Federal Court of Australia

Jats Joint Pty Ltd v Fair Work Ombudsman [2025] FCA 743

ORDERS

THE COURT ORDERS THAT:

1.    The applicant succeeds on Ground 2.

2.    By 4.00pm on the seventh day following the date of judgment, the parties are to provide submissions, not exceeding three pages, on the appropriate order under s 717(3) of the Fair Work Act 2009 (Cth) to give effect to these reasons.

3.    There be no orders as to costs.

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

REASONS FOR JUDGMENT

STELLIOS J:

1    This proceeding concerns an application for review under s 717(1) of the Fair Work Act 2009 (Cth) of a notice given to the applicant (Jats Joint) under s 716 of that Act (Compliance Notice). The application for review is made on two grounds:

(1)    That the Compliance Notice does not comply with s 716(3)(c) of the Fair Work Act in that it does not set out the brief details of the alleged contraventions (Ground 1).

(2)    In the alternative, that Jats Joint has not committed a contravention of the kind set out in the Compliance Notice (Ground 2).

2    Jats Joint seeks declarations that:

(1)    a “sleepover” can count as a break between rostered shifts pursuant to cl 25.4 of the Social, Community, Home Care and Disability Services Award 2010 (SCHADS Award); and

(2)    the SCHADS Award does not require a “sleepover”, and the hours worked before and/or after the “sleepover”, to be counted as one continuous “shift”; and

(3)    the SCHADS Award does not require an employer to pay a night shift penalty for a shift worked on a Monday morning after a Sunday sleepover.

3    Jats Joint also seeks the following final orders:

(1)    The Compliance Notice be cancelled pursuant to s 717 of the Fair Work Act; or

(2)    The Compliance Notice be varied in such manner as the Court sees fit, pursuant to s 717 of the Fair Work Act.

4    This Court is conferred with jurisdiction in relation to any matter (whether civil or criminal) arising under the Fair Work Act: s 562. That jurisdiction is to be exercised in the Fair Work Division of this Court, as is the case in the present proceeding, where an application is made to the Court under the Fair Work Act (s 563(a)) and where a declaration is sought under s 21 of the Federal Court of Australia Act 1976 (Cth) in relation to a matter arising under the Fair Work Act (s 563(c)). The Federal Court’s powers under ss 21, 22 and 23 of the Federal Court of Australia Act are not limited by the Fair Work Act: s 564.

5    As will be explained further in these reasons, it will not be necessary to consider Ground 1. In relation to Ground 2, the only issue that arises for determination in this proceeding is whether Jats Joint has contravened cl 29(3)(b) of the SCHADS Award by failing to pay an employee, Ms Kim Richards, a loading of 15% of her ordinary rate of pay for the whole of each night shift worked during the period identified in the Compliance Notice. No other contravention of the SCHADS Award is alleged.

6    For the reasons that follow, Jats Joint is successful on Ground 2. However, the declarations sought by Jats Joint will not be made. The parties will have seven days from the date of judgment to provide written submissions on the appropriate order to be made under s 717(3) of the Fair Work Act to give effect to these reasons.

Overview of the Fair Work Act and related instruments

7    The object of the Fair Work Act “is to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians”, including by “ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through” minimum statutory standards, modern awards and national minimum wage orders: s 3(b). Compliance with the requirements of the Act is monitored by the Fair Work Ombudsman (FWO) — who is the respondent in these proceedings — and other Fair Work Inspectors appointed by the FWO: ss 700‍–‍701.

Compliance notices under s 716

8    Section 716 applies if an inspector reasonably believes that a person has contravened, relevantly, “a term of a modern award”: s 716(1)(b). Subsection 716(2) empowers the inspector to give the person a notice requiring them to do either or both of the following:

(1)    “take specified action to remedy the direct effects of the contravention” (s 716(2)(a));

(2)    “produce reasonable evidence of the person’s compliance with the notice” (s 716(2)(b)).

9    Under s 716(3):

The notice must also:

(a)    set out the name of the person to whom the notice is given; and

(b)    set out the name of the inspector who gave the notice; and

(c)    set out brief details of the contravention; and

(d)    explain that a failure to comply with the notice may contravene a civil remedy provision; and

(e)    explain that the person may apply to the Federal Court, the Federal Circuit and Family Court of Australia (Division 2) or an eligible State or Territory Court for a review of the notice on either or both of the following grounds:

(i)    the person has not committed a contravention set out in the notice;

(ii)    the notice does not comply with subsection (2) or this subsection; and

(f)    set out any other matters prescribed by the regulations.

10    Failure to comply with a notice issued under s 716(2) of the Fair Work Act without a reasonable excuse can give rise to a civil penalty of up to 60 penalty units for individuals ($18,700.00 at the time the Compliance Notice was issued) and 300 penalty units for bodies corporate ($93,900.00 at the time the Compliance Notice was issued): ss 539, 546(2), 716(5) and 716(6).

Review of compliance notices

11    Under s 717(1) of the Fair Work Act, a person who has received a notice under s 716 may apply to the Court for a review of the notice on either or both of the following grounds:

(a)    the person has not committed a contravention set out in the notice;

(b)    the notice does not comply with subsection 716(2) or (3).

12    After reviewing a notice, the Court may confirm, cancel, or vary it: s 717(3).

Modern awards and the Fair Work Act

13    The Fair Work Commission may make a modern award, or make a determination varying or revoking a modern award: Fair Work Act Div 5 Pt 2‍–‍3. By way of summary, those awards set out the minimum terms and conditions for employees in particular industries or occupations, and can include arrangements such as overtime and penalty rates.

The SCHADS Award

14    Relevantly to the present proceeding, the SCHADS Award is a modern award that has been in force (in various forms) since 1 January 2010. The SCHADS Award, as its name suggests, applies to employers and employees in the crisis assistance and supported housing, social and community services, home care, and family day care scheme sectors: see cl 4. There was no dispute between the parties that the SCHADS Award covered the employment relationship giving rise to this proceeding.

15    Part 3 is headed “Types of Employment and Termination of Employment”. Employees under the SCHADS Award are employed in one of three categories: (i) full-time employment; (ii) part-time employment; or (iii) casual employment: cl 10.1(a). Paragraph 10.3(a) provides that a “part-time employee is one who is engaged to work less than 38 hours per week or an average of less than 38 hours per week and who has reasonably predictable hours of work”.

16    Part 5 of the SCHADS Award deals with “Hours of Work and Related Matters”. Clause 25 is headed “Ordinary hours of work and rostering”. Subclauses 25.1 and 25.2 provide:

25.1    Ordinary hours of work

(a)    The ordinary hours of work will be 38 hours per week or an average of 38 hours per week and will be worked either:

(i)    in a week of five days in shifts not exceeding eight hours each;

(ii)    in a fortnight of 76 hours in 10 shifts not exceeding eight hours each; or

(iii)    in a four week period of 152 hours to be worked as 19 shifts of eight hours each, subject to practicality.

(b)    By agreement, the ordinary hours in clause 25.1(a) may be worked up to 10 hours per shift.

25.2    Span of hours

(a)    Day worker

The ordinary hours of work for a day worker will be worked between 6.00am and 8.00 pm Monday to Sunday.

(b)    Shiftworker

    A shiftworker is an employee who works shifts in accordance with clause 29—Shiftwork.

17    Under clause 25.4 (“Rest breaks between rostered work”), employees are entitled to “a break of not less than 10 hours between the end of one shift or period of work and the start of another”: cl 25.4(a). By agreement between the employee and the employer, the break between (cl 25.4(b)):

(i)    the end of a shift and the commencement of a shift contiguous with the start of a sleepover; or

(ii)    a shift commencing after the end of a shift contiguous with a sleepover

may not be less than eight hours.

18    The balance of cl 25 deals with “Rostered days off” (cl 25.3), “Rosters” (cl 25.5), “Broken shifts” (cl 25.6), “Sleepovers” (cl 25.7), “24 hour care” (cl 25.8), and “Excursions” (cl 25.9).

19    The central question of interpretation that arises in this proceeding turns on the relation between the “Sleepovers” provision in cl 25.7 and the “Shiftwork” provision in cl 29. Subclause 25.7 relevantly provides:

25.7    Sleepovers

(a)    A sleepover means when an employer requires an employee to sleep overnight at premises where the client for whom the employee is responsible is located (including respite care) and is not a 24 hour care shift pursuant to clause 25.8 or an excursion pursuant to clause 25.9.

(b)    The provisions of 25.5 apply for a sleepover. An employee may refuse a sleepover in the circumstances contemplated in 25.5(d)(i) but only with reasonable cause.

(c)    The span for a sleepover will be a continuous period of eight hours. …

(d)    The employee will be entitled to a sleepover allowance of 4.9% of the standard rate for each night on which they sleep over.

(e)    In the event of the employee on sleepover being required to perform work during the sleepover period, the employee will be paid for the time worked at the prescribed overtime rate with a minimum payment as for one hour worked. Where such work exceeds one hour, payment will be made at the prescribed overtime rate for the duration of the work.

(f)    An employer may roster an employee to perform work immediately before and/or immediately after the sleepover period, but must roster the employee or pay the employee for at least four hours’ work for at least one of these periods of work. The payment prescribed by 25.7(d) will be in addition to the minimum payment prescribed by this subclause.

20    Clause 29 of the SCHADS Award prescribes terms and conditions that are specific to shiftwork, including allowances and penalty rates that may apply depending on the type of shift worked. Subclause 29.1 provides that “[w]here an employer wishes to engage an employee in shiftwork, the employer will advise in writing, specifying the period over which the shift is ordinarily worked”. Clause 29.2 sets out the following definitions:

(a)    Afternoon shift means any shift which finishes after 8.00 pm and at or before 12 midnight Monday to Friday.

(b)     Night shift means any shift which finishes after 12 midnight or commences before 6.00 am Monday to Friday.

(c)    A public holiday shift means any time worked between midnight on the night prior to the public holiday and midnight of the public holiday.

21    Subclauses 29.3 and 29.4 provide:

29.3    Shift allowances and penalty rates

(a)    An employee who works an afternoon shift will be paid a loading of 12.5% of their ordinary rate of pay for the whole of such shift.

(b)    An employee who works a night shift will be paid a loading of 15% of their ordinary rate of pay for the whole of such shift.

(c)    An employee who works a public holiday shift will be paid a loading of 150% of their ordinary rate of pay for that part of such shift which is on the public holiday.

29.4    Shifts are to be worked in one continuous block of hours that may include meal breaks and sleepover.

22    Clause 26 deals with Saturday and Sunday work. It provides:

26.1     Employees whose ordinary working hours include work on a Saturday and/or Sunday will be paid for ordinary hours worked between midnight on Friday and midnight on Saturday at 150% of the ordinary rate of pay, and for ordinary hours worked between midnight on Saturday and midnight on Sunday at 200% of the ordinary rate of pay.

26.2     The rates in clause 26.1 are in substitution for and not cumulative upon the shift premiums prescribed in clause 29—Shiftwork and are not applicable to overtime worked on a Saturday and Sunday.

26.3     Casual employees will be paid the casual loading in clause 10.4(b) in addition to the Saturday and Sunday rates at clause 26.1.

26.4     A casual employee who works on a weekend will be paid at the following rates:

(a)    between midnight Friday and midnight Saturday – 175% of the ordinary rate of pay (inclusive of the casual loading); and

(b)    between midnight Saturday and midnight Sunday – 225% of the ordinary rate of pay (inclusive of the casual loading).

evidence

23    Jats Joint read the affidavit of Karen Southgate, a Director of the applicant, affirmed on 1 August 2024. The FWO read the affidavits of Ms Kim Richards affirmed on 29 August 2024 and Mr Nikolas Garth, the Investigator who issued the Compliance Notice, affirmed on 30 August 2024.

24    During the hearing, Jats Joint sought to cross-examine Mr Garth on his affidavit. I will deal with that matter later in these reasons.

Factual background

25    Jats Joint is a national system employer under s 14 of the Fair Work Act and an employer to which the SCHADS Award applies. It provides support to clients who have disabilities to help them live independently in their home.

The employment of Ms Richards

26    Jats Joint employed Ms Kim Richards from early January 2020 to 20 October 2023. During the relevant period (27 January 2020 to 12 December 2021) covered by the Compliance Notice, Ms Richards was:

    employed on a part-time basis as a Social and Community Services Employee Level 2;

    paid at the Award rate for a Social and Community Services Employee Level 2 Pay Point 4;

    a shift worker who was covered by cl 29.1 of the SCHADS Award;

    rostered to sleep overnight on 123 occasions; and

    not rostered to work and did not work ordinary hours between 12.00 midnight and 6.00am Monday to Friday.

27    Ms Richards’ sleepovers were rostered in one of three ways:

    first, immediately following a period of ordinary hours of work;

    secondly, immediately preceding a period of ordinary hours of work; and

    thirdly, both immediately following and immediately preceding two separate periods of ordinary hours of work (ie, in between two periods of ordinary hours of work).

28    At no time during the relevant period was Ms Richards paid the additional 15% penalty rate that applies to a night shift in relation to any of the time she worked immediately before and/or immediately after a sleepover.

29    In order to identify the controversy to be quelled in this proceeding, it is necessary to explain these three categories in further detail. The evidence of the rostered periods is taken from the affidavit of Ms Southgate, which annexed Ms Richards’ timesheets and payslips and schedules of hours worked and rostered (including annexure KS-3 that re-sorts in chronological order the summary of timesheets set out in Schedule A to the Statements of Claim). Ms Southgate was not called for cross-examination, and her evidence was read without objection. It will be seen that, on the facts, only the first and third categories identified at [27] raise the issue to be determined in this proceeding. I note that there were a few minor discrepancies between the timesheets and the summary schedule set out in annexure KS-3. In those instances, I have relied upon the information in the timesheets. However, even if I had relied exclusively on the information in the summary schedule in annexure KS-3, the conclusion would remain that category two in [27] does not raise the issue to be determined in this proceeding.

Category 1: Sleepover immediately following a period of ordinary hours of work

30    On many occasions during the relevant period, Ms Richards was rostered to commence and complete ordinary hours of work on a particular day and then immediately commence and complete a sleepover. For example, on Wednesday, 29 January 2020, Ms Richards commenced ordinary hours of work at 2.00pm and completed that period of work at 10.00pm. From 10.00pm until 6.00pm on Thursday, 30 January 2020, Ms Richards was rostered for a sleepover.

31    The same pattern occurred on 29‍–‍30 January 2020, 5‍–‍6 February 2020, 15‍–‍16 February 2020, 28‍–‍29 June 2020, 16‍–‍17 August 2020, 27‍–‍28 December 2020, 24‍–‍25 January 2021, 7‍–‍8 February 2021, 7‍–‍8 March 2021, 4‍–‍5 April 2021, 18‍–‍19 April 2021, 2‍–‍3 May 2021, 30‍–‍31 May 2021, 13‍–‍14 June 2021, 25‍–‍26 July 2021, 8‍–‍9 August 2021, 22‍–‍23 August 2021, 27‍–‍28 August 2021, and 13‍–‍14 October 2021.

32    In relation to five of these periods (including the period referred to in [30]), the adjacent periods of ordinary hours before the sleepover were completed on a Monday to Friday before midnight on those days and were paid at the ordinary rate with an afternoon loading. Only those periods raise the issue to be determined in this proceeding. In relation to the remaining periods, the adjacent periods of ordinary hours commenced after midnight on a Friday and were completed before midnight on a Sunday and were, or should have been, paid at the applicable weekend rate. Those periods do not raise the issue to be determined in this proceeding.

Category 2: Sleepover immediately preceding a period of ordinary hours of work

33    On many occasions during the relevant period, Ms Richards was rostered to commence and complete a sleepover and then immediately commence and complete an adjacent period of ordinary hours. For example, Ms Richards commenced a sleepover on Friday, 31 January 2020 at 10.00pm and then completed the sleepover on Saturday, 1 February 2020 at 6.00am. She then immediately commenced a period of ordinary hours at 6.00am and finished at 3.00pm on the same day. The same pattern occurred on 3‍–‍4 April 2020, 17‍–‍18 April 2020, 1‍–‍2 May 2020, 15‍–‍16 May 2020, 29‍–‍30 May 2020, 12‍–‍13 June 2020, 26‍–‍27 June 2020, 10‍–‍11 July 2020, 7‍–‍8 August 2020, 21‍–‍22 August 2020, 4‍–‍5 September 2020, 2‍–‍3 October 2020, 30‍–‍31 October 2020, 13‍–‍14 November 2020, 11‍–‍12 December 2020, 8‍–‍9 January 2021, 22‍–‍23 January 2021, 5–6 February 2021, 19‍–‍20 February 2021, 5‍–‍6 March 2021, 2‍–‍3 April 2021, 16‍–‍17 April 2021, 30 April to 1 May 2021, 28‍–‍29 May 2021, 11‍–‍12 June 2021, 23‍–‍24 July 2021, 6‍–‍7 August 2021, 20‍–‍21 August 2021, 3‍–‍4 September 2021, 15‍–‍16 October 2021, 29‍–‍30 October 2021, 12‍–‍13 November 2021 , and 26‍–‍27 November 2021.

34    On each of these occasions, the adjacent period of ordinary hours of work commenced after midnight on a Friday and was completed before midnight on a Sunday and was, or should have been, paid at the applicable weekend rate. Accordingly, none of these periods raise the issue to be determined in this proceeding.

Category 3: Sleepover between two periods of ordinary hours of work

35    During the relevant period, Ms Richards was also rostered to commence and complete a sleepover in between two adjacent periods of ordinary hours. For example, on Wednesday, 19 February 2020, Ms Richards commenced an adjacent period of ordinary hours at 2.00pm and completed that period of work at 10.00pm. She immediately commenced a sleepover at 10.00pm until 6.00am on Thursday, 20 February. Ms Richards then immediately commenced an adjacent period of ordinary hours at 6.00am and completed that period of work at 11.00am on the morning of 20 February 2020.

36    That pattern was repeated on 19‍–‍20 February 2020, 11‍–‍12 March 2020, 18‍–‍19 March 2020, 25‍–‍26 March 2020, 1‍–‍2 April 2020, 8‍–‍9 April 2020, 15‍–‍16 April 2020, 22‍–‍23 April 2020, 29‍–‍30 April 2020, 6‍–‍7 May 2020, 13‍–‍14 May 2020, 20‍–‍21 May 2020, 27‍–‍28 May 2020, 3‍–‍4 June 2020, 10‍–‍11 June 2020, 24‍–‍25 June 2020, 1‍–‍2 July 2020, 8‍–‍9 July 2020, 5‍–‍6 August 2020, 12‍–‍13 August 2020, 19‍–‍20 August 2020, 26‍–‍27 August 2020, 2‍–‍3 September 2020, 23‍–‍24 September 2020, 30 September to 1 October 2020, 21‍–‍22 October 2020, 28‍–‍29 October 2020, 2‍–‍3 December 2020, 9‍–‍10 December 2020, 16‍–‍17 December 2020, 23‍–‍24 December 2020, 30‍–‍31 December 2020, 6‍–‍7 January 2021, 27‍–‍28 January 2021, 3‍–‍4 February 2021, 10‍–‍11 February 2021, 17‍–‍18 February 2021, 22‍–‍23 March 2021, 24‍–‍25 March 2021, 31 March to 1 April 2021, 7‍–‍8 April 2021, 14‍–‍15 April 2021, 21‍–‍22 April 2021, 28‍–‍29 April 2021, 5‍–‍6 May 2021, 19‍–‍20 May 2021, 26‍–‍27 May 2021, 2‍–‍3 June 2021, 9‍–‍10 June 2021, 16‍–‍17 June 2021, 23‍–‍24 June 2021, 13‍–‍14 July 2021, 21‍–‍22 July 2021, 28‍–‍29 July 2021, 4‍–‍5 August 2021, 11‍–‍12 August 2021, 18‍–‍19 August 2021, 25‍–‍26 August 2021, 1‍–‍2 September 2021, 5‍–‍6 September 2021, 8‍–‍9 September 2021, 15‍–‍16 September 2021, 17‍–‍18 September 2021, 19‍–‍20 September 2021, 22‍–‍23 September 2021, 6‍–‍7 October 2021, 11‍–‍12 October 2021, 20‍–‍21 October 2021, 27‍–‍28 October 2021, 3‍–‍4 November 2021, 7‍–‍8 November 2021, 10‍–‍11 November 2021, 17‍–‍18 November 2021, 24‍–‍25 November 2021, 1‍–‍2 December 2021, 5‍–‍6 December 2021, 8‍–‍9 December 2021.

37    Other than on five occasions, these combined periods commenced and concluded on a Monday to Friday. On each of the Monday to Friday combined periods, the adjacent period of ordinary hours of work preceding the sleepover was paid at the ordinary rate with an afternoon loading, and the adjacent period of work following the sleepover was paid at the ordinary rate. On four of the other mentioned five occasions, the combined period commenced on a Sunday and concluded on a Monday. On those occasions, the Sunday period of ordinary hours of work preceding the sleepover was paid at the Sunday rate, and the Monday morning period of ordinary hours following the sleepover was paid at the ordinary rate. On the final occasion (17‍–‍18 September 2021), the combined period commenced on a Friday and concluded on a Saturday. On that occasion, the adjacent period of ordinary hours of work preceding the sleepover was paid at the ordinary rate with an afternoon loading, and the adjacent period of work following the sleepover was, or should have been, paid at the Saturday rate. In relation to the Monday to Friday combined periods, the issue to be determined in this proceeding arose in relation to both periods of ordinary hours of work preceding and following the sleepover period. In relation to the Sunday to Monday combined periods and the singular Friday to Saturday combined period, the issue to be determined in this proceeding arises only for the periods of ordinary work falling on the corresponding weekday.

Summary: the issue to be determined arises only in Categories 1 and 3

38    It can be seen that the issue to be determined in this proceeding arises only in relation to Categories 1 and 3. It does not arise and, therefore cannot be answered, in relation to shifts worked in Category 2. To determine the issue in relation to those hypothetical scenarios would impermissibly go beyond the jurisdiction and power of the Court: see Bass v Permanent Trustees Co Ltd (1999) 198 CLR 334; [1999] HCA 9 at [49] (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ); CGU Insurance Limited v Blakeley (2016) 259 CLR 339; [2016] HCA 2 at [26] (French CJ, Kiefel, Bell and Keane JJ). Accordingly, I will limit the determination of the issue to the relevant periods in Categories 1 and 3.

Ms Richards’ complaint to the FWO and the FWO’s investigation

39    On 6 November 2023, Ms Richards made a request for assistance by phone to the FWO enquiring about the payment of penalty rates for night shifts. Ms Richards then provided a written statement to the FWO on 9 November 2023.

40    On 17 November 2023, following receipt and processing of Ms Richards’ complaint, the FWO commenced an investigation into the employment of Ms Richards at Jats Joint. In the course of the investigation, Mr Garth:

(1)    Consulted the FWO Library Article number K600726, which is a publicly available guidance document published by the FWO entitled “Pay for sleepovers in the Social, Community, Home Care and Disability Services Award”.

(2)    Spoke to Ms Richards regarding her complaint and obtained documents consisting of timesheets, payslips, and her letter of offer.

(3)    Spoke to Mr Sneyd, the employee relations representative for Jats Joint, where he foreshadowed that a Compliance Notice would be issued on the basis of the FWO’s interpretation of the SCHADS Award.

The Compliance Notice

41    In his affidavit, Mr Garth deposed that, having examined all the evidence, he formed a belief that Jats Joint had contravened cl 29.3(b) of the SCHADS Award in respect of its employment of Ms Richards by failing to pay her a loading of 15% of her ordinary rate of pay for the whole of each night shift worked.

42    The Compliance Notice was issued to Jats Joint on 19 January 2024. It set out the following details of the contravention:

Details of the contravention(s)

6.    The Employer employed Kim Richards (Employee) on a part time basis as a Social and Community Services Employee Level 2 Pay Point 4.

7.    The Employer, between 27 January 2020 and 12 December 2021 (Period), contravened clauses of the Award as in force at the time of the contraventions set out in the table below.

Table

Required action under this Compliance Notice

8.    In accordance with section 716(2) of the FW Act, I require you by 18 March 2024 to:

Step 1 – calculate and rectify underpayments

(a)    in respect of the contravention referred to in row (a) of the table above and in relation to the Employee Kim Richards:

(i)    identify the number of hours the Employee worked during the Period in respect of which the Entitlement was required to be paid by the Award (Hours) ignore this step if the Entitlement is not paid on an hourly basis;

(ii)    identify the amount the Employer paid to the Employee during the Period in respect of the Entitlement (having regard to the Hours, where applicable);

(iii)    calculate the amount the Employer should have paid to the Employee during the Period in respect of the Entitlement (having regard to the Hours, where applicable) and identify the applicable rates of pay within the Period and the period during which each rate applied;

(iv)    make a payment to the Employee of the difference between the amount referred to in (ii) and the amount referred to in (iii) immediately above; and

(v)    make a record of the information and amounts referred to in (i) to (iii) and the amount of the payment referred to in (iv) immediately above (Underpayment Rectification)

Step 2 Superannuation

(a)    calculate any additional superannuation contributions required by clause 23.2 of the Award in respect of the amounts required to be paid to the Employee as a result of Step 1; and

(b)    pay such additional superannuation contributions to the chosen Superannuation Fund of the Employee.

43    The Compliance Notice also required Jats Joint to provide evidence to the FWO of compliance with the required actions, namely: (a) a schedule setting out the Underpayment Rectification Information and additional superannuation contributions; and (b) proof that full payment had been made to the employee required to be made by Step 1 and Step 2.

44    While the precise basis for the alleged contravention is not apparent on the face of the Compliance Notice, it was pleaded in the Amended Defence that, during the relevant period, “Ms Richards was rostered to work and worked ordinary hours on Monday to Friday in shifts (including a sleepover period) that (i) finished after midnight; and (ii) commenced before 6.00am” (emphasis added). Accordingly, the alleged contravention of cl 29.3(b) was that Ms Richards was not paid the additional 15% penalty rate that applies to a night shift in relation to the time she worked immediately before and/or immediately after a sleepover.

45    The FWO’s approach to cl 29.3(b) was in accordance with a Library Article published by the FWO on 3 November 2016, entitled “Sleepovers in the Social, Community, Home Care and Disability Services Award” (Library Article K600551). It appeared to be accepted by the FWO in its Amended Defence that, during the relevant period, the article stated that “[t]he sleepover and the hours worked before and/or after the sleepover are counted as one continuous shift”, and that “[w]here work is performed on a Monday after the Sunday sleepover, the employee is paid the 15% night shift penalty rate for the morning shift”.

46    The basis of the FWO’s interpretation of the SCHADS Award had been explained in a letter sent to Jats Joint on 6 March 2024. That letter, which was included in a tender bundle, stated that the night shift rate was payable for shifts where:

•    work was performed on Monday to Friday immediately prior to a sleepover, where the shift ended (at the end of the sleepover) after midnight; or

•    work was performed on Monday to Friday immediately after a sleepover, where the shift started (at the beginning of the sleepover) before 6am.

47    The application for review before this Court proceeded on the basis that this was the alleged contravention.

ground 2: CONTRAVENTION OF SCHADS AWARD

48    In its Amended Statement of Claim, Jats Joint pleaded, as its alternative ground, that it had not committed a contravention of the kind set out in the Compliance Notice. By the time of the written submissions, Jats Joint had identified the proper interpretation of the SCHADS Award in relation to sleepovers as the primary concern of the case. Jats Joint further pleaded that the dispute between the parties involves four questions:

(1)    Is the night shift rate payable where a shift is immediately before a sleepover?

(2)    Is the night shift rate payable where a shift is immediately after a sleepover?

(3)    Is the night shift rate payable where a shift is immediately before a sleepover and a shift is immediately after a sleepover?

(4)    Can a sleepover be considered as a break between shifts?

49    As explained earlier in these reasons, the question of the applicable shift rate payable where a period of ordinary hours is worked immediately after a sleepover (without also a corresponding period of ordinary hours of work before the sleepover) does not arise in this proceeding. That pattern of work was not identified as one arising in the relevant period and was not the subject of the Compliance Notice. Furthermore, the question of whether a sleepover can be considered a break does not arise directly from the alleged contravention. Therefore, Questions (2) and (4) cannot be directly answered in this proceeding. On the other hand, Questions (1) and (3) do arise for consideration.

50    As the moving party, the onus is on Jats Joint to establish that there has been no contravention of the SCHADS Award as alleged in the Compliance Notice: see Hana Express Group Pty Ltd v Fair Work Ombudsman [2020] FCCA 54; (2020) 350 FLR 359 at [48], [52] (Driver J).

Interpretation of SCHADS Award – applicable principle

51    The parties did not dispute the general principles of interpretation to be applied to the SCHADS Award. They were recently summarised by a Full Court of the Federal Court in Corporate Air Charter Pty Ltd v Australian Federation of Air Pilots [2025] FCAFC 45 at [8]‍–‍[12] (Logan, Dowling, and McDonald JJ):

[8]    Those principles are well-established and apply similarly to awards and enterprise agreements made under the Act: see One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union [2018] FCAFC 77; 262 FCR 527 at 565 [189] (Bromberg, Katzmann and O’Callaghan JJ), recently cited in Construction, Forestry, Maritime, Mining and Energy Union v Fremantle Port Authority [2024] FCA 848; 333 IR 337 at 385 [23]. Those principles may be summarised as follows.

[9]    The starting point for interpretation of an award or enterprise agreement is the ordinary meaning of the words, read as a whole and in context: City of Wanneroo v Holmes [1989] FCA 369; (1989) 30 IR 362 at 378 (French J), cited with approval in WorkPac Pty Ltd v Skene [2018] FCAFC 131; 264 FCR 536 at 580 [197] (Tracey, Bromberg and Rangiah JJ). The context will include the statutory context provided by the Act.

[10]    The context will also include the industrial context. The interpretation “... turns on the language of the particular agreement [or award], understood in the light of its industrial context and purpose ...”: Amcor Ltd v Construction, Forestry, Mining and Energy Union [2005] HCA 10; 222 CLR 241 at 246 [2] (Gleeson CJ and McHugh J); WorkPac at 580 [197].

[11]    The words are not to be interpreted in a vacuum divorced from industrial realities: Wanneroo at 378. 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: see Wanneroo at 378-9, citing George A Bond & Co Ltd (in liq) v McKenzie [1929] AR (NSW) 498 at 503 (Street J); WorkPac at 580 [197].

[12]    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: see Kucks v CSR Ltd (1996) 66 IR 182 at 184 (Madgwick J); Shop Distributive and Allied Employees’ Association v Woolworths SA Pty Ltd [2011] FCAFC 67 at [16] (Marshall, Tracey and Flick JJ); Amcor at 271-2 [96] (Kirby J); WorkPac at 580 [197].

52    The parties largely accepted that there is little of significance in the drafting history of the provisions or in industry practice. The Commission published an exposure draft of the SCHADS Award on 25 September 2009 for public consultation. After the Award came into operation, there were amendments to cll 25.4 and 25.7 in November 2012. However, there appeared to be no real contention that either the drafting process or subsequent amendments shed light on the workings of the sleepover provisions in their application to this case. Additionally, Jats Joint submitted, and it was not disputed, that the SCHADS Award is the only modern award to provide for a sleepover.

53    In the absence of submissions that draw insight from the historical or wider industrial context, attention must turn to the text of the SCHADS Award.

54    There was a minor disagreement between the parties as to the application of the presumption of liberal interpretation. The FWO submitted that a broad and beneficial interpretation of the SCHADS Award was appropriate. Jats Joint argued against its deployment because the Fair Work Commission is required to set “a fair and relevant minimum safety net of terms and conditions” having regard to, and striking balance between, the competing objectives in ss 134(1)(a)‍–‍(h) of the Fair Work Act.

55    Of particular relevance to this case, ss 134(1)(d), (da), (f) and (g), under the heading of “[t]he modern awards objective”, provide for the Fair Work Commission to ensure that modern awards:

provide a fair and relevant minimum safety net of terms and conditions, taking into account:

(d)    the need to promote flexible modern work practices and the efficient and productive performance of work; and

(da)    the need to provide additional remuneration for:

(i)    employees working overtime; or

(ii)    employees working unsocial, irregular or unpredictable hours; or

(iii)    employees working on weekends or public holidays; or

(iv)    employees working shifts; and

(f)    the likely impact of any exercise of modern award powers on business, including on productivity, employment costs and the regulatory burden; and

(g)    the need to ensure a simple, easy to understand, stable and sustainable modern award system for Australia that avoids unnecessary overlap of modern awards;

56    I accept Jats Joint’s submission that the presumption offers little assistance in a context where competing public interests have been balanced: Carr v Western Australia (2007) 232 CLR 138; [2007] HCA 47 at [5] (Gleeson CJ); see also Chief Executive Officer of Customs v Adelaide Brighton Cement Ltd (2004) 139 FCR 147; [2004] FCAFC 183 at [17]. In my view, the presumption can only be of assistance if there remains ambiguity once the text of the SCHADS Award is properly understood: see New South Wales Aboriginal Land Council v Minister Administering the Crown Lands Act (2016) 260 CLR 232; [2016] HCA 50 at [33] (French CJ, Kiefel, Bell and Keane JJ); see also at [92], [94] (Gageler J). What will become evident is that the text of the SCHADS Award in relation to sleepovers is not always clear when the Award provisions are read as a whole. Neat solutions are difficult to find. Accordingly, an interpretation that fits best with the relevant provisions as a whole should be preferred.

Payment of night shift loading in the relevant period

57    As explained earlier in these reasons, the alleged contravention is a failure by Jats Joint to pay a loading of 15% for the whole of each night shift worked in the relevant period. The shift allowance and penalty rates for night shifts are set out in cl 29.3(b). However, it is important to locate the provision in its wider award context and, therefore, it is convenient to start by considering cl 25.1 which deals with ordinary hours of work.

Ordinary hours are worked in shifts

58    Ordinary hours of work are prescribed by cl 25.1 to be 38 hours per week or an average of 38 hours per week: cl 25.1(a). There is no dispute between the parties that a sleepover does not involve ordinary hours of work. Clause 25.1(a) also prescribes the mode of working ordinary hours. Ordinary hours are worked either:

(1)    in a week of five days in shifts not exceeding eight hours each (cl 25.1(a)(i));

(2)    in a fortnight of 76 hours in 10 shifts not exceeding eight hours each (cl 25.1(a)(ii)); or

(3)    in a four week period of 152 hours to be worked as 19 shifts of eight hours each, subject to practicality (cl 25.1(a)(iii)).

By agreement, the ordinary hours may be worked up to 10 hours per shift: cl 25.1(b).

59    A plain reading of cl 25.1 indicates that ordinary hours, which do not include the hours spent on a sleepover, are to be worked in shifts, and those shifts of ordinary hours are limited to eight hours or, by agreement, 10 hours.

Shiftwork and penalty rates

60    Paragraph 25.2(b) defines a “shiftworker” as “an employee who works shifts in accordance with clause 29—Shiftwork” (emphasis added). Clause 29 identifies three kinds of shifts and prescribes different shift allowances and penalty rates for them:

(1)    An employee who works an afternoon shift (ie, any shift which finishes after 8.00pm and at or before 12 midnight Monday to Friday) is to be paid a loading of 12.5% of their ordinary rate “for the whole of such shift”;

(2)    An employee who works a night shift (any shift which finishes after 12 midnight or commences before 6.00am Monday to Friday) is to be paid a loading of 15% of their ordinary rate “for the whole of such shift”;

(3)    An employee who works a public holiday shift (ie, any time worked between midnight on the night prior to the public holiday and midnight of the public holiday) will be paid a loading of 150% of their ordinary rate of pay “for that part of such a shift” which is on the public holiday.

61    Thus, the basic premises of cll 25.1 and 25.2 are that ordinary hours are worked by an employee in shifts and that an employee works a shift.

62    It should be recognised at this point that there is a difference between the basis of payment for, on the one hand, afternoon and night shifts and, on the other hand, time worked on a public holiday. In the former case, the employee is paid at the relevant penalty rate “for the whole of such shift”. In the case of the latter, only those hours worked on the public holiday are paid at the relevant penalty rate. I will return later in these reasons to the significance of this difference. However, in all cases, the payment is made by reference to the ordinary hours worked in a shift.

Jats Joint’s interpretation: shifts do not include sleepovers

63    On Jats Joint’s interpretation, shifts for the purposes of cl 29 cannot include time spent on a sleepover. It was submitted “that a sleepover period is a separate and distinct provision from a shift or period of work” and that cl 25.7 “operates on its face as a stand-alone, specific and complete regulation of sleepover arrangements under the Award, to the exclusion of other, more general provisions”. The essential argument is that, not only is a shift the mode through which ordinary hours are worked but, by negative implication, it cannot include sleepover time which is dealt with separately in cl 25.7.

Separate treatment of sleepovers

64    The following features of cl 25.7 support Jats Joint’s interpretation:

(1)    The duration of a sleepover is identified by reference to a “span for a sleepover” or “sleepover period”. There is no reference to a sleepover forming part of a shift. The only mention of a shift is in differentiating a sleepover under cl 25.7 from “an opportunity to sleep” which is expressly provided to occur during a 24 hour shift under cl 25.8(b).

(2)    There is specific provision made for the payment of “a sleepover allowance of 4.9% of the standard rate for each night on which they sleep over”: cl 25.7(d). There is no attempt to reconcile this entitlement with the shift loadings prescribed by cl 29.3. The fact that this remuneration is expressly dealt with tends to suggest that adjacent periods of ordinary hours do not, by reason of a sleepover, operate to provide for additional unstated payment.

(3)    In circumstances where an employee on a sleepover is required to perform work during the sleepover period, “the employee will be paid for the time worked at the prescribed overtime rate with a minimum payment as for one hour worked”: cl 25.7(e). The prescribed overtime rate is dealt with in cl 28; not the night shift rate which is dealt with in cl 29. Such treatment sits uncomfortably, although not irreconcilably, with the proposition that the sleepover forms part of a shift including adjacent periods of ordinary working hours. Payment for work performed during a sleepover is expressly dealt with. No attempt is made to specify additional payments for adjacent periods of ordinary work.

(4)    Paragraph 25.7(f) allows an employer to roster an employee to perform work immediately before and/or immediately after the sleepover period. If so rostered, at least four hours of work must be rostered in one adjacent period. The payment for the ordinary hours in the adjacent period or periods is in addition to the sleepover payment. There is merit in the submission by Jats Joint that:

Having expressly turned their minds to the need for work to be performed before and/or after a sleepover and to provide additional remuneration for that sleepover, it is difficult to see how … by inadvertence, the drafters have overlooked the shift penalties payable with respect to the work performed before and after a sleepover.

65    The FWO argued that cl 25.7 should not be read as “covering the field in relation to sleepovers”. Undoubtedly, as the FWO submits, cl 25.7 must operate “in a contextual ecosystem of the other clauses”. That is evident from the express terms of cl 25.7(b) which applies the provisions of cl 25.5 to sleepovers. However, as indicated earlier in these reasons, the basic premises of cll 25.1 and 25.2 are that ordinary hours are worked in shifts and that shifts are worked. The separate treatment of sleepovers in cl 25.7 tends to support the implication that, express qualification aside, the terms and conditions of sleepovers are to be found in that separate clause.

66    In this respect, the FWO also submitted that Jats Joint’s acceptance that ordinary working hours in adjacent periods are paid at the applicable weekend rates counts against the applicant’s position. However, Jats Joint also accepts that those adjacent periods of working hours must be paid at the applicable shift rate. The question remains what the applicable shift rate is to be.

Supported by separate treatment of other working arrangements

67    Jats Joint’s argument that a shift does not include a sleepover is also supported by the separate treatment of other working arrangements. For example, a broken shift is “a shift worked by an employee that includes one or more breaks (other than a meal break) and where the span of hours is not more than 12 hours”. During the relevant period, para 25.6(b) provided that a broken shift would be paid “at ordinary pay with penalty rates and shift allowances in accordance with clause 29—Shiftwork, with shift allowances being determined by the finishing time of the broken shift” (emphasis added).

68    The specific provision for payment by reference to the finishing time of a broken shift militates against the view that the payment of a night shift penalty rate for sleepover adjacent periods of ordinary work was intended to be determined by an unstated extension of a shift period achieved through a sleepover.

69    24 hour shifts (cl 25.8) and excursions (cl 25.9) are also examples of particular workplace arrangements that specify, in terms, particular payments. Those provisions support the view that when cl 25 intends for there to be special payment arrangements, those payments are set out expressly.

Shifts in excess of ordinary hours under cl 25.1

70    Jats Joint also submitted that a shift cannot include a sleepover because, in circumstances where a sleepover is rostered in between two periods of ordinary working hours in accordance with cl 25.7(f), and on the FWO’s premise that the entire period of sleepover and adjacent periods of ordinary working hours comprises one shift, the combined ordinary working hours within the shift would likely (and did in the case of Ms Richards) exceed the capped hours prescribed by cl 25.1.

71    I agree with the parties that the preferred reading of cl 25.1 is that the caps are limited to ordinary working hours (thereby excluding the sleepover hours). While cl 25.7(f) is not rendered inutile by the FWO’s interpretation, I accept Jats Joint’s position that cl 25.7(f) would be considerably constrained in allowing an employer to make appropriate rostering arrangements. That too works in favour of Jats Joint’s interpretation.

The FWO’s interpretation: shifts include sleepovers

72    On the FWO’s interpretation, shifts, at least for the purposes of determining the penalty rates to be applied under cl 29.3, include a sleepover period and, accordingly, the night shift penalty rate is payable under cl 29.3(b) where a night shift (inclusive of the sleepover) finishes after 12.00 midnight or commences before 6.00am. The FWO advanced three main arguments. The first two will be considered under this heading. The third will be considered under the heading “Breaks between shifts” at [83]‍–‍[98].

Clause 29.4: shifts include sleepover

73    First, the FWO relied on cl 29.4 which, during the relevant period, was in the following terms (emphasis added):

Shifts are to be worked in one continuous block of hours that may include meal breaks and sleepover.

74    The FWO submitted that the text of cl 29.4 indicates that a sleepover forms part of a shift. (There was an amendment to cl 29.4 that took effect from 1 July 2022, which added the following words to the end of cl 29.4: “, … except where broken in accordance with clause 25.6”. That amendment took effect after the relevant period concluded).

75    In my view, the FWO’s interpretation of cl 29.4 does not sit comfortably with cl 29.3 which provides an employee who works a shift will be paid a loading “for the whole of such shift”. The language adopted by the drafters for cl 29.3 presupposes that the whole of the shift which is worked is constituted by ordinary hours of work to which a loading is capable of application. There is little room in that chosen language for a sleepover to constitute part of that shift. That is consistent with the premises underlying cll 25.1 and 25.2(b).

76    By contrast, payment of a public holiday penalty under cl 29.3(c) is limited to “that part of such shift” which is on the public holiday. Not only were the drafters alert to the possibility of an adjacent sleepover (cl 29.4), but they also made a deliberate drafting choice when penalty rates were to apply for less than the entire shift. If a sleepover were intended to constitute part of the postulated shift, then arguably cl 29.3(b) might have been drafted to recognise that the night shift rate would apply only to the ordinary hours component of that shift period.

How then is cl 29.4 to be given a coherent reading?

77    How can cl 29.4 be read in order to give it a coherent reading? Jats Joint submitted that cl 29.4 does not require that every shift include a sleepover. Instead, the use of the permissive word “may” recognises that a shift might be rostered in a way to include a sleepover between ordinary hours of work. That is, a single shift can be rostered to start before, and conclude, after a sleepover period. At the hearing, Counsel for Jats Joint took me to Library Article K600551 which was said to give an example of such a situation. That article, however, is ambiguous on that point. On the one hand, it proceeds from an assumption that the sleepover and the hours before and/or after the sleepover are counted as one continuous shift. On the other hand, the example provided of a sleepover rostered between two periods of ordinary hours of work is stated to be neither an afternoon shift nor a night shift.

78    The FWO submitted that it is not possible under the SCHADS Award for an employer to roster an employee in this way to work a single shift that spans a sleepover and two adjoining periods of ordinary hours of work. Of course, that submission proceeds from the premise of the FWO’s interpretation that such combined periods invariably constitute a single shift. From that premise, the approach of Jats Joint to these combined periods would serve no real purpose. However, that depends on the FWO’s interpretation being accepted. As to utility, Jats Joint submitted that its interpretation provides an employer with rostering flexibility which would come at the cost to the employer of paying a night shift rate for the period of ordinary working hours adjoining the nightshift. That, however, would be a matter for the employer and employee to agree.

79    The FWO suggested during the hearing that Jats Joint’s approach to these combined periods potentially subverted some of the other penalties and allowances. However, that submission was not developed. It was also suggested that it would be subject to the broken shift requirements in cl 25.6. That may be so, but that would simply mean that any time worked in excess of a span of 12 hours would be remunerated at double time: cl 25.6(c). That is not a situation that arises in this case. An opportunity was provided at the end of the hearing for the parties to provide further clarity on the question of whether an employer can roster a shift to include a sleepover between ordinary hours of work. Neither party provided any further submissions.

80    There is some support for Jats Joint’s interpretation in the terms of cl 29.1 which allows the employer to specify “the period over which the shift is ordinarily worked”. Nonetheless, even if such an approach were not correct, I would not consider the text of cl 29.4 to be so intractable as to compel the conclusion that a shift necessarily includes a sleepover. Clause 29.4 is not definitional. It provides for the mode for working shifts. That is, shifts are to be worked in one continuous block of hours. That block of hours may include a meal break and sleepover. However, that does not lead necessarily to the conclusion that a shift includes a sleepover. There might be a lack of drafting precision but, as the Full Court summarised in Corporate Air Charter, the terms of modern awards are not infrequently characterised by imprecise drafting.

Rostered work

81    Secondly, it was submitted that sleepover time is rostered work pursuant to cl 25.5 as part of an employee’s roster, and that cl 25.5 applies to “ordinary hours of work”. It was submitted that “[i]mposing rostering conditions on sleepovers supports the FWO’s construction that they ought to be treated as time that is subject to the other entitlements in the SCHADS Award, including the night shift loading”.

82    This argument is too ambitious. In its terms, the rostering requirement in cl 25.5(a) applies to “ordinary hours of work”, which does not include a sleepover. The balance of cl 25.5 deals with the administration of rostering arrangements. While cl 25.7(b) provides that the provisions of cl 25.5 apply for a sleepover, its operation necessarily is limited to the administration provisions in cll 25.5(b)‍–‍(f). As Jats Joint submitted in reply, the “reference to sleepovers as rostered work sits uncomfortably with the provisions of [cl] 25.7(f) that ‘An employer may roster an employee to perform work immediately before and/or after the sleepover period’”. The most that can be said is that the word “duty” in cl 25.5(d)(ii) can be read, by dint of 25.7(b), to include a sleepover. However, that does not have any bearing on the question of whether a sleepover is part of a “shift” for the purposes of cl 29.3.

Breaks between shifts

83    The parties disagreed on the interpretation of cl 25.4 which provides for breaks between shifts. An employee will be allowed a break of not less than 10 hours between the end of one shift or period of work and the start of another: cl 25.4(a). Importantly, the employer and employee can agree that the break between (cl 25.4(b)):

(1)    “the end of a shift and the commencement of a shift contiguous with the start of a sleepover” (cl 25.4(b)(i)); or

(2)    “a shift commencing after the end of a shift contiguous with a sleepover” (cl 25.4(b)(ii));

may not be less than eight hours.

Thus, despite what may have resulted from the operation of cl 25.4(a), cl 25.4(b) deals specifically with the minimum break period when sleepovers are contiguous with shifts. The drafting of cl 25.4 is characterised by some obscurity, and the parties endeavoured to provide workable interpretations.

Jats Joint’s position on cl 25.4

84    Jats Joint submitted that “[t]he SCHADS Award does not treat a sleepover as constituting work, rather it constitutes a break from work” within the meaning of cl 25.4. In support of that submission, it was contended that:

(1)    A “shift” is treated in the SCHADS Award as synonymous with a “period of work”.

(2)    Characterising a sleepover as a period of rest is supported textually by the references in cl 25.7(c) to the provision of a separate room with a bed.

(3)    A shift which is “contiguous with” a sleepover carries the connotation that the sleepover period touches the shift at the boundary between the two periods. As such, the SCHADS Award distinguishes between a sleepover and the shift either side of it “as being other independent periods of time either side of a temporal boundary. It is meant to convey that while they occur immediately one after the other, each are identifiably separate and distinct periods”.

85    On that interpretation, a sleepover can be rostered as a break between two adjacent shifts of ordinary hours. That would allow for patterns of rostering that would include Category 3 outlined at [35]‍–‍[37].

86    Counsel for Jats Joint accepted that this interpretation did not fit comfortably into cl 25.4(b)(i). The end of the break is identified as “the commencement of a shift contiguous with the start of a sleepover” (emphasis added). That could not be read as including a sleepover followed immediately by a shift of ordinary hours.

87    There is more scope for accommodating Category 3 patterns of rostering under cl 25.4(b)(ii). While the interpretation of that paragraph is not without its difficulties, under a Category 3 pattern of rostering, the second shift might fall within the meaning of “a shift commencing after the end of a shift” (ie, the first shift), with the first shift being contiguous with a sleepover.

88    Indeed, as Jats Joint submitted, it does seem that, by the simultaneous amendment to cll 25.4 (to allow for an eight hour break by agreement in cl 25.4(b)) and 25.7 (to allow for the rostering of work to be performed on both sides of an eight hour sleepover), the text of the amended provisions reveals an intention that a sleepover could constitute a break between shifts contiguous with a sleepover.

The FWO’s position on cl 25.4

89    The FWO denied that a sleepover could be characterised as a “rest” between periods of ordinary working hours. Various submissions were put forward in support of that proposition:

(1)    The heading to cl 25.4 refers to “Rest breaks between rostered work”. “An employee is entitled not just to a ‘break’ between shifts but a ‘rest break’”.

(2)    Paragraph 25.4(a) requires a 10 hour break between either “the end of one shift or period of work and the start of another” (emphasis added). Neither a shift nor a “period of work” could be a rest break.

(3)    There is a clear distinction in various industrial contexts between an employee being at work and an employee carrying on private activities.

(a)    A sleepover is time at work; it “is not the person’s own personal or private time”.

(b)    The purpose of the sleepover provision “is to allow a facility by which an employee can be directed to assist when required at night”.

(c)    The purpose of a rest break “is to refresh the employee”.

(4)    The purpose of clauses like cl 25.4 “is to ensure that employees are given adequate breaks away from work, and where that does not occur, time at work (including sleepovers) is to be regulated by the SCHADS Award and compensated appropriately”.

(5)    The sleepover allowance “in part compensates the fact that the sleeper is on the employer’s premises”, whereas the “night shift loading separately recognises an additional benefit for the working of overnight hours”.

(6)    Prior to its amendment to include cl 25.4(b), cl 25.4 read: “An employee will be allowed a break of not less than 10 hours between the end of one shift or period of duty and the commencement of another”. It was submitted that the additional flexibility introduced by cl 25.4(b) should not undermine the principle concerning rest breaks.

90    There is textual support for the submission that a sleepover provides a “facility by which an employee can be directed to assist when required at night” and, therefore, time on a sleepover is time spent at work. However, that a sleepover facilitates the contingency of overnight care and is time spent at work is not incompatible with a sleepover being characterised as a break period. Nor is that characterisation necessarily displaced by an acceptance that a sleepover is not an employee’s private time. The FWO seeks to draw a distinction between time at work and private time which is too blunt for the purposes of the SCHADS Award.

91    There are other difficulties with the FWO’s submissions.

92    First, while the heading to cl 25.4 refers to “Rest breaks”, the word “rest” is not used in the substantive clauses. While headings can inform the context within which substantive provisions are interpreted, and can be considered in the case of ambiguity, they do not “control the permissible scope of the substantive provisions”: Concrete Constructions (NSW) Pty Limited v Nelson (1990) 169 CLR 594 at 601 (Mason CJ, Deane, Dawson and Gaudron JJ). Care must be taken with how far headings can permissibly present a purpose or interpretation that does not square with the text of substantive provisions.

93    Secondly, it is not evident that a sleepover can be characterised as a “period of work” for the purposes of cl 25.4(a). There is no reference to a “period of work” in cl 25.4(b), and it is not obvious that there is a “period of work” distinct from a “shift” that could not be made the subject of agreement under cl 25.4(b). Even if a “period of work” embraces work that is distinct from a shift, the references to “perform[ing] work”, “time worked”, “duration of work” and “periods of work” in cl 25.7(e) and (f) are textual indicators that sleepovers are not “periods of work” for the purposes of cl 25.4(a).

94    Thirdly, there is no dispute that a sleepover, and hours worked during a sleepover, are to be appropriately compensated. The question is whether the suggested additional compensation advanced by the FWO can be supported by the terms of the SCHADS Award.

95    Fourthly, in support of the contention that there is a distinction in various industrial contexts between an employee, on the one hand, being at work and, on the other hand, at rest or carrying on private activities, the FWO referred to three main cases: Warramunda Village Inc v Pryde (2002) 116 FCR 58; [2002] FCA 250; Fair Work Ombudsman v Foot & Thai Massage Pty Ltd (in liq) (No 4) [2021] FCA 1242, and Corporate Air Charter.

(1)    In Warramunda the question under the relevant award was whether employees who worked a so called “sleepover shift” were engaged in “work” or were “on call”. The two categories of “work” and “on call” were remunerated differently. The “sleepover shift” in Warramunda was of a different character to the sleepover period in this case. The employee assigned a sleepover shift was a supervisor who was expected to render service as required, albeit that it would be “intermittent and infrequent”: at [18]. Entitlement to payment for work arose if an employee was “ready, willing and available to work”. As Finkelstein J said, the award in question did not “require the worker actually to perform any work to be entitled to his pay”: at [67]. There was no separate treatment of sleepover shifts in the award considered in Warramunda, including provision for payment of an allowance or for work actually performed whilst on shift. The context in Warramunda is sufficiently distinguishable from the present case.

(2)    In Foot & Thai Massage, the question was whether the relevant employees had been required to work unreasonable hours in contravention of s 62(1) of the Fair Work Act. Katzmann J considered the employees to be “working” when the employer “required them to be ‘available’ to work throughout the day and they were ready, willing, and able to perform the work”: at [466]. This case is far removed from the present context.

(3)    In Corporate Air Charter, a Full Court of the Federal Court considered whether a pilot on “reserve or stand-by duty” was working for the purposes of the relevant award. The award made provision for such duty, but no express provision for remuneration. Logan, Dowling, and McDonald JJ reasoned that the particular provisions in the award, and the treatment of similar industrial instruments, provided “contextual support for stand-by duty being work under” the award: at [34]. In so concluding, their Honours reviewed a number of cases, including Warramunda, and found that “the authorities support the proposition that if an employee is instructed by their employer to do certain things and not to do certain things during a period, then during that period they are on duty and the time is generally regarded as time worked”: at [33]. However, their Honours continued (at [33]):

Of course, whether that is so in the case of a particular award or enterprise agreement will depend on the way in which those instruments use particular expressions, and on whether they provide for certain periods when employees are subject to instructions to be compensated for in other ways – for example, by the provision of a special allowance.

96    As foreshadowed by the Full Court in Corporate Air Charter, the observations in those three cases are of limited utility in a context, such as the present case, where the award deals specifically with sleepovers, including how the time spent on a sleepover (whether performing work or not) is to be paid. What was said in those cases about the distinction between time worked and private time has little bearing on the meaning of “break” in cl 25.4 where the “break” period in cl 25.4(b) is measured in its terms by reference to a shift contiguous with a sleepover. The superimposition of distinctions unsupported by the text of the SCHADS Award tends to obscure, rather than reveal, the operation of those provisions.

97    Fifthly, the FWO’s ultimate position has the consequence that a sleepover, as a shift or period of work, is not a break and, accordingly, cannot be rostered in between periods of ordinary working hours. Furthermore, the FWO accepted that the submission, that a sleepover is part of a shift, has the following consequences under cl 25.4(b):

(1)    Under cl 25.4(b)(i), there would need to be a period of ordinary hours of work, followed by a break of eight hours, followed by a further period of ordinary working hours, and concluding with a sleepover contiguous with the end of the second period of working hours.

(2)    Under cl 25.4(b)(ii), there would need to be a sleepover, immediately followed by a contiguous period of ordinary hours of work, followed by a break of eight hours, and concluding with a second period of ordinary hours of work.

98    The main difficulty with these consequences is that it would not be possible to have Category 3 periods of rostering. That cannot be a correct reading because cl 25.7(f) provides that “[a]n employer may roster an employee to perform work immediately before and/or immediately after the sleepover period …” (emphasis added). The FWO’s interpretation cl 25.4 would deny the clear terms of cl 25.7(f).

Other minor arguments

99    In oral submissions counsel for the FWO advanced other minor arguments which should be noted but can be put to one side. First, the “Breaks” provision in cl 27 refers to meal breaks and tea breaks, but not to a sleepover as a break. It was submitted that, while cl 29.4 specifically refers to meal breaks and sleepover, the latter is not dealt with under cl 27. However, cl 25.4 is not directed to the breaks in cl 27.

100    Secondly, that a rostered sleepover may not be refused by an employee except with reasonable cause in limited circumstances (ie, a change of roster with seven days’ notice). However, the fact that sleepovers are subjected to the rostering arrangements by operation of cl 25.7(b) has nothing to say about the character of a sleepover as a break between rostered adjacent periods of ordinary hours.

101    Thirdly, that if the word “contiguous” were to play the role advanced by Jats Joint, then one might have expected to see it appear also in cl 25.7(f). However, as indicated earlier in these reasons, the concurrent amendment of the two provisions suggests that there was intended to be coherence between the two provisions. The form taken by the amended version of cl 25.7(f) is likely to have been a product of the pre-amendment terms of that provision.

102    Fourthly, that Jats Joint’s interpretation of cl 25.4 is in contradiction to the FWO’s interpretation of cl 29.4. That objection depends on the premise of the FWO’s interpretation being accepted, which has been addressed earlier in these reasons.

103    Fifthly, the fact that an employee can complete a sleepover without working ordinary hours in an adjacent period (provided that the employee is actually paid for four hours) is completely inconsistent with a sleepover being a rest break. However, cl 25.4 is not directed to circumstances where a sleepover is only paid but not completed.

Conclusion on cl 25.4

104    Given the uncertainties of the FWO’s interpretation of cl 25.4, I consider that Jats Joint’s interpretation is preferable. That interpretation tends in favour of the conclusion that sleepovers are separate and distinct periods of time that do not form part of a shift.

105    While I have expressed a preference for Jats Joint’s interpretation of cl 25.4, given the factual foundation of this case, it is not necessary for me to reach a concluded view because the Compliance Notice does not identify a contravention of that provision. It is enough to say that the FWO’s interpretation of cl 25.4 is unlikely to assist its interpretation that a shift includes a sleepover for the purpose of cl 29.3(b).

Conclusion on ground 2

106    While the position is not free from doubt, and should be clarified by amendment to the SCHADS Award when the opportunity arises, I accept Jats Joint’s submissions that a sleepover period does not form part of a shift. That is the interpretation that is most cohesive with the SCHADS Award when understood as a whole. The FWO’s strongest argument rested on the wording of cl 29.4. However, even if Jats Joint’s interpretation of cl 29.4 were not correct, I would not consider that the text of cl 29.4 is so intractable so as to compel the conclusion that a shift necessarily includes a sleepover.

107    Consequently, given Ms Richards’ shifts were not rostered to include contiguous sleepover periods, those periods can have no impact on the rates of pay under cl 29.3 for adjacent shifts of ordinary working hours. It follows that Jats Joint was not required to pay Ms Richards at the night shift rate for adjacent shifts either or each side of the relevant sleepover periods in Categories 1 and 3 identified earlier in these reasons. Given also that it was accepted that Ms Richards was not rostered to work and did not work ordinary hours between 12.00 midnight and 6.00am Monday to Friday, I am satisfied that Jats Joint has discharged its onus of showing that it did not, during the relevant period, contravene cl 29.3 as alleged in the Compliance Notice. Accordingly, Jats Joint’s challenge to the Compliance Notice under Ground 2 is successful.

Ground 1

108    As indicated, in its written submissions, Jats Joint described Ground 1 as a secondary issue. Given the outcome on its primary case, it is not necessary to consider Ground 1.

Judicial review of the Inspector’s decision to issue the compliance notice

109    During the course of the hearing, Jats Joint sought to challenge the Inspector’s decision to issue the Compliance Notice. To that end, it sought to challenge the Inspector’s evidence in cross-examination. The FWO objected to the relevance of that cross-examination to the allegations made in the Amended Statement of Claim. The parties agreed that the Inspector would give evidence and be cross-examined, and that the evidence would be received by the Court on a conditional basis pending the Court’s determination of relevance.

110    Jats Joint submitted that the Court had jurisdiction under s 562 of the Act to hear the challenge to the Inspector’s decision. Even if the Court has jurisdiction as contended, the difficulty with Jats Joint’s submission is that the Amended Statement of Claim does not seek to invoke that jurisdiction. It finds no reflection in the grounds for review, or the orders sought from the Court that invoke s 717 of the Act.

111    During the hearing, Counsel for Jats Joint pointed to the following paragraphs in its Amended Statement of Claim:

The Inspector could only have reasonably formed a view that the Respondent had contravened clause 29.3(b) of the SCHADS Award if the Inspector identified a shift or shifts that, in the Inspector’s view, met the definition of night shift.

The Compliance notice does not identify as a question of fact any particular shift or shifts that it alleges that Ms Richards worked in the Period that met the definition of night shift.

112    Those paragraphs appear as part of background pleadings describing the employment of Ms Richards by Jats Joint. They identify the factual foundation for the grounds stated for the s 717 review. They cannot be fairly read as pleading a separate challenge to the decision of the Inspector invoking the Court’s jurisdiction for such a review.

113    If I had not reached my conclusion on Ground 2, I would not have considered a judicial review challenge under s 562 of the Act. Consequently, I would not have admitted the oral evidence of the Inspector given under cross-examination that was said to be relevant to that attempted review.

DeclaRATIONS

114    In its Amended Statement of Claim, Jats Joint sought the three declarations set out earlier in these reasons at [2]. Undoubtedly, the Court has the power to make declarations. However, as stated by the High Court in Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 592 (Mason CJ, Dawson, Toohey, and Gaudron JJ):

declaratory relief must be directed to the determination of legal controversies and not answering abstract or hypothetical questions. … [R]elief will not be granted if the question is “purely hypothetical”, if relief is “claimed in relation to circumstances [that] have not occurred and might never happen” of if “the Court’s declaration will produce no foreseeable consequences for the parties”.

(citations omitted).

115    To the extent that the questions subject to the proposed declarations are relevant to the issue to be determined in this proceeding, they have been dealt with in my reasons in support of the conclusion on Ground 2. Otherwise, those questions do not arise in this proceeding and, therefore, are hypothetical. As counsel for the FWO said at the hearing, the declarations have no utility. Accordingly, I make no declaration in this proceeding.

Disposition

116    I have concluded that Jats Joint has been successful on Ground 2.

117    It appeared to be common ground at the hearing that, in the event of success on Ground 2, the appropriate order under s 717(3) of the Fair Work Act would be an order cancelling the Compliance Notice. However, the parties will be provided with seven days following the date of judgment to provide written submissions on the appropriate order under s 717(3) of the Act to give effect to these reasons.

118    There will be no orders as to costs.

Associate:

Dated:    8 July 2025