in subsection (5).

…

The industrial action period

(5)    The industrial action period is the period:

(a)    starting at the later of:

(i)    the start of the first day on which the employee implemented the partial work ban; or

(ii)    the start of the next day, after the day on which the notice was given, on which the employee performs work; and

(b)    ending at the end of the day on which the ban ceases.

…

41    Section 470(1) is a civil remedy provision.

Consideration

42    The central question to be determined is whether the Employers’ refusal to pay the Employees eight hours’ wages at the Level 1 ordinary rate for the periods when they engaged in protected industrial action was either:

(a)    required by s 470(1) of the FW Act, which prohibits an employer from making payments, “to an employee in relation to the total duration of the industrial action”; or

(b)    authorised under s 471(4), which provides that a relevant employee, “is not entitled to any payments in relation to the [industrial action] period”.

43    That question turns on whether the 2015 Agreement should be construed such that Port Botany Employees who had worked 1501 hours in a year (from 1 July to 30 June) and Port of Brisbane Employees who had worked 1560 hours before the end of the year were entitled to be paid 30 hours per week at the Level 1 ordinary rate for the remainder of the year under Roster Rule 4 irrespective of whether they performed any work or were ready and willing to do so.

44    The following matters are not in dispute:

(1)    The Employees were each rostered to work an eight-hour shift on one or more of 12, 13, 14, 15, 16, 17, 18 and 19 June 2021.

(2)    The Employees took protected industrial action by failing or refusing to perform work on their rostered shifts. It follows that they were not ready and willing to perform that work.

(3)    The Employers refused to pay the Employees for eight hours at the Level 1 ordinary rate in respect of each shift they failed or refused to work.

(4)    The Port of Brisbane Employees had already worked at least 1560 hours, and the Port Botany Employees at least 1501 hours, in the year since 1 July 2020 (for convenience, I will generally only refer to 1560 hours in the balance of these reasons).

45    In arguing that s 470(1) of the FW Act did not prohibit the Employers from paying the Employees at the Level 1 ordinary rate, the Union relies on Construction Forestry Mining and Energy Union v Mammoet Australia Pty Ltd (2013) 248 CLR 619. In that case, the High Court held that the prohibition does not apply to entitlements of an employee which are not dependent on the actual performance of services but are instead dependent on the subsistence of the contract of employment, explaining:

51    An employee who engages in industrial action does not, for the duration of the industrial action, render the services on which the entitlement to remuneration commonly depends. But to say that is distinctly not to say that entitlements of an employee which are dependent on the subsistence of the contract of employment, rather than the actual performance of services, even if sensibly described as “payments”, are “payment[s] … in relation to the total duration of the industrial action”. To speak of “a payment to an employee in relation to the total duration of the industrial action” is to speak of a period of employment in respect of which no remuneration is earned by the employee. The concern addressed by s 470(1) of the Act is that the taking of industrial action must not be the occasion of a payment by the employer. The obligation to provide accommodation was not the occasion of the industrial action taken by the relevant employees.

52    The legislative history confirms that the relationship between payment and industrial action contemplated by s 470(1) is that the non-performance of work by the employee is the occasion of the proscribed payment. These indications support the view that the purpose of the provision is to prohibit "strike pay", that is, payments by an employer to "make up", in whole or in part, wages not earned by the employee during the period of industrial action.

…

(Emphasis added.)

46    The Union submits that the same reasoning must apply to s 471(4) of the FW Act. I accept that submission.

47    The Union contends that, as a matter of construction of the Roster Rules in Schedule 4 of the 2015 Agreement:

(1)    after having worked 1560 hours since 1 July 2020, the Employees were under no obligation to perform any further work during the remainder of the year;

(2)    the Employees were entitled to payment of 30 hours per week at the Level 1 ordinary rate for the remainder of the year regardless of whether they performed any work or were ready and willing to do so;

(3)    the Employees could choose to perform work beyond 1560 hours in a year, and, if they did, they were entitled to additional payment at the applicable overtime rate for each shift worked plus any extensions or preparatory/closing work performed.

48    The Union submits that as the entitlement of employees who had worked 1560 hours to payment of 30 hours per week at the Level 1 ordinary rate for the remainder of the year was not dependent on the actual performance of services, it was not payment of the kind prohibited under s 470(1) or described in s 471(4) of the FW Act. It submits that as the Employers’ “deductions” of eight hours at the Level 1 ordinary rate for the industrial action period were not authorised under any law, the Employers contravened Schedule 4 of the 2015 Agreement and ss 50 and 323 of the FW Act.

49    In response, the Employers argue that nothing in the 2015 Agreement demonstrates an intention to abrogate the common law principle that a requirement for an employer to pay wages is conditional upon the employee’s performance of work, or, at least, readiness and willingness to perform work. They rely on Coal & Allied Mining Services Pty Limited v MacPherson (2010) 185 FCR 383 (MacPherson), where the Full Court at [18] and [81] cited with approval the following statement from the judgment of Rogers J in Csomore v Public Service Board (NSW) (1986) 10 NSWLR 587 at 595:

Unless an employer waives the usual requirement of a contract of employment that an employee perform the full range of work properly assigned to him or unless the award under which the employee works makes a contrary provision, payment of wages is conditional upon performance by the employee of the full range of work assigned or, at least, a readiness and willingness to do so.

50    In MacPherson, their Honours at [38] and [79] also cited the following passage from Miles v Wakefield Metropolitan District Council [1987] AC 539, where Lord Templeman said at 561:

It cannot be right that an employer should be compelled to pay something for nothing whether he dismisses or retains a worker. In a contract of employment wages and work go together. The employer pays for work and the worker works for his wages. If the employer declines to pay, the worker need not work. If the worker declines to work, the employer need not pay. In an action by a worker to recover his pay he must allege and be ready to prove that he worked or was willing to work.

(See also Lord Oliver of Aylmerton at 570-572.)

51    The Employers also seek to apply by analogy the reasoning expressed in the following passage from the judgment of Marshall and Cowdroy JJ in MacPherson at [32]:

…If Div 7 [of Pt 12 of the Workplace Relations Act 1996 (Cth)] had intended to remove from an employer a common law right to decline to provide work to an employee when that employee refused to perform a substantial part of his or her duties, it would have made that very clear. Parliament has not expressed such intention…

52    The Employers argue that if the parties to the 2015 Agreement had intended to abrogate the common law principle that payment of wages is conditional upon performance by the employee of the full range of work assigned, or, at least, readiness and willingness to do so, that intention would have been clearly expressed. They submit that the 2015 Agreement evinced no such intention and point to a number of clauses which they argue indicate the contrary intention.

53    As the parties’ arguments turn on the proper construction of the 2015 Agreement, the principles of construction summarised in WorkPac Pty Ltd v Skene (2018) 264 FCR 536 at [197] are relevant:

The starting point for interpretation of an enterprise agreement is the ordinary meaning of the words, read as a whole and in context. The interpretation “turns on the language of the particular agreement, understood in the light of its industrial context and purpose”. The words are not to be interpreted in a vacuum divorced from industrial realities; rather, industrial agreements are made for various industries in the light of the customs and working conditions of each, and they are frequently couched in terms intelligible to the parties but without the careful attention to form and draftsmanship that one expects to find in an Act of Parliament. To similar effect, it has been said that the framers of such documents were likely of a “practical bent of mind” and may well have been more concerned with expressing an intention in a way likely to be understood in the relevant industry rather than with legal niceties and jargon, so that a purposive approach to interpretation is appropriate and a narrow or pedantic approach is misplaced.

(Citations omitted.)

54    The 2015 Agreement did not expressly state that once an employee worked 1,560 hours, they were entitled to receive payment of 30 hours at the Level 1 ordinary rate for the remainder of the year irrespective of whether they performed any work and regardless of any willingness and readiness to perform work. However, the Union submits that such an interpretation is apparent from the language and context of the 2015 Agreement. The Union places particular emphasis on Schedule 4.

55    Schedule 4 was made applicable by cll 6, 15 and 16 of the 2015 Agreement. Under cl 6.1.1, a relevant employee covered by the Agreement was employed as a full-time employee engaged for an average of 30 hours per week, “in accordance with this Agreement in Schedule 4”. Under cl 15.1, employees were required to be paid, relevantly, at the Level 1 ordinary rate ($42.45 per hour of work), “in accordance with the rostering details set out in Schedule 4 of this Agreement”. Clause 16.1 provided the Employers would, “at all times be able to roster and allocate any employee individually in a flexible manner in accordance with the arrangements in this Agreement”. Clause 16.2 provided that, “Employees shall work in accordance with the arrangements detailed in the following sub-sections and the roster and related rules in Schedule 4…”.

56    Schedule 4 commenced by setting out the roster, which provided for allocation of employees to Day, Evening and Night Shifts in an eight-week cycle. Schedule 4 then set out a number of “Roster Rules”. Roster Rules 5 to 17 were concerned with matters including the order in which employees could be allocated work, the order in which shifts would be worked by the different panels, payment where shifts were cancelled and the number of days that could be worked consecutively. The parties’ arguments were more focussed on Roster Rules 1 to 4.

57    Roster Rule 1 provided:

Employees shall work 1560 hours annually, and are available to be allocated to shifts in accordance with the roster, subject to any agreed leave arrangements.

58    It may be noted that 1560 hours is an average of 30 hours per week over 52 weeks. That is consistent with cl 6.1.1 which referred to full-time employees being engaged for an average of 30 hours per week.

59    Roster Rule 3 provided:

Employees will be paid 30 hours at the Level 1 ordinary rate each week, plus any higher duties payments for any shifts worked in the week, plus any shift premiums applicable to any shifts worked in the week, plus any extensions or preparatory/closing work performed in the week, plus any leave as noted above.

60    The parties are in agreement that Roster Rule 3 applied in the period before an employee had worked 1560 hours in the year.

61    Roster Rule 4 then provided:

Once the 1560 annual hours have been worked in any year, the employee will be paid 30 hours at the Level 1 ordinary rate each week, plus the applicable overtime rate for each shift worked in the week, plus any extensions or preparatory/closing work performed during the week.

62    The Union submits that the phrase in Roster Rule 1, “Employees shall work 1560 hours annually”, indicated that they were not required to work any more than 1560 hours in the year and that any additional work they performed was voluntary. While that is an arguable interpretation, regard must be had to the context, including the remainder of Roster Rule 1 and the 2015 Agreement as a whole.

63    In Roster Rule 1, the phrase, “Employees shall work 1560 hours annually”, was immediately followed by the phrase, “and are available to be allocated to shifts in accordance with the roster”. The Employers submit that this was a requirement that employees be available for allocation to shifts in accordance with the roster for the whole of the year, and not merely for the period before they had worked 1560 hours. That construction is consistent with the roster itself, which operated in eight-week cycles over the whole year.

64    In addition, when regard is had to cl 16 of the 2015 Agreement, which will be considered in detail later in these reasons, that is the preferrable construction.

65    In the context of cl 16, Roster Rule 1 should be interpreted as imposing an obligation on employees to work at least 1560 hours annually in accordance with their allocated shifts, subject to agreed leave arrangements. Clause 16 and Roster Rule 1 must also be construed as imposing an obligation on the Employers to provide at least 1560 hours’ work annually. In this way, Roster Rule 1 created certainty for employees as to the availability of work and for the Employers as to the supply of labour in circumstances where the 2015 Agreement recognised that labour requirements could vary from time to time (see, for example, cll 14.1, 16.1 and 16.13).

66    The theme of certainty is also evident under Roster Rule 3, which provided that “Employees will be paid 30 hours at the Level 1 ordinary rate each week”, plus payment of any applicable shift premiums, any extensions or preparatory/closing work, and any leave. Under this rule, employees were to be paid 30 hours at the Level 1 ordinary rate each week, regardless of whether they had actually worked less or more than 30 hours. This rule provided employees with a guaranteed minimum income each week. It can readily be understood that for employees with various fixed financial commitments, such certainty would be important.

67    The Union accepts there was an obligation to perform work in order for the 30 hours at the Level 1 ordinary rate per week to be payable under Roster Rule 3. It was common ground that the 2015 Agreement envisaged that employees may well have reached 1560 hours before the end of the year, at which time Roster Rule 4 would apply.

68    Roster Rule 4 expressly made provision for two matters. First, it confirmed that once 1560 annual hours had been worked, the employee would continue to be paid for 30 hours at the Level 1 ordinary rate each week for the remainder of the year. Roster Rule 4 operated together with Roster Rule 3 to provide employees with the certainty of a guaranteed minimum income each week of the year. Second, Roster Rule 4 indicated that once the 1560 annual hours were worked in any year, the employee would be paid for further work at, “the applicable overtime rate for each shift worked in the week, plus any extensions or preparatory/closing work performed during the week”. The issue is whether Roster Rule 4 supports the proposition that after reaching 1560 hours, employees were no longer required to work or be ready and willing to work in order for the 30 hours at the Level 1 ordinary rate each week to continue to be payable.

69    The Union submits that the words of Roster Rule 4, “Once the 1560 annual hours have been worked in any year, the employee will be paid 30 hours at the Level 1 ordinary rate each week”, indicates that the Employers’ obligation to pay was unconditional. However, when that provision is construed in the context of cl 16, it does not indicate that employees were given a choice whether to work or not to work after the 1560 hours threshold had been reached. Rather, they would continue to work on allocated shifts and continue to be paid for 30 hours at the Level 1 ordinary rate each week and, in addition, paid the appropriate overtime rate for each shift plus any extensions or preparatory/closing work for each hour they worked.

70    The Union relies upon a number of other provisions of the 2015 Agreement in support of the proposition that an employee’s obligation to perform work was only an obligation to perform 1560 hours of work annually. Roster Rule 11 provided for contributions of hours towards the “annual total” in circumstances where a shift was cancelled. Roster Rule 13 provided that the eighth week is off, “unless the employee is more than 30 worked hours behind on the pro rata to annual hours”, and that employees would be advised of, “any such deficit through weekly posting of annual hours”. Roster Rule 18 provided that “annual hours” would be recommenced and zeroed on 1 July each year. Clause 15.6 provided for payment at the secondary or overtime rate for additional shifts worked after the “required annual roster hours” had been worked. Clauses 18.34 and 18.35 dealt with work on public holidays and whether such work, “will be counted towards the annual hours total”, while cl 18.35 dealt with scratch days being counted towards, “their annual total”. Clause 27.1 provided for jury duty to be counted towards the “annual total hours”. By Schedule 10, from 1 July 2020, “annual hours” could be pro-rated for the Port Botany Employees.

71    I do not consider that the references in the 2015 Agreement to the 1560 hours as “annual hours”, or the “annual total”, or the like, assists the Union’s argument. Those expressions can be understood to reflect the fact that under cl 6.1.1 the employees were employed as, “full time employees engaged as such for an average of 30 hours per week”, or 1560 hours annually. The figure of 1560 hours was important because it triggered the increased rate of pay that applied under Roster Rule 4. The clauses pointed to by the Union were concerned principally with the calculation or make-up of the 1560 hours because of the importance of that figure to the employees’ pay rates. Expressions such as “annual hours”, or “annual total”, or the like, were generally used as shorthand for an employee working 1560 hours in the context of rules about what hours would count towards achievement of that total. The use of such expressions in that context does not suggest an intention to convey that employees were only required to work 1560 hours in a year.

72    It is unclear whether the Union relies on cl 6.1.1 of the 2015 Agreement. In any event, the clause was ambiguous. It could mean that employees were engaged for a total of 1560 hours per annum at an average of 30 hours per week. Or it could mean that employees were engaged for more than 1560 hours per annum, given that they could work more than 30 hours per week since that figure is an average, not a maximum. Given that ambiguity, I do not consider that cl 6.1.1 assists the Union’s argument.

73    The Union submits that under the 2015 Agreement, an employee who had worked 1560 hours before the end of the year had necessarily worked more than an average of 30 hours per week. Under Roster Rule 3, such an employee was only entitled to be paid a weekly amount of 30 hours at the Level 1 ordinary rate even if they had worked more than 30 hours per week on average. The Union submits that ongoing payment of the weekly salary of 30 hours at the Level 1 ordinary rate after 1560 hours was reached was thereby in relation to work already performed. The Union contends that the bargain struck was 1560 hours of work in return for a salary of 30 hours at the Level 1 ordinary rate per week for 52 weeks per year.

74    The Union’s characterisation of the basis of payment of the 30 hours at the Level 1 ordinary rate after 1560 hours had been reached is partly, but not entirely, accurate. Roster Rules 1, 3 and 4 were part of an overall scheme that provided employees with certainty as to their minimum weekly income for the whole of the year and employers with certainty as to the supply of labour. Accordingly, while payment of 30 hours at the Level 1 ordinary rate after 1560 hours is, in a sense, capable of attribution to work already performed, that does not reflect the whole of the bargain struck. The bargain consists of the overall scheme that was agreed, including the spreading apart of the employees’ wages over the whole year and employees making themselves available to work for the whole of the year.

75    The Union criticises the Employers’ construction by reference to a hypothetical example of an employee who had worked the 1560 hours within the first 46 weeks of the year and then refused to perform any more work for the remainder of the year. The employee would be in “credit”, having only been paid for 30 hours per week for 46 weeks despite having worked more than 30 hours per week. If the Employer were entitled to refuse to pay the 30 hours at the Level 1 ordinary rate, the employee would have performed work for which they would not be paid. The Union argued that such an unfair outcome could not have been intended.

76    Although the hypothetical example was raised, the parties did not really engage with how the 2015 Agreement might or might not have accommodated the problem. One possibility is that this was such an unlikely situation that it was simply not contemplated or catered for. Another possibility is that if the hypothetical employee refused to perform any more work, their employment would likely have been terminated, at which point cl 15.1 of the 2015 Agreement might have been interpreted such that the employee would have been entitled to payment equivalent to the hours already worked (as might also be the case where an employee resigns part of the way through the year). Neither possibility is consistent with any intention that an employee receive payment for 30 hours per week at the Level 1 ordinary rate irrespective of whether the employee worked, or was ready and willing to work, for the remainder of the year.

77    In any event, I am satisfied that when the 2015 Agreement is examined as a whole, it is consistent with employees having an obligation to work their allocated shifts both before and after they reached 1560 hours in a year. The 2015 Agreement does not indicate any intention to abrogate the common law principle under which payment of wages is conditional upon performance of work assigned or, at least, a readiness and willingness to do so. Clause 16 is of particular importance in arriving at this conclusion.

78    Clause 16.1 provided that the Employers would, “at all times be able to roster and allocate any employee individually in a flexible manner in accordance with the arrangements in this Agreement”. Clause 16.2 then provided that, “Employees shall work in accordance with the arrangements detailed in the following sub-sections and the roster and related rules in Schedule 4…”. It may be seen that cl 16.1 allowed the Employers to roster and allocate employees in accordance with the arrangements in the 2015 Agreement, while cl 16.2 created a corresponding obligation on employees to work in accordance with those arrangements. The arrangements included, under Roster Rule 1, that employees be available to be allocated to shifts in accordance with the roster.

79    The words “at all times” in cl 16.1 were consistent with the employees’ obligation under cl 16.2 applying throughout the whole year. Those words were entirely inconsistent with employees only being obliged to work for the part of the year before they reached 1560 hours.

80    The need for the Employers to have flexibility in rostering and allocation of work that was recognised in cl 16.1 is inconsistent with employees having a discretion to effectively choose their own shifts after working 1560 hours.

81    Further, under cl 16.13, the Union and employees gave a guarantee to provide sufficient employees to conduct all operations when required by the Employers, subject only to pre-approved leave and public holidays. The Union could not have provided that guarantee if it were intended that employees who had worked 1560 hours were then entitled to refuse some or all work for the remainder of the year. Further, that each employee guaranteed their availability to conduct all operations when required by the Employers is inconsistent with the notion that all who reached 1560 hours were then free to simply refuse to work.

82    The Union’s argument goes further. It may be noted that each of the Employees from whom the Employers withheld payment had failed or refused to work their allocated shifts. The Union’s argument must be not merely that employees who had reached 1560 hours were free to refuse allocation to shifts, but that they were free to refuse to work even after they had been allocated shifts. However, cl 16.2 required employees to, “work in accordance with the arrangements detailed in the following sub-sections and the roster and related rules in Schedule 4”. Roster Rule 1 required that the Employees “be available to be allocated to shifts in accordance with the roster”. Accordingly, they were required to work in accordance with the rosters and the allocations determined by the Employers under cl 16.1.

83    There are other parts of cl 16 that are consistent with a requirement for employees to work the shifts to which they had been rostered both before and after they had worked 1560 hours in the year. These include cll 16.4 and 16.5, the latter of which referred to “work requirements”, without making any distinction between employees who had or had not worked 1560 hours. Clause 16.9 provided for work “on a voluntary basis” in certain circumstances, but there was no similar reference for employees who had worked more than 1560 hours as might have been expected if their work was to be voluntary. Clause 16.17 provided that where an employee was, “unable to attend work for an allocated shift”, they should notify the Employers as soon as practicable, whereas there was no corresponding provision requiring notification by any employee who had reached 1560 hours deciding they no longer wished to work after they had been allocated to a shift. Clause 16.18 provided for consequences for an employee who failed to notify their inability to attend for work before the commencement of the allocated shift and did not distinguish between employees who had not worked more than 1560 hours and those who had.

84    Clause 17.2 provided that, “Employees may be required to work a reasonable amount of overtime to meet occupational requirements”. This clause was consistent with cl 16.13 and did not exempt employees who had worked more than 1560 hours.

85    It is quite improbable that the parties intended that an employee could simply choose whether or not to work on any allocated shift for the rest of the year after working 1560 hours. That would not have made industrial sense because the Employers would have been left without assurance of having an adequate number of employees for any shift towards the end of the year. It would be inconsistent with cl 5.1 of the 2015 Agreement, which stated that, “the Parties’ intent [is] to establish employment arrangements that enable the Company to successfully establish grow and maintain world-class terminal operations”. It would be inconsistent with cl 16.13 because the Union could not, “guarantee to provide sufficient employees to conduct all operations when required by the Company”.

86    It was possible that an employee would not be allocated any shift in a particular week (apart from taking leave or the eighth week off), whether before or after they had worked 1560 hours. This was recognised by Roster Rule 5, which provided that, “Employees with the lowest pro rata target annualised hours may be allocated first”. It must be accepted that employees would be entitled to payment of 30 hours at the Level 1 ordinary rate in a week under Roster Rule 3 or 4 where they were not allocated any shift and, accordingly, did not perform any work.

87    It can also be accepted that there might be occasions when employees were rostered on and ready and willing to work, but did not in fact perform any work (such as where the Employers cancelled a shift under Roster Rule 11), but were nevertheless entitled to the full Level 1 ordinary rate payment for the week.

88    However, the common law principle that payment of wages is conditional upon at least readiness and willingness to perform work is unlikely to have been abrogated without clear expression of that intention. The 2015 Agreement does not express any such intention, and, in fact, there are substantial indications to the contrary. Accordingly, the 2015 Agreement must be construed such that where a shift was allocated to the employee who had already worked 1560 hours, they were only entitled to the payment of the full 30 hours at the Level 1 ordinary rate each week if they performed their allocated work, or were at least ready and willing to perform that work.

89    The same applies to the Port Botany Employees for whom the 1560 hours under Schedule 4 of the 2015 Agreement was varied to 1501 hours.

90    The consequence is that s 470(1) of the FW Act prohibited the Employers from paying the Employees at the Level 1 ordinary rate under Roster Rule 4 of the 2015 Agreement, and s 471(4) authorised the Employers to withhold such payments, for each shift when the Employees took protected industrial action.

Conclusion

91    The Employees did not work, and were not ready or willing to work, on the shifts to which they had been allocated when they took protected industrial action. The Employers were required by s 470, and authorised by s 471(4), to refuse to pay the Employees in relation to the periods of the protected industrial action. Accordingly, the Employers did not contravene s 50 or s 323 of the FW Act.

92    The Union’s proceeding must be dismissed.

93    No party made any submission about costs, and there will be no order as to costs.

Associate:    

Dated:    15 May 2024