FEDERAL COURT OF AUSTRALIA

Fair Work Ombudsman v Woolworths Group Limited; Fair Work Ombudsman v Coles Supermarkets Australia Pty Ltd; Baker v Woolworths Group Limited; Pabalan v Coles Supermarkets Australia Pty Ltd [2025] FCA 1092

ORDERS

THE COURT ORDERS THAT:

1.    The proceeding be listed for case management on Monday, 27 October 2025 at 9.30 am.

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

ORDERS

THE COURT ORDERS THAT:

1.    The proceeding be listed for case management on Monday, 27 October 2025 at 9.30 am.

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

ORDERS

THE COURT ORDERS THAT:

1.    The proceeding be listed for case management on Monday, 27 October 2025 at 9.30 am.

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

ORDERS

THE COURT ORDERS THAT:

1.    The proceeding be listed for case management on Monday, 27 October 2025 at 9.30 am.

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

REASONS FOR JUDGMENT

PERRAM J:

INTRODUCTION

1    This judgment concerns four separate actions which were heard in parallel:

(a)    Fair Work Ombudsman v Woolworths Group Limited (ACN 000 014 675) & Anor, NSD 581 of 2021 (‘FWO v Woolworths’);

(b)    Fair Work Ombudsman v Coles Supermarkets Australia Pty Ltd ACN 004 189 708, NSD 1252 of 2021 (‘FWO v Coles’);

(c)    Baker & Anor v Woolworths Limited ABN 88 000 014 675 & Anor, NSD 2004 of 2019 (‘Baker’); and

(d)    Pabalan v Coles Supermarkets Australia Pty Ltd ABN 45 004 189 708, NSD 542 of 2020 (‘Pabalan’).

2    Each concerns the alleged underpayment by Woolworths Group Limited bodies (collectively, ‘Woolworths’) and Coles Supermarkets Australia Pty Ltd (‘Coles’) of certain employees by reference to the General Retail Industry Award 2010 (the ‘Award’). In the actions brought by the Fair Work Ombudsman (the ‘FWO’), which I will refer to from time to time as the ‘regulatory proceedings’, the relief sought includes a claim for compensation on behalf of individual employees under s 545 of the Fair Work Act 2009 (Cth) (the ‘FW Act’). The Baker and Pabalan proceedings are class actions in which similar allegations are made against Woolworths and Coles albeit over a longer period of time.

3    The basic problem common to each action is that the employees in question were employed under written contracts providing for an annual salary. Woolworths and Coles did not keep track of the entitlements of these employees under the Award and hence, in many cases, did not pay entitlements which the employees properly had. Both Woolworths and Coles have made remediation payments (which in Woolworths’ case have totalled over $300 million and in Coles’ case over $7 million). Nevertheless, the FWO in the regulatory proceedings and the applicants in the class actions consider that more is due. Largely, this is because the parties disagree on the meaning of various clauses in the Award, the relevant contracts of employment and the FW Act.

Background

4    Before turning to the issues, it is convenient to outline some salient background matters in each proceeding.

5    In FWO v Woolworths, the FWO alleges that Woolworths underpaid about 19,000 employees whose employment was governed by the Award between 17 June 2015 to 30 September 2019. The employees in question are in store-based management positions. The most senior of these employees are store managers and the bulk consist of persons who were in charge of particular departments such as the dairy section.

6    The parties agreed that the case could not sensibly proceed in relation to all 19,000 employees. They sought to overcome this problem by selecting particular employees who were to serve as examples of the disputes between them and obtaining a ruling in the case of each. Initially, the FWO made specific allegations about 70 employees across the period from 5 March 2018 to 3 March 2019 (the ‘Calculation Period’). Ultimately, both parties thought this was too many but they disagreed about what an appropriate number would be. Woolworths wished to proceed on the basis of a sample of 10 employees but the FWO contended for 32. On 9 March 2022 I determined that the trial would proceed on the basis of 32 employees (the ‘Calculation Employees’): Fair Work Ombudsman v Woolworths Group Ltd (Calculation Employees) [2022] FCA 203. When the outcome of the trial is known the parties will apply the conclusions reached to the remaining employees.

7    Woolworths operates 1,076 stores in Australia. During the relevant period the 32 Calculation Employees were employed at five of these stores. These were the Town Hall store in Sydney’s central business district (Woolworths’ largest store in 2018), the Wheelers Hill and Camberwell stores in Melbourne, the Newstead store in Brisbane and the Macarthur Chambers store in Brisbane’s central business district. I shall refer to these as the Town Hall, Wheelers Hill, Camberwell, Newstead and Macarthur stores. Of the 32 Calculation Employees nine were called to give evidence. Seven were called by the FWO and two by Woolworths.

8    In FWO v Coles, the FWO alleges that Coles underpaid 8,767 employees across the period 1 January 2017 to 31 March 2020 (the ‘Assessment Period’). The employees are in management positions within individual stores and include store managers and the heads of individual departments within stores such as the butchery section.

9    I made orders on 25 July 2022 confining the FWO’s case against Coles to a representative sample of 42 employees (the ‘Sample Salaried Employees’). Unlike Woolworths, each of the Sample Salaried Employees did not necessarily work at a single store. Of the 42 employees, 15 were called to give evidence: nine by the FWO and six by Coles.

10    The background to Baker is summarised in Baker v Woolworths Group Limited (No 2) [2022] FCA 534 at [9]-[15] per Murphy J. In essence, the proceeding is a class action commenced by the applicants (Messrs Baker and Piro) under Pt IVA of the Federal Court of Australia Act 1976 (Cth) on their own behalf and on behalf of salaried Woolworths employees who worked at some time between 29 November 2013 and 29 November 2019.

11    In Pabalan, Ms Pabalan brings a representative proceeding on behalf of several thousand Coles managers.

Issues in dispute

Creation of issue tiers

12    On 8 April 2022 I determined in Fair Work Ombudsman v Woolworths Group Ltd (Case Management) [2022] FCA 376 that the issues in each action should be divided into three categories:

(a)    discrete questions of law about the interpretation of the Award, the FW Act and the contracts of employment (‘Tier 1 Issues’);

(b)    questions of mixed law and fact (‘Tier 2 Issues’); and

(c)    questions of fact only (‘Tier 3 Issues’).

13    There is significant commonality of issues between the proceedings. For this reason I have chosen to deal with the proceedings in one judgment. There are also, however, a number of differences, not only in the framing and organisation of issues but also in whether they were presented at all in a particular proceeding.

Scope of initial trial

14    One of the difficulties with this litigation is the manner in which a majority of the construction issues were posed by the parties in a context divorced from any facts. The point of the 32 Calculation Employees in FWO v Woolworths and the 42 Sample Salaried Employees in FWO v Coles was to permit these common questions to be determined by reference to actual facts. Although in some instances the parties did occasionally refer to these persons this was not a uniform practice. Further, it was clear that rather than starting with the facts of actual disputes and then proceeding to ascertain what the legal debates were the parties essentially approached the problem the other way around. Construction disputes were identified at a high level of generality, facts were an afterthought or, more often, forgotten.

15    This has two consequences. The first is that the parties have not identified factual disputes for each legal dispute which was the whole point of the process. Before progressing these proceedings any further this problem will need to be addressed. For each legal issue the parties are going to need to identify an employee whose work gives rise to the legal issue suggested. I do not see that there should be any difficulty in identifying these persons. The number of such persons should be kept to an absolute minimum. If a single employee can be used to resolve more than one legal issue then that course should be adopted. There is no need for the whole of the facts concerning that employee to be set out. A single instance (i.e. one shift) will suffice to make the legal issues not hypothetical.

16    The second consequence is the apparent pointlessness of the Tier 3 issues. These were said to relate to factual matters only. From the parties’ submissions it is difficult to understand what the Court was being asked to do in relation to these. At various junctures it has been necessary to resolve some of these issues (for example in relation to opening times of stores) but largely the parties did not seem to know what they intended by the trial of these Tier 3 issues or what practical purpose they served in helping the parties to resolve the wider issues that the regulatory proceedings present. It may be that the resolution of many of the Tier 1 and 2 issues will make them irrelevant. It may be that they were always irrelevant. In any event, I do not generally resolve the Tier 3 issues.

17    There are also some issues that although labelled as Tier 2 I also decline to resolve. By way of example, Issues 6(b)-(j) are all related in various ways to the application of cl 31.2(c). The parties have styled each issue as a Tier 2 Issue. In FWO v Woolworths (Case Management) [2022] FCA 376 at [4(b)] Tier 2 Issues were described as questions of law mixed with questions of fact. In their recitation of Issues 6(b)-(j) the parties posed a series of questions of law premised on certain factual circumstances but such questions are not mixed questions of fact and law; rather, they are questions of law on an assumed set of facts. For example, Issue 6(b) was as follows:

Where an employee has worked outside their rostered hours without the authorisation of, or having been required by, the employer to work such hours, are such additional hours included for the purposes of determining whether the employee has had a 12 hour rest period, or any agreed shorter rest period under clause 31.2(c) of the Retail Award, between the completion of work on one day and the commencement of work on the next day?

18    However, this issue was not related to any particular employee about whom such a finding was sought. As such Issues, 6(b) to (j) are misconceived and seek what are in effect advisory opinions about hypothetical factual scenarios untethered from facts. Although styled as Tier 2 mixed questions of law and fact, what the parties have actually posed in Issues 6(b) to 6(j) are questions of law on assumed facts. This observation is not just pedantry. In some cases, Issues 6(b) to (j) assume contestable factual material whose real world subtleties bear directly on the answer to the questions posed. Issue 6(b) illustrates the problem. Whether work done by an employee without a direction from an employer engages cl 31.2(c) is likely to be context dependent. There is, for example, a difference between the manager of the shelf stacking team who, being completely up to date with his allocated work, deliberately works back late to engage cl 31.2(c) and, on the other hand, the manager of the dairy counter who, completely snowed under by unrealistic work demands made by Woolworths, tries to keep her head above water by staying back late. By not tying the cl 31.2(c) question to any actual facts, Issue 6(b) is misconceived. The same may be said, perhaps more strongly, of Issue 6(c) which sought to survey the consequences of such consent-sapping circumstances on cl 31.2(c) but in a way untethered to any employee actually in those circumstances.

19    In light of these challenges, I will hold a case management hearing at 9.30 am on Monday, 27 October 2025. At that time, these issues can be discussed.

FWO v Woolworths

20    In FWO v Woolworths, the parties in this action were able to agree a table of 53 issues to be determined.

21    Given the concerns I have raised above about the insufficient linking of legal issues with factual disputes, I have not proposed to address the following issues in this judgment: 6(b)-(j), 7, 8, 9, 10, 11, 16, 17(b)-(d), 23, 24, 25, 27(b), 30, 31(b), 32(b), 34, 35, 36, 41, 45, 48, 49, 50, 51(b) and (d), and 52.

FWO v Coles

22    In FWO v Coles, the parties agreed there were 76 issues to be determined. In fact, there were 75 due to the existence of issues 19A and 73A, the non-existence of issue 28, and the removal of issues 70 and 74.

23    Again, given the concerns raised in the previous section, I have not proposed to address the following issues in this judgment: 7, 8, 12, 14, 16(a) and (b), 18, 20, 22, 23, 24, 25, 26, 29, 31, 33, 36, 40, 41, 44, 45, 47, 51, 54, 57, 58, 59, 64, 65, 69, 71, 75 and 76.

Baker

24    On 25 July 2022 and 7 December 2022 I made trial scope orders circumscribing the issues to be determined in Baker. The effect of the orders is that the Tier 1 and 2 issues which are common to group members will be determined in this proceeding. The state of affairs in relation to the Tier 3 issues is that only Mr Baker’s position will be examined and then only in relation to the issues concerning him which have been raised by the FWO in FWO v Woolworths. There are other Tier 3 issues concerning Mr Baker which are raised in the class action which have not yet been tried. None of the issues concerning Mr Piro were tried and his position is not the subject of these reasons.

25    By a list of issues dated 3 July 2023 the parties explained how the issues in this proceeding related to the issues in FWO v Woolworths. A number of issues were adopted wholesale from that action. That number is said by the applicants to be 32 however on my count it is 33 . On each of these common issues the applicants adopted the position of the FWO with one exception, being issue 42(b) in the FWO v Woolworths list of issues. Woolworths adopted its submissions from FWO v Woolworths on the common issues without reservation.

26    The list of issues also identified 14 issues which are said to be unique to this proceeding. The applicant submitted that eight of these are not unique in substance.

Pabalan

27    On 17 February 2023 I made orders which provided that two sets of issues would be determined at trial for the purposes of Pabalan. The first set of issues concerns Coles’ liability to Ms Pabalan and the principles and methodology applicable to the quantification of any compensation owing to her (stopping short however of the actual calculation of any such compensation). The second comprises the Tier 1 and Tier 2 issues common to Ms Pabalan and group members. No Tier 3 issues arise for consideration in this action.

28    To the extent that the issues in this proceeding and the issues in FWO v Coles overlap they are agreed by the parties to be contained in a document entitled ‘Amended Joint List of Common Questions’. Unlike in Baker the parties here did not adopt in a wholesale fashion issues from FWO v Coles. Rather, the list of common questions identifies all of the questions said to arise for determination and, where applicable, links those questions to analogous issues in FWO v Coles. In respect of those questions in the Pabalan proceeding for which there is an analogue in the FWO v Coles proceeding (being 30 of the total 40 in the list of common questions) the applicant adopted the FWO’s submissions and Coles largely adopted its own submissions. Of the remaining 10 questions the applicant contended that two raise substantively identical issues to issues already canvassed in FWO v Coles.

Structure

29    In light of the above, this judgment takes the following structure:

(a)    Part A deals with set-off and contractual construction;

(b)    Part B deals with record-keeping under the FW Act and the construction of s 557C;

(c)    Part C deals with agreements between employees and employers under the Award;

(d)    Part D deals with various entitlements under the Award including overtime;

(e)    Part E deals with issues relating to part-time employees;

(f)    Part F deals with certain employee-specific factual issues that arose in respect of Mr Baker, Ms Pabalan and Calculation Employee 11, Ms Brown;

(g)    Part G deals with calculation and allocation issues;

(h)    Part H deals with compensation; and

(i)    Part I deals with a limitations issue that arose in Pabalan.

PART A: SET-OFF

30    Issues 46 and 47 in FWO v Woolworths and Issues 73 and 73A in FWO v Coles relate to the operation of certain contractual clauses and their purported ability to ‘set off’ the annual salaries against any shortfall generated by entitlements under the Award. Issues 46 and 47 ask:

Issue 46

(a) On the proper construction and operation of the “Minimum Entitlements” clause, does the clause operate to:

(i) permit Woolworths to set off the Annual Salary (and other benefits and allowances) paid to a Salaried Employee in excess of their monetary entitlements under the Retail Award in each pay period during a 26-week period against any shortfall in the amount paid to the Salaried Employee for the Minimum Entitlements that arose under the Retail Award during other pay periods in the same 26-week period; or

(ii) permit Woolworths to set off fortnightly payments to a Salaried Employee paid in excess of their Minimum Entitlements prescribed in the Retail Award only against any shortfall in the amount paid to a Salaried Employee for the Minimum Entitlements that arose under the Retail Award during the particular fortnight?

(b) Is the “Minimum Entitlements” clause contrary to public policy, void and/or otherwise of no effect?

(c) Is the minimum entitlements clause capable of being read down from 26 weeks to 2 weeks in light of s 323 of the FW Act and clause 23.1 of the Retail Award?

Issue 47

When comparing payments made to a Salaried Employee against their Minimum Entitlements under the Retail Award (either on a pay period basis or a 26-week basis), can:

(a) payments of Annual Salary; and/or

(b) payments of benefits and allowances paid in addition to base salary and payment of salary for periods of leave be set off against the following Retail Award entitlements in that period:

(i) the Sunday Penalty Entitlements;

(ii) the Public Holiday Penalty Entitlements;

(iii) the Entitlement to Breaks Between Work Periods;

(iv) the No More than Six Consecutive Days Work Entitlement;

(v) the Six and Four Day Weeks’ Entitlement;

(vi) the Consecutive Days’ Off Entitlement;

(vii) the Maximum Days Per Four Week Cycle Entitlement;

(viii) the Entitlement for Employees Who Regularly Work Sundays;

(ix) the Roster Notification Entitlement;

(x) the Span of Ordinary Hours Entitlement;

(xi) the Meal Allowance Entitlement for each of the First and Second Meal;

(xii) the Annual Leave Entitlement?

31    Issues 73 in FWO v Coles asks:

In relation to the contract clauses set out in the particulars under paragraph 12 of the Amended Defence:

(a) Should the clauses be construed as contrary to public policy, void and/or otherwise of no effect?

(b) If no to (a):

(i) can payments of annual salary be used to absorb all or any entitlements arising under the Retail Award?

(ii) if so, over what period may set off be applied (such as annual or monthly)?

(c) If yes to (b)(i), how should the payments made to a Salaried Employee be allocated to particular Retail Award entitlements?

32    The parties were unable to agree on the exact wording of Issue 73A. Coles articulated the issue as follows:

Where a Salaried Employee did not have a written contract of employment, did their implied or inferred contract of employment contain terms which enabled Coles to set off their entitlements arising under the Retail Award?

33    The FWO instead phrased it as follows:

Where a Sample Salaried Employee did not have a written contract of employment, did their implied or inferred oral contract of employment contain implied terms which enabled Coles to set off their entitlements arising under the Retail Award?

34    This inability to agree even simple matters mars much of this litigation. It is not necessary to resolve it.

35    The Baker parties adopted the set off clause issue (Issue 46) from FWO v Woolworths. Woolworths adopted its submissions from that proceeding on this issue and Mr Baker adopted the submissions of the FWO.

36    Issue 35 in Pabalan is directed to the efficacy of set-off clauses and was expressed to be similar to Issue 73 in FWO v Coles. On this issue Coles adopted its submissions in FWO v Coles. Ms Pabalan accepted in her written submissions that the issue corresponds with Issue 74 in FWO v Coles and adopted the FWO’s submissions in that respect. I will assume this was intended to be a reference not to Issue 74, which was ultimately not pressed by the FWO, but rather to Issue 73.

37    In summary my conclusions are that the clauses are only effective to discharge obligations under the Award within a single pay period.

A.1 FWO v Woolworths

38    All of Woolworths’ salaried employees were given annual salaries. These salaries were provided for by a template letter of offer and employment contract (together, ‘the contract’) various versions of which Woolworths tendered. The salaries consisted of a base salary, a car allowance (where applicable) and superannuation. These three annual amounts were collectively referred to in the contract as the ‘Remuneration’. Under the Award, Woolworths was obliged to pay its employees on either a weekly or fortnightly basis: cl 23.1. Under the contract, Woolworths opted for a fortnightly rather than weekly payment cadence. In particular, the contract provided that the base salary was to be paid by fortnightly instalments as was the car allowance. It is unclear how often superannuation was paid but I will assume for present purposes that it was paid fortnightly as well.

39    Although the contract fixed an annual remuneration this annual fixing was not associated with any direct payment obligation of Woolworths. The actual payment rights and obligations of the parties were derived from the provisions of the contract and the Award requiring payments to be made to the employee on a fortnightly basis. So understood, the contractual stipulation of an annual remuneration was a number from which the actual payment rights and obligations of the parties were derived by dividing that number by 26. As will be seen, this is conceptually significant. In particular, there was no obligation to pay the annual Remuneration but rather only an obligation to pay one twenty-sixth of the annual Remuneration each fortnight.

40    This fortnightly amount was in excess of the minimum wage due to the employees for working ordinary hours under the Award in each fortnight. The present difficulty arises from the inclusion of a clause in the contract which sought to discharge Woolworths’ obligations to make payments under the Award by reference to the non-payable annual Remuneration rather than by reference to the payable (and paid) fortnightly remuneration. This was clause 6:

6)    Minimum entitlements

If at any time you are entitled to any payment or other benefit as a consequence of the Employment (whether under legislation, an industrial instrument, the National Employment Standards or otherwise) including, without limitation, minimum hourly rates, penalties, overtime, allowances such as meal allowances and loadings such as annual leave loading (Minimum Entitlements), you agree that:

(a)     as far as possible, the Remuneration and other benefits under this Agreement will be in satisfaction of the Minimum Entitlements over a 26 week period calculated at the applicable minimum rate: and

(b)    the Minimum Entitlements do not form part of this Agreement.

As part of this, your Base Salary and any allowance outlined in your Letter of Offer includes payment for:

(a)    all hours you work over a 26 week period (whether part of your ordinary working hours or not): and

(b)    public holidays and substitute public holidays (whether you work on those days or not).

41    It is to be noted that the first sub-clause (a) is expressed only to operate ‘as far as possible’.

42    It is not in dispute that a payment made by an employer may simultaneously discharge both:

(a)    an obligation arising under the terms of a contract of employment; and

(b)    an obligation accruing under the terms of an industrial instrument such as an award.

43    The principle is uncontroversial: see Wardman v Macquarie Bank Ltd [2023] FCAFC 13; 322 IR 278 (‘Wardman’) at [10] per Bromberg J and [126]-[130] per Wheelahan J; WorkPac Pty Ltd v Rossato [2020] FCAFC 84; 278 FCR 179 (‘Rossato’) at [913]-[921] per White J and [1007]-[1021] per Wheelahan J (not disturbed on appeal). A straightforward example of the principle is afforded in a case where a contract of employment expressly provides that the monthly payment of a contractual salary is also to discharge the employer’s obligation to pay the minimum amount due under an industrial instrument each month (where the salary equals or exceeds that minimum amount). Although the parties exchanged somewhat unfocussed but very extensive submissions about this principle, there was it turns out little disagreement between them about it.

44    The parties also referred very extensively to the two limitations on this principle which are set out in Poletti v Ecob (No 2) (1989) 31 IR 321 (‘Poletti v Ecob’) at 333 per Keely, Ryan and Gray JJ and summarised in Linkhill Pty Ltd v Director, Office of the Fair Work Building Industry Inspectorate [2015] FCAFC 99; 240 FCR 578 (‘Linkhill’) at [40]-[67] per North and Bromberg JJ. The first applies where a payment by an employer to an employee is made pursuant to a contractual obligation which the parties have agreed is for a specific purpose extraneous to the payment of award entitlements. The second limitation, which can be termed the ‘designation’ limitation, applies where a payment (whether paid under a contract or not) is designated as being for a purpose other than the satisfaction of award entitlements. Neither is immediately relevant given that in this case there is an express contractual attribution.

45    That attribution is contained in cl 6 of the contract. Its evident intent, if perhaps not its precise form, is to permit Woolworths to pool its excess Award payments over a six month period and then to deem that pool to be in ‘satisfaction’ of Woolworths’ obligation to make payments under the Award. The Award payments in question are those for minimum hourly rates together with other entitlements such as the payment of penalties, overtime, allowances and loadings.

46    The FWO submits that cl 6 is not capable of any lawful operation because of s 323(1) of the FW Act:

323    Method and frequency of payment

(1)    An employer must pay an employee amounts payable to the employee in relation to the performance of work:

(a)    in full (except as provided by section 324); and

(b)    in money by one, or a combination, of the methods referred to in subsection (2); and

(c)    at least monthly.

47    Also relevant is s 324(1):

324    Permitted deductions

(1)    An employer may deduct an amount from an amount payable to an employee in accordance with subsection 323(1) if:

(a)    the deduction is authorised in writing by the employee and is principally for the employee’s benefit; or

(b)    the deduction is authorised by the employee in accordance with an enterprise agreement; or

(c)    the deduction is authorised by or under a modern award or an FWC order; or

(d)    the deduction is authorised by or under a law of the Commonwealth, a State or a Territory, or an order of a court.

48    Section 323(1) refers to payment in full at least monthly. In this case, the parties have agreed the selection of a shorter pay period of a fortnight. By s 323(1)(a) Woolworths must pay each employee the amounts payable in relation to their performance of work in full.

49    Whether s 323(1)(a) prevents attribution of over-award payments across pay periods is a difficult question which has not been previously decided. Contrary to the submissions of both parties there is nothing straightforward about it. Woolworths submitted (at [419]) that the decision of the Full Bench of the Fair Work Commission in Re Annualised Wage Arrangements [2018] FWCFB 154; 274 IR 29 at [102] shows that a properly drafted annualised salary arrangement can be effective to allow set-off over the course of the year. I do not agree. What the Commission said was this:

Of course it is not necessary to have an annualised wage provision in a modern award in order for an employer to be able to pay an employee to whom the award applies an annualised salary that compensates for or “buys out” various identified award entitlements. The principles by which this might be done were stated in the Federal Court Full Court decision in Poletti v Ecob (No 2) and subsequently affirmed in the Full Court decisions in Australian & New Zealand Banking Group Ltd v Finance Sector Union of Australia and Linkhill Pty Ltd v Director, Offıce of the Fair Work Building Industry Inspectorate. In short, under a contract of employment the employer and employee may agree that the salary payable under the contract has the purpose of satisfying the obligation to pay identified award entitlements (such as, for example, base wages, overtime rates, shifts and weekend penalty rates, allowances and annual leave loading). The payment of salary pursuant to such a contract of employment may be relied upon by the employer as satisfying in part or whole any claim by the employee for under-payment of the identified award entitlements. However this means of paying an annualised wage to an employee to whom a modern award applies is not entirely free from legal difficulty. If there is a lack of a “close correlation between the nature of the contractual obligation and the nature of the award obligations”, then payment of the salary may not satisfy the relevant award entitlements. Further, the fact that an annual salary provided for in a contract of employment may, over the course of a year, equal or exceed identified award entitlements such as to discharge payment of them may, arguably, not amount to compliance with an award requirement that pay entitlements are required to be made to the employee within a specified pay period. Issues such as these may make the payment of a salary pursuant to an annualised wages provision in a modern award a more desirable and legally certain option.

(footnotes omitted)

50    What this passage shows is that there are real doubts as to whether what has been sought to be done in this case can be done. The last sentence shows that the Commission’s proposed solution is not the one misattributed to it by Woolworths in its submission – namely a well-drafted annual salary provision – but rather the insertion in an award of a provision authorising the payment of a salary pursuant to an annualised wages provision. I do not regard the Commission’s decision as assisting either party in the resolution of the question but it does underscore that the problem at hand is of some difficulty.

51    Returning to the issue, in each fortnight, Woolworths has two sets of payment obligations. The first consists of its obligation to pay a fortnightly instalment of the annual Remuneration. The second consists of its obligation to pay amounts due under the Award each fortnight.

52    As a matter of contract law, there would be no difficulty with an attribution clause which provided that payment by Woolworths of the fortnightly amounts of the annual Remuneration was to be in complete satisfaction of its obligations to make fortnightly payments under the Award. This would be so even if the amount of the fortnightly Award payments exceeded in a given fortnight the fortnightly amount of annual Remuneration. At common law, nothing prevents a creditor and a debtor from agreeing that the payment of a smaller debt will also discharge a larger debt.

53    The position is more complex in an employment context governed by s 323(1) for it is not possible for an employer and employee to contract out of obligations imposed upon an employer by an industrial instrument such as the Award. The reasons for this are perhaps less than obvious but they are provided by s 323(1)(a): amounts which are payable to an employee are to be paid in full. Amounts may be payable to an employee by reason of a contractual entitlement but they may also be payable by reason of an industrial instrument. A payment under a contractual provision which purported to discharge the employer’s obligation to pay an employee’s entitlements under an industrial instrument but which was less than those entitlements would fall foul of s 323(1)(a). It would result in the award entitlements being paid less than in full.

54    However, I agree with Woolworths that s 323(1) is not the source of award entitlements. The relevant award is. Section 323(1) governs only the manner in which those pre-existing entitlements are to be paid. A failure to meet the methodological prescription in s 323(1)(a) that payment be ‘in full’ constitutes a contravention of the provision but does not preclude a partial payment from discharging, as far as it can, award entitlements. It follows that it is not an invalidating characteristic of an attribution clause in an employment situation that payments made under it which purport to discharge award entitlements may not completely discharge those entitlements.

55    In saying that, I reject Woolworth’s submission that s 323(1) is shown by secondary materials to be concerned to prevent payments in kind in such a way as to limit the meaning of ‘in full’ in s 323(1)(a). Resort to the passages cited by Woolworths of the Explanatory Memorandum which accompanied the Fair Work Bill 2009 (Cth) shows that the avoidance of payments in kind was the purpose of s 323(1)(b), not s 323(1)(a).

56    Notwithstanding that s 323(1) merely regulates pre-existing obligations, it is instructive that the provision requires an employer to ‘pay’ those obligations. This is reflected in the language of cll 23.1 and 29.2 of the Award, which respectively require that wages and overtime be ‘paid’. The monetary obligations arising under the Award are therefore obligations to pay and may only be discharged by a payment.

57    Clause 6 of the contract does not operate by reference to a payment. Rather, it provides that ‘the Remuneration and other benefits under this Agreement’ will be ‘in satisfaction’ of Woolworths’ obligation to make payments under the Award. The term ‘Remuneration’ is defined in the agreement to consist of the three annual elements I have mentioned: a base salary, a car allowance and superannuation. As such, the Remuneration as defined is an annual sum of money. Whilst contractually and by reason of the Award the Remuneration is to be paid fortnightly, the fortnightly payments are not what cl 6 seeks to operate upon.

58    Rather than providing that ‘the payment of the Remuneration and other benefits will be in satisfaction’ of the Award payments, cl 6 provides only that ‘the Remuneration and other benefits under this Agreement will be in satisfaction’ of the Award payments. If it had said ‘the payment of the Remuneration and other benefits’ then this would necessarily have linked the obligation to make those fortnightly payments to monetary obligations falling due in the same fortnight under the Award.

59    That it does not do so is probably not accidental. It is evident that the drafter of cl 6 had in mind, at least ‘as far as possible’, pooling over-Award payments across a six month period and then providing for the acquittal of award payment obligations across the same period. Such a pooling arrangement cannot operate if the concept of payment is allowed to intrude. If the fortnightly payment obligation is referred to instead then the 26 week pool is broken into 13 self-contained segments and pooling cannot occur outside each fortnight.

60    As it stands, cl 6 is therefore a most curious provision. It purports to discharge monetary obligations arising under the Award by reference to a sum calculated across a 26 week period which is never payable and which is itself never paid. Subject to questions of contractual certainty (to which I will briefly return), I do in principle accept that this could be done as a matter of contract law. A party may discharge a monetary obligation by any agreed means including, for example, by tender of performance. If that be so, I do not see why the parties could not also agree that a monetary obligation might be discharged because of the existence of an accounting abstraction rather than some other payment obligation. Here the accounting abstraction is the sum of the 13 fortnightly payments which occur over the 26 weeks referred to in cl 6. It is an accounting abstraction because there is no obligation to pay that sum under the contract or the Award. Its abstract nature is underscored by the fact that the notional sum consists of 13 fortnightly payments which have either already been paid or have not yet been paid. The abstract nature of this accounting device shows why it cannot be the subject of a payment obligation for it would be meaningless to speak of an obligation to pay such an abstraction. Even so, as I have said, as a matter of contract law the parties could agree that such a notional pool could be used to discharge some other payment obligation (in the same way that a non-monetary act such as tender of performance may by agreement discharge a monetary obligation).

61    However, whether that be so as a matter of contract law or not, I do not accept that an accounting abstraction can be used to discharge monetary obligations imposed by an industrial instrument. The Award requires an employer to ‘pay’ the amounts which are due and the existence of an accounting abstraction is not a payment.

62    Thus, the vice of cl 6 is that it does not identify a payment which can actually operate to discharge Woolworths’ obligations to make payments in full of the employee’s entitlements under the Award. This is not to conclude that an attribution clause cannot work in an employment context. Rather, it is to conclude that any such attribution clause can only discharge award payment obligations with actual payments. Since cl 6 does not identify a payment to discharge the Award payment obligations but rather a pool which is not payable and is not paid, it cannot discharge the payment obligations imposed by the Award.

63    If the matter is left on this basis, then cl 6 does not operate in any case to discharge Woolworths’ obligations to make payments under the Award. I think it unlikely that either the employees or Woolworths understood that the bargain they were agreeing to was that Woolworths would pay the employees an annual salary, car allowance and superannuation and then, on top of that, all of the employees’ entitlements under the Award. That is an absurd situation which the parties can hardly be taken to have intended.

64    To avoid this outcome, it is necessary to read the reference to ‘the Remuneration and other benefits under this Agreement’ as ‘the payment of the Remuneration and other benefits under this Agreement’. So construed cl 6 refers to fortnightly payments of the Remuneration and, as such, can lawfully operate as an attribution clause. Each fortnightly payment of the Remuneration will discharge an equal amount of any obligations falling due in that fortnight under the Award.

65    That construction renders ineffectual the reference in cl 6 to a 26 week period. I do not think that this is a problem. Clause 6 is qualified, as I have noted, by the words ‘as far as possible’. For the reasons I have given, six monthly pooling is not possible (at least in the present circumstances) but fortnightly pooling is. The only possible operation of cl 6 is therefore to set off Woolworths’ payment obligations under the Award on a fortnightly basis. There is no need to read down the reference to 26 weeks to two weeks because, on the above reading of the clause, the words ‘payment of’ already have the effect of pooling across each fortnight. The reference to 26 weeks can simply be disregarded.

66    Whilst it is not necessary to form a view about this for the purposes of this litigation, it is doubtful in my mind that cl 6 could ever be redrawn to achieve a six monthly pooling. It is unlikely that payments which have occurred in past pay periods can be characterised as payments for the purposes of the Award. For the same reason, I think it unlikely that payments in the future can be characterised as payments in the present pay period either. If this be correct, then a six monthly pooling operation for cl 6 cannot be resurrected by careful drafting.

67    I have mentioned above the problem of contractual certainty. Without elaborating on this in any detail, the problem arises because what the employer is obliged to pay in any pay period cannot, in many cases, be known until the end of the six month period. Given the way I believe cl 6 must be construed however this problem does not arise.

68    I have been unable to identify an authority which directly considers whether an employer is prevented from setting off against its obligations under an award in one period the amount of over-award payments in the past or which may yet happen. Goldberg J refused an attempt by an employer to set off against award underpayments in some weeks the amounts paid to the employees in other weeks which exceeded the award entitlements: Textile, Clothing and Footwear Union of Australia v Givoni Pty Ltd [2002] FCA 1406; 121 IR 250 (‘Givoni’) at [60]-[65]. However, his Honour’s reasoning was based on the application of the designation limitation in Poletti v Ecob rather than the possibility of set-off between pay periods. As such, I do not think that the decision either aids or detracts from the conclusion I have reached.

69    Both parties also suggested that Fair Work Ombudsman v Transpetrol TM AS [2019] FCA 400 (‘Transpetrol’) is relevant to this point. The employees in that case, crew members on an oil and chemical tanker, were paid a salary by Transpetrol according to a uniform scale irrespective of which nation’s law governed their employment contract. To cater for discrepancies in different national laws and for other requirements peculiar to maritime employment, the gross sum for which that salary scale provided was in excess of that required by the relevant Australian award. Rares J accepted that Transpetrol could apply the excess to set off (in part) certain overtime and ordinary wage entitlements under the award which the FWO alleged had not been fully paid.

70    Two points should be noted about Transpetrol. First, it is not at all clear that the result in the case was that amounts paid in one period could be used to set off award obligations in a different period. If the crew members’ salary (including the excess) was paid at regular intervals, as would assumedly have been the case, then the overtime and ordinary wage entitlements said to have been underpaid may have arisen in the same period as the salary payment such that there would be no set-off between pay periods. Secondly, the contest between the parties was confined to whether Transpetrol had designated the excess to purposes other than satisfying any entitlement to wage rates and overtime payments so as to engage the designation limitation. As such, Rares J was not confronted with any argument as to the possibility of set-off between pay periods and I do not consider the decision to say anything on that point.

71    It is then necessary to deal with the Full Court’s decision in Wardman. There were a number of issues in the case one of which related to annual leave loading. Clause 24.3 of the award in that case provided that during a period of annual leave an employee would receive a 17.5% loading, or the relevant weekend penalty rates whichever was the greater, calculated on the relevant rate of wage. A number of employees had brought proceedings against the respondent bank. At [57] Wheelahan J noted that a global approach had been taken to the position of the various employees which had resulted in ‘cost and efficiency benefits’ in the litigation but that by taking this global approach ‘individual employees may have made some compromises in the way their claims were advanced’. The employees had been paid commissions on top of their base salary. The main issue was whether these commissions discharged the bank’s obligations under the award including the annual leave loading. The trial judge had concluded that the payments did not include payments on account of leave, annual leave or public holidays. There were 48 employment contracts involved in the appeal. All but three of these did not involve a contractual attribution clause and are not relevant for present purposes. However, in three cases – Haslem, McKenzie and Ryan – there was a contractual attribution clause in these terms:

You acknowledge and agree that payments made in satisfaction of your remuneration and other benefits provided for in this Agreement (including the annual salary component of your BCR) are all-inclusive over-award payments and will be set off against any payment or benefit to which you may become entitled as a consequence of your employment (whether under legislation, an award or another industrial instrument) including but not limited to minimum hourly rates, allowances, overtime and penalty rates and loadings.

72    Wheelahan J accepted at [185] that this clause was effective in their cases to discharge the bank’s obligation to pay the annual leave loading. In relation to these three employees both Bromberg and Snaden JJ agreed with Wheelahan J: [47], [287]. Wheelahan J then addressed the apparent temporal aspect of the annual leave loading to observe that it was not contended by the bank that it had paid a higher wage when the employee was on annual leave. Rather, what appears to have happened is that the same base salary was paid throughout the year so that the obligation to pay the annual leave loading was discharged by the making of a payment in all 52 weeks. What his Honour said at [187]-[188] was this:

First, I recognise that the Bank did not seek to argue that Haslem, Mackenzie, or Ryan received additional remuneration or any higher rate of pay whilst on annual leave, as compared to other periods throughout the year. This may appear to be at odds with the temporal nature of the obligation in cl 24.3 of the Award to pay the loading “[d]uring a period of annual leave.” But there is no reason why the Bank and each of the three employees, under the terms of their respective employment agreements, could not allocate the monthly salary in satisfaction of any monetary entitlements owing to the employees under the Award, if and when those entitlements arose. Provided that the fixed monthly payments were, throughout all relevant pay periods, sufficient to discharge the Bank’s statutory obligations, it is of no consequence that the exact amounts owing pursuant to those obligations may have risen or fallen from time to time (for example, during a period when an employee took annual leave).

Secondly, it is worth restating that it was no part of the case put by any of the employees, at first instance or before this Court, that the monthly salary component of the BCR fell below the minimum rates of pay that they were entitled to receive under the Award, with or without the additional 17.5% loading annual leave loading. I have concluded that the Bank could rely on the monthly salary component of the BCR in satisfaction of its Award obligations to pay the employees a minimum salary or wage. In relation to Haslem, Mackenzie, and Ryan, I have also concluded that the Bank could rely on the payments in satisfaction of its Award obligation to pay annual leave loading. It is of course possible that, when one examines the actual cash amount that each employee was paid as the salary component of his or her BCR each month, some employees may have received less than what they were owed under the Award. However, that case was not put by the employees. It is not open to this Court, on the material before it, to make such a finding. This may be an example of a pragmatic forensic choice made by the employees in pursuing a global approach to this litigation, to which I referred at [57] above.

73    What follows from this is that his Honour was not confronted with the temporal difficulty which arises in the present case and, in particular, the question of whether the discharge of a payment obligation imposed by an award in one period may be discharged by something which is not a payment such as a pool across a period. I therefore do not think that his Honour’s reasoning has anything to say about the present question and I do not think the holding in Wardman stands in the way of the conclusion I have reached.

74    There are a large number of decisions dealing with set-off arrangements in an employment context: see Ray v Radano [1967] AR (NSW) 471 (‘Ray v Radano’); Poletti v Ecob; Australia and New Zealand Banking Group Limited v Finance Sector Union of Australia [2001] FCA 1785; 111 IR 227 (‘ANZ v FSUA’); James Turner Roofing Pty Ltd v Peters [2003] WASCA 28; 132 IR 122 (‘James Turner Roofing’); Lynch v Buckley Sawmills Pty Ltd [1984] FCA 348 (‘Lynch v Buckley Sawmills’); 3 FCR 503; Linkhill; Transpetrol; Wardman; Rossato. I have not found that any of these decisions throw light on the present question.

75    In those circumstances, I conclude that cl 6 must be read so that it applies within a fortnightly pay period.

Other arguments

76    Woolworths advanced some other submissions on this topic. I reject each of them. First, as I have indicated already I do not accept that the secondary materials about s 323(1) show that the reference to payment ‘in full’ in s 323(1)(a) was directed to preventing payments in kind. Those materials show that this was the purpose of s 323(1)(b) not s 323(1)(a).

77    Secondly, I do not agree that the decision in Coote v Mainline Access Pty Ltd (No 3) [2019] FCCA 383; 344 FLR 1 at [42] carries the implication that Woolworths suggests at [366] of its submissions.

78    Thirdly, although as noted above s 323(1) regulates how pre-existing monetary obligations are to be discharged, it probably does not follow, as Woolworths submits, that an underpayment by an employer cannot constitute a contravention of s 323(1). However, it is not necessary to determine the answer to this question since the present issue is not whether Woolworths has contravened s 323(1).

79    Fourthly, Woolworths makes a more substantial point when it submits that the terms of the Award recognise that additional payments under the Award may become due on the occurrence of events which are outside of a pay period. For example, cll 28.3 to 28.5 make provision for particular roster arrangements to be implemented in each shop including as to the working of 19 days in each four week cycle. An employee may be entitled to overtime when required to work outside those roster conditions: cl 29.2. The argument then is that it cannot be known in advance when the entitlement to overtime accrues. Since that cannot be known it cannot be the case that Award entitlements must be paid in a particular pay period since the pay period in which the entitlement accrues is itself not known. However, I do not consider that this is a problem. At some point the entitlement accrues. No obligation to pay the entitlement exists before it has accrued and I do not see why the obligation to pay the entitlement would not arise in the pay period in which it accrues. Put another way, difficulty in identifying when particular entitlements accrue is not a reason for not construing the payment obligations under the Award the way I would. It is, rather, the familiar problem of determining when a given entitlement accrues.

80    Fifthly, Woolworths makes an allied submission that there are some award entitlements which only accrue on an annual basis. An obvious one is the payment of an annual leave loading. However, I do not see that there is a problem here either. Woolworths is obliged to pay a loading of 17.5% on annual leave which has accrued and which is taken: cl 32.3(a). The loading is only payable ‘during a period of annual leave’. Consequently, I do not see that this is an example of an annual entitlement which accrues at a different time to a payment period. The obligation to pay only arises in those pay periods where the employee is taking annual leave.

Outcome on Issue 46

81    If construed literally, cl 6 is ineffective to bring about a payment of the employees’ entitlements since the pool it refers to is not a payment. ‘The Remuneration’ should be construed to mean ‘the payment of the Remuneration’ and the six month machinery should be disregarded. It follows from what I have said that cl 6 is not contrary to public policy, void or otherwise of no effect. It has the effect that each fortnightly payment of the Remuneration by Woolworths discharges an equal amount of any obligations falling due in that fortnight under the Award.

A.2 FWO v Coles

82    The wording of the corresponding clause in FWO v Coles was not identical to the wording in FWO v Woolworths. There seem to have been five types of clauses as set out in Coles’ closing submissions at [764]:

(1)    Your cash salary is in satisfaction of all entitlements otherwise payable to you under any relevant industrial instrument. The terms of any relevant industrial instrument are not terms of your contract of employment.

(2)    Your cash salary includes compensation for all entitlements, benefits or payments that might otherwise be due under any industrial instrument.

(3)    In consideration of the nature of the hours your role requires you to work, you will also be paid an additional amount of ${insert amount} per annum (‘additional compensation’). This additional compensation will be paid in equal instalments together with the cash salary component of your TFC. Your total TFC (including statutory superannuation) and additional compensation is in full satisfaction of all monetary benefits which might otherwise be payable under the General Retail Industry Award 2010, including minimum wages, overtime, penalties, loadings and allowances.

(4)    Your total TFC (including statutory superannuation) is in full satisfaction of all monetary benefits which might otherwise be payable under the General Retail Industry Award 2010, including minimum wages, overtime, penalties, loadings and allowances.

(5)    Your salary includes compensation for all entitlements, benefits or payments that might otherwise be due under any industrial instrument that may apply to your employment including but not limited to:

i.    overtime;

ii.    penalty payments for out of hours work;

iii.    shift loadings; and

iv.    any other loadings, penalties, overtime or allowances.

Accordingly, you will not be paid any special rates or allowances for working particular times or under particular conditions unless otherwise agreed in writing.

83    In relation to two of the Salaried Employees, it appears that there was no written contract. Issue 73A involves Coles’ contention that a term was implied into these two contracts of employment along the same lines as the clauses I have just outlined above. Such a term is not so obvious that it goes without saying and on that account alone would not be implied: BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266. Coles’ submissions to the contrary are rejected. The FWO submitted that absent such an implied term the payments of salary which were made by Coles in the discharge of its contractual obligations to pay a salary under these unwritten agreements could not discharge its obligations under the Award. However, it is not necessary that there be an attribution clause, whether express or implied, in order that a payment made under a contractual obligation simultaneously discharge an award obligation. So much is clear from Wardman where most of the contracts under consideration did not contain an express attribution clause but it was nevertheless held that the monthly payments of salary under the contract were sufficiently correlated with the award obligation to pay salary or wages as to satisfy that obligation: [44] per Bromberg J, [162] per Wheelahan J.

84    Rather, a touchstone commonly deployed for determining whether a payment under a contractual obligation will simultaneously discharge an award obligation (absent an express attribution clause like that in FWO v Woolworths) is whether there is a coincidence of purpose or at least a close correlation between the nature of the two obligations: ANZ v FSUA at [47], [51]-[52] per Black CJ, Wilcox and von Doussa JJ; Linkhill at [98] per North and Bromberg JJ; Wardman at [131] per Wheelahan J. There is some difficulty in answering that question where the contractual obligation is, as here, unwritten. Nonetheless I would conclude that there is a close correlation (as in Wardman) between the payments of salary by Coles and Coles’ obligation under the Award to pay the minimum wages on the working of ordinary hours. Thus, the payment of the salaries discharged the minimum wages due under the Award. In the absence of any evidence from Coles as to what it intended by those payments, I am unable to see how they can plausibly be seen as being connected to any of Coles’ other obligations under the Award.

85    Returning to the five exemplar clauses, I accept that as in Wardman each of these clauses is drafted in such a way as to capture the relevant obligations that Coles incurred under the Award to make payments. For the reasons I have given in FWO v Woolworths I do not accept that it is possible to discharge Coles’ obligation to pay the entitlements falling due under the Award by anything other than an act of payment (rather than, for example, the existence of an accounting abstraction such as a pool over a six month period). As I have explained above, I accept that in an employment context a properly drafted set-off clause may provide that payment of a contractual obligation in a pay period may discharge a payment obligation arising under an industrial instrument in the same pay period. When this occurs a single payment discharges the two distinct monetary obligations. However, the obligations arising under the Award can only be discharged by a payment and that necessitates that the payment happen in the same pay period.

86    In this case, Coles has approached the calculation of its employees’ entitlements under the Award on the basis that the five different clauses could have the result of discharging its obligations to make payments under the Award. Whilst I would accept that the clauses may have this effect within a pay period, they cannot have such an effect where the payment sought to be set off falls in a different pay period. Coles drew my attention to a series of decisions in which the possibility that set-off outside pay periods might not be available was countenanced: Ray v Radano at 478 per Sheldon J; Lynch v Buckley Sawmills at 509 per Keely J; Givoni at [35] per Goldberg J; James Turner Roofing at [21] and [45] per Anderson J. It also drew my attention to two cases where an approach appears to have been taken that set-off outside a pay period was possible: TransAdelaide v Leddy (No 2) (1998) 71 SASR 413 (‘TransAdelaide’) at 432-433 per Doyle CJ (with whom Lander J agreed at 433) and Transpetrol at [114]-[117] per Rares J. In none of these decisions was the argument put that award entitlements can be discharged by something which is not a payment in the relevant payment period. I thus do not think that these cases throw any real light on the present issue one way or the other.

87    In Woolworths’ case it was possible to reinterpret the clause so as to avoid conflict with s 323(1). I see no reason why a similar approach cannot be taken here, by reading the references to ‘your cash salary’ (in the first and second clause), ‘your TFC’ (in the third clause), ‘your total TFC’ (in the fourth clause) and ‘your salary’ (in the fifth clause) to be preceded by ‘payment of’. This has the effect, as in Woolworths’ case, of tying the set-off clauses to Coles’ payment period so as to give the clause a lawful operation as an attribution clause.

88    By contrast to the clause in FWO v Woolworths, each of the five clauses relied upon by Coles purports expressly to satisfy ‘all’ entitlements (and, in the case of the third and fourth clauses, to satisfy such entitlements ‘in full’). This might be taken to evidence an intention that the clause should only operate if it can wholly satisfy all award entitlements. If the clauses were to fail on this basis, the principles stated above in respect of the unwritten contracts would apply with the result that Coles’ salary payments operated only to discharge the minimum wages due under the Award. It is unnecessary to decide this issue, however, because the FWO submitted that the contractual payments by Coles and Woolworths ‘are not to be discarded in whole’ and can be accounted for in part discharge of its Award obligations.

89    I therefore find that as in FWO v Woolworths the set-off clauses in FWO v Coles lawfully operate within a payment period. Each salary payment will discharge an equal amount of any obligations falling due in that payment period under the Award.

PART B: RECORD-KEEPING AND SECTION 557C

90    The FW Act requires employers to keep certain records relating to their employees. The FWO alleges that Woolworths and Coles have contravened this requirement and seeks the imposition of a civil penalty. The FWO also alleges that after 15 September 2017, s 557C operates so that, in those cases where Woolworths and Coles have failed to keep the employment records, they are required to disprove the FWO’s allegations of contravention.

91    Each proceeding raised issues in respect of the record-keeping obligations and s 557C. In FWO v Woolworths, these were Issues 37 to 40 which were expressed by the parties in these terms:

Issue 37

Do the record-keeping obligations in reg 3.33 of the FW Regulations apply if an employee is paid an ‘all-inclusive salary’?

Issue 38

Are the record-keeping obligations in reg 3.34 satisfied when an employer has kept a record of the rostered and worked hours of an employee who is paid an ‘all-inclusive salary’?

Issue 39

If the FWO establishes that the record-keeping obligations in regs 3.33 and 3.34 of the FW Regulations have not been met by Woolworths during the period 15 September 2017 to 30 September 2019, then upon the proper construction of s.557C of the FW Act, does Woolworths have the burden of disproving:

(a) the whole of each of the allegations of contravention in Section E of the FASOC for alleged underpayments in that period; or

(b) only the factual allegations that the Calculation Employees had worked the alleged hours of work in Section E of the FASOC and the relevant annexures, giving rise to the alleged underpayments?

Issue 40

Does Woolworths bear the onus of disproving any of the factual allegations in E.1 to E.13 of the FASOC with respect to the alleged contraventions concerning hours worked by Salaried Employees if the Court finds that Woolworths has not kept records as required by reg 3.33 and reg 3.34 of the FW Regulations?

92    The parties in Baker adopted Issues 38 and 40 from the FWO v Woolworths. Issue 13 in Baker set out below was expressed to be a ‘unique’ issue but it bears substantive similarity to Issue 39 in FWO v Woolworths:

Issue 13

If the Applicants establish that the record-keeping obligations in reg 3.34 of the FW Regulations have not been met by Woolworths during the Calculation Period, then upon the proper construction of s.557C of the FW Act, does Woolworths have the burden of disproving:

(a) the whole of each of the allegations of contravention in paragraphs 19 to 40 of the FASOC; or

(b) only the part of the allegations that relate to the number of hours worked and when those hours were worked.

93    A further issue was also raised in Baker:

Issue 12

If the Respondents were required to make and keep records of overtime hours actually worked by an employee, then did the Respondents' direction to each employee to use a clock in/clock out system to record their hours of work satisfy the requirement to make records of overtime hours actually worked by each employee in the form prescribed?

94    In FWO v Coles, the relevant issues were Issues 1 to 6(a) which were expressed by the parties in these terms:

Issue 1

Do the record-keeping obligations in s 535(1) of the FW Act and regs 3.33 and 3.34 of the FW Regulations apply to circumstances where a Salaried Employee is paid an annual salary on an ‘all-inclusive basis’, or an ‘all inclusive salary’?

Issue 2

(a). Is the effect of a contractual set off clause allowing payment of an annual salary on an all inclusive basis that a Salaried Employee is not ‘entitled’ to be paid any loading, penalty rate, any other monetary allowance or separately identifiable entitlement for the purpose of reg 3.33, meaning that no record is required to be kept under reg 3.33 for that Salaried Employee?

(b) Does a contractual set off clause allowing payment of an annual salary on an all-inclusive basis mean that no penalty rate or loading (however described) ‘must be paid’ for overtime hours actually worked by the Salaried Employee, meaning no record is required to be kept under reg 3.34 for that Salaried Employee (thus excluding the operation of that regulation)?

Issue 3

If the Employer was required under regs 3.33 or 3.34 to keep a record and failed to do so, does s 557C of the FW Act mean that the employer then bears the burden of disproving an allegation that an employee is entitled to payment for an entitlement to which a failure to keep the record applied?

Issue 4

Does s 557C apply only to each particular allegation in respect of which a failure to make and keep a record is proven?

If yes, then:

(a) was Coles required to make and keep a record in relation to the particular matter alleged in relation to the particular employee?

(b) did Coles fail to make and keep a record in relation to that particular matter in relation to the particular employee?

Issue 5

(a) Did the employer have a reasonable excuse within the meaning of s 557C(2) for failing to comply with s 557C(1)(b), such that s 557C(1) does not apply?

(b) If yes to (a), for what period did the reasonable excuse apply?

Issue 6

(a) If reg 3.34 does apply to the Salaried Employees, has the employer satisfied its obligations to keep a record, which specifies:

(i) the number of overtime hours worked by the Salaried Employee each day (or any day); or

(ii) when the Salaried Employee started and ceased working overtime hours each day (or any day);

in circumstances where it has kept a record of the roster and clocking data for the hours worked by a Salaried Employee?

95    Issues 2, 3, 5 and 6 in Pabalan were acknowledged to be equivalent to Issues 2(b), 6(a), 4, and 5 in FWO v Coles. Issues 1 and 4 in Pabalan set out below were expressed to be similar but not identical to Issues 1 and 3 in FWO v Coles:

Issue 1

Do the record-keeping obligations in reg 3.34 of the Fair Work Regulations 2009 (Cth) (Regulations) apply to circumstances where an employee is paid an annual salary on an “all-inclusive basis”, or an “all-inclusive salary”?

Issue 4

If the employer was required under reg 3.34 to keep a record and failed to do so, does s 557C of the FW Act mean that the employer then bears the burden of disproving an allegation that an employee is entitled to payment for an entitlement to which a failure to keep the record applied?

96    Where there was overlap with the regulatory proceedings in respect of these issues, Woolworths and Coles adopted their submissions in that proceeding and Mr Baker and Ms Pabalan adopted the submissions made by the FWO.

97    In summary my conclusions are that Woolworths and Coles had record-keeping obligations under reg 3.33 and reg 3.34 in respect of the Calculation Employees and Sample Salaried Employees and did not comply with these obligations. The relevant contractual set-off clauses do not have the effect of relieving these record-keeping obligations and the roster records and clocking data are insufficient to satisfy these record-keeping obligations. In respect of Issue 12 in Baker, a direction to clock-in and clock-out are not in themselves records and so are not capable of satisfying the requirement to make records under reg 3.33 and reg 3.34.

B.1 Requirement to keep records

98    Section 535(1) of the FW Act requires an employer to make, and keep for 7 years, employee records of the kind prescribed by the Fair Work Regulations 2009 (Cth) (the ‘FW Regulations’) in relation to each of its employees. For the purposes of these reasons, there are three relevant record-keeping obligations:

(a)    Accessibility requirement. Regulation 3.31(1)(b) requires records to be in a ‘form that is readily accessible to an inspector’.

(b)    Higher rates of pay requirement. Regulation 3.33(3) requires there to be a record setting out any incentive-based payment, bonus, loading, penalty rate or other monetary allowance an employee is entitled to be paid.

(c)    Overtime hours actually worked requirement. Regulation 3.34 requires that if a penalty rate or loading must be paid for overtime hours actually worked the employer must make and keep a record that specifies either the number of overtime hours worked by the employee during each day or when the employee started and finished working overtime hours.

99    It is convenient to begin with the submissions made in FWO v Woolworths. It is not in dispute that Woolworths did not keep records of any separately identifiable amounts of loadings, penalty rates or other monetary allowances the Calculation Employees were due (i.e. reg 3.33(3)), or of the number of overtime hours they worked or the times at which they started and finished working overtime (i.e. reg 3.34). The FWO therefore submits that Woolworths has failed to comply with reg 3.33(3) and reg 3.34. Since compliance with those regulations is required by s 535(1) it has also on each such occasion contravened that provision. Section 535(1) is a civil penalty provision.

Regulation 3.33(3)

100    Woolworths submits that it has not breached reg 3.33(3) (and hence s 535(1)). It made two points at [733]. First, to conclude that reg 3.33(3) applied would be to ignore the all-inclusive nature of the annual salaries which the Calculation Employees were paid. Secondly, to conclude that reg 3.33(3) was breached would involve an assumption that reg 3.33(3) requires the recording of the entitlements it specifies notwithstanding that such entitlements were not separately stipulated in the employees’ contracts or paid to those employees.

101    I do not accept the first submission. The requirement in reg 3.33(3) to record certain details is enlivened by the employee’s entitlement; that is, where the employee is entitled to be paid one of the entitlements in paragraphs (a) to (e) of reg 3.33(3) the record must have the required details. The form of the payment, such as it being ‘all inclusive’, does not alter that requirement. Additionally, Woolworths adopted at T1273.29 Coles’ submission, which is that the set-off clause in the employment contracts operates so that an employee is not ‘entitled to be paid’ any loading, penalty rate or other monetary allowance and reg 3.33(3) is accordingly not enlivened.

102    I reject that submission. Although I have rejected Woolworths’ contentions about the operation of the set-off clause in the contracts of employment, there can be no escaping that the endpoint of its submissions is that its obligation to pay the employees their remuneration in full each pay period was, in fact, discharged successfully by the set-off clause. Woolworths does not submit that the effect of the set-off clause is to prevent its obligation to pay amounts under the Award from arising in the first place. Rather, its submission is that its obligation to pay has been discharged by the operation of the set-off clause. Although I do not agree that Woolworths’ set-off clause is, in fact, effective to discharge its obligation to make payments under the Award (other than in the same pay period) this does not matter for present purposes. What matters instead is that Woolworths’ obligation to pay is an admitted feature of the landscape which the set-off clause takes as its point of departure. The converse of its obligation to pay is, of course, the employee’s entitlement to be paid which is the concept which is the express subject matter of reg 3.33(3). It follows that even if Woolworths’ set-off clauses were wholly effective (which they are not), they could not have the effect of abnegating Woolworths’ obligations under reg 3.33(3). Since it is enlivened, the record required by reg 3.33(3) therefore needs to set out the details of the employee’s entitlement to be paid any loading, penalty rate or other monetary allowance.

103    Woolworths’ second submission was that reg 3.33(3) does not require the recording of the entitlements it specifies if such entitlements are (a) not separately stipulated in the employees’ contracts or (b) not paid to those employees. As to (a), in effect, this is the same as the first submission. It is not to the point whether the contracts of employment do or do not make stipulation for the payment of loadings, penalty rates or other monetary allowances (of the kind referred to in reg 3.33(3)). If it matters (which it does not), the obligation to pay these sums, at least in this case, derives from the Award. What enlivens the obligation to keep the records referred to in reg 3.33(3) is not some term in a contract but rather the satisfaction of the major premise of the provision. The major premise is that an employee is entitled to be paid a loading, penalty rate or other monetary allowance. The satisfaction of the major premise does not depend on the origin of the employee’s entitlement to be paid or correlatively the origin of the employer’s obligation to pay. Rather it depends only on its own existence.

104    As to (b), this submission exposes the difficulty with Woolworths’ submissions on its set-off clause. Of course, what those submissions seek to show that is that its obligations to pay the entitlements under the Award were met (i.e. paid) by the operation of the set-off clause. Submission (b) now seeks to say that the employees were not in fact paid their entitlements at all. I do not accept that it is open to Woolworths coherently to suggest that it paid the entitlements for the purposes of its set-off clause but did not pay them for the purposes of reg 3.33(3). Even leaving aside coherence difficulties, it would appear that Woolworths’ submission in (b) reduces to no more than the proposition that if an employer does not pay an employee a loading, penalty rate or other monetary allowance which is otherwise due then reg 3.33(3) does not require that a record be kept of that failure. Such a construction would relieve an employer from having to keep records of overtime and other entitlements by the simple expedient of not keeping them. Whilst the meaning of Commonwealth legislation is always to be approached with some diffidence, I am confident that this is not what reg 3.33(3) means.

105    To rescue the submission from the difficult outcome that reg 3.33(3) does not require those who do not keep records to keep records, one might charitably read the submission as one which instead contends that the effect of the set-off clause is to remove Woolworths’ obligation to pay the loadings, penalty rates or other monetary allowances and hence also the employee’s entitlement to be paid those sums. Quite apart from being inconsistent with its submissions on set-off, however, this is really the same as its first argument above. Thus even if one can re-adjust submission (b) to save it from this problem, it must still be rejected.

106    Woolworths also submitted at [734] that a reading of reg 3.33(3) which required it to maintain details of an employee’s entitlement to be paid loadings, overtime or other monetary allowances produced illogical outcomes. Here the submission was that an employer would not be able to comply with the record-keeping requirements of the Act where there was an annualised salary arrangement. This was because the word ‘details’ in reg 3.33(3) assumed that the payment in question was capable of separate and distinct identification. This was said not to be true in the case of annualised salaries. I reject this submission. There is no difficulty in identifying the payments which Woolworths must make to its employees under the Award. Woolworths is entitled to take advantage in any single payment period of the amount it has paid over the minimum wage as an initial set-off against its obligations under the Award in the same pay period. If the amount due under the Award exceeds that amount then it is bound by the terms of the Award to pay the balance which is due. However, I can discern no reason why there can be any difficulty recording the information necessary to determine these matters.

107    I therefore conclude that Woolworths failed in the case of the Calculation Employees to keep the records referred to in reg 3.33(3). For completeness, I would also reject Woolworths’ more general point that overtime records did not practically need to be kept for employees on annual salaries. Here the argument was that the annual salaries included an element for Award entitlements. If one accepts that in every case this element exceeded Woolworths’ obligations under the Award then I might be disposed to see the force of the observation. However, leaving aside all other objections (such as the limited effect of the set-off clause), the argument fails where the employees work more than what the additional element covers. Woolworths’ more general rhetorical point fails to deal with this or to explain how, in that situation, entitlements are to be determined in the absence of records. As I now explain, Woolworths’ clocking records do not constitute records for the purposes of reg 3.34. I therefore do not accept Dr Higgins’ submission at T1271.40-46.

Regulation 3.34

108    Regulation 3.34 requires Woolworths to keep a record that specifies the number of overtime hours worked by an employee during each day or when the employee started and ceased working overtime hours. There is no doubt that Woolworths did not keep a record for each employee which literally specified this information. Woolworths’ answer to this was that it did keep these records because the information could be deduced from: (a) its Published Kronos Rosters (being rosters in the Kronos System which were printed out and displayed in a common area) and (b) the clocking data for its employees. For present purposes it may be assumed that it is in fact possible to deduce the information required to be recorded for the purposes of reg 3.34(a) and (b). Making that assumption, those two sets of data cannot constitute a record of the information required by reg 3.34. Such a record must be ‘in a form that is readily accessible to an inspector’: reg 3.31(1)(b). It must also be capable of being copied and made available to an employee or former employee for inspection upon request: reg 3.42(1). I therefore do not accept that the two data sets can constitute records of the information required by reg 3.34 unless the process of accessing the two data sets and interrogating them to deduce the information referred to in reg 3.34 can be described as one that is ‘ready’ (i.e. ‘readily accessible to an inspector’) and ‘available’ (i.e. ‘available for inspection’ by a requesting employee). I do not accept that this process can be described in that way. Hence, I do not accept that the Published Kronos Rosters together with the clocking data constitute records for the purposes of reg 3.34.

109    Woolworths also rehearsed its submissions as to why the effect of annualised salaries and its set-off clause entailed that it had no obligations under reg 3.34. I have already explained why I reject that cluster of submissions for the purposes of reg 3.33(3). I reject it for largely the same reasons in the case of reg 3.34.

FWO v Coles

110    Here the issues are similar to but not identical with those which arise in FWO v Woolworths. Coles makes five submissions. First, it submits that it had no obligation under s 535 of the FW Act to keep the records referred to in regs 3.33(3) and 3.34 in the case of the employees on annualised salaries with a set-off clause. I reject that submission for the reasons I have given in FWO v Woolworths.

111    Secondly, Coles submits that it was not required by reg 3.33(3) or reg 3.34 to keep records of the ordinary hours worked by an employee. An example of this would be cl 29.4(a) of the Award which provides for an additional 25% loading for work done during ordinary hours after 6 pm on a weekday (noting that, as explained later in these reasons, between 6 pm and 9 pm on a weekday falls within the span of ordinary hours under cl 27.2). I agree with Coles’ submission that reg 3.34 does not apply to the payment of a such a loading because it is not paid for overtime hours actually worked by an employee. However, this conclusion has no impact on the operation of reg 3.33(3) which continues to apply in such a situation. Coles’ submission here is not that reg 3.33(3) does not apply but rather that it does not require a record of the ordinary hours worked which give rise to a penalty rate or loading. In particular, Coles says that the requirement in reg 3.33(3) to ‘set out details of’ the penalty rate or loading to be paid is directed only at the amount of that payment.

112    I disagree with this construction. If the ‘details’ referred to in reg 3.33(3) refer only to the amount of the payment then the word is redundant and the stipulation in the provision might as well read ‘the record must set out the payment, bonus, loading, rate, allowance or entitlement’. Consequently, the word ‘details’ must be given some work to do: see Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [71] per McHugh, Gummow, Kirby and Hayne JJ. As a matter of ordinary English, ‘detail’ means ‘an item or particular’ (Macquarie Dictionary (online) definition 1) or ‘a detailed narrative or description of particulars’ (Oxford English Dictionary (2nd ed, Clarendon Press, 1989) definition 2). I would infer that the details required by reg 3.33(3) are those which are sufficiently particular to allow an employee to understand the basis upon which the entitlements to which it refers have been arrived at. Thus, if an employee is entitled to be paid at a penalty rate the record must contain sufficient information for the employee to understand why that penalty rate is being paid and how the payment has been calculated. Where an entitlement arises because of the ordinary hours that have been worked (such as in the case of cl 29.4(a)) reg 3.33(3) requires the recording of the ordinary hours, the identification of why the penalty under cl 29.4(a) is payable and the disclosure of sufficient information to the employee to understand how the figure has been arrived at.

113    Thirdly, Coles submits that two allowances it was obliged to pay were premised on the working of ordinary hours. These allowances were a special clothing allowance and an allowance related to Broken Hill. Coles’ submissions did not identify the provisions of the Award which provided for these allowances. However, the relevant clauses are cl 20.2 and 20.13:

20.2    Special clothing

(a)    Where the employer requires an employee to wear any protective or special clothing such as a uniform, dress or other clothing then the employer will reimburse the employee for any cost of purchasing such clothing and the cost of replacement items, when replacement is due to normal wear and tear. This provision will not apply where the special clothing is supplied and/or paid for by the employer.

(b)    Where an employee is required to launder any special uniform, dress or other clothing, the employee will be paid the following applicable allowance:

(i)    For a full-time employee—$6.25 per week;

(ii)    For a part-time or casual employee—$1.25 per shift.

20.13    Broken Hill

An employee in the County of Yancowinna in New South Wales (Broken Hill) will in addition to all other payments be paid an hourly allowance for the exigencies of working in Broken Hill of 4.28% of the standard rate.

114    As I understood the submission, Coles’ point was that these two allowances could not be a penalty rate or loading within the meaning of reg 3.34. I agree. Each of the allowances is not paid for working overtime. I therefore accept Coles’ submission that it had no obligation under reg 3.34 to keep records in relation to these allowances.

115    Coles also submits that reg 3.34 does not apply in relation to the meal allowance for which cl 20.1 provides. Clause 20.1 states:

20.1    Meal allowance

(a)    An employee required to work more than one hour of overtime after the employee’s ordinary time of ending work, without being given 24 hours’ notice, will be either provided with a meal or paid a meal allowance of $18.87. Where such overtime work exceeds four hours a further meal allowance of $17.10 will be paid.

(b)    No meal allowance will be payable where an employee could reasonably return home for a meal within the period allowed.

116    Coles’ point is that the entitlement to a meal allowance is premised on an employee having worked overtime without being provided with 24 hours’ notice and that there is no requirement to keep records of whether an employee was given such notice. I would note, however, that one of its triggering preconditions is the working of at least one hour of overtime. Although Coles’ record-keeping obligation under reg 3.34 is not triggered by the obligation to pay the meal allowance (since it is not itself a penalty rate or loading for overtime hours) it and its size are nevertheless triggered by the working of the overtime which triggers the meal allowance in the first place.

117    In the case of all three allowances Coles remains obliged to keep records of the details of these allowances under reg 3.33(3)(e). The details which it will be necessary to record to comply with reg 3.33(e) will be those which will be sufficient to disclose the basis upon which the allowance has been calculated. In the case of the meal allowance, its obligation under reg 3.33(3)(e) will be to record sufficient information to allow the employee to understand the basis upon which the allowance has been paid. This will inevitably include each of the integers appearing in cl 20.1.

118    Fourthly, Coles submitted that it had no obligation to keep a record of whether employees worked two shifts without having a 12 hour break between them. It submitted that it had no obligation to keep track of such a matter. However, where this occurs cl 31.2 provides for the payment of a penalty rate. Thus Coles is required to record the details of that penalty (including the relevant hours worked) by reg 3.33(3). I would agree that it is not required to keep a record under reg 3.34 since it is not an overtime penalty or loading.

119    Fifthly, Coles submitted that it had no obligation to keep records of circumstances which might enliven s 116 of the FW Act. Section 116 provides:

116    Payment for absence on public holiday

If, in accordance with this Division, an employee is absent from his or her employment on a day or part‑day that is a public holiday, the employer must pay the employee at the employee’s base rate of pay for the employee’s ordinary hours of work on the day or part‑day.

120    This provision moves the economic cost of public holidays from employees who have ordinary hours which fall on a public holiday to their employer. It does so by requiring the employer to pay the employee for the ordinary hours even though they were not worked because of the public holiday. In part of its case the FWO alleges that Coles failed in some cases to make the payments required by s 116 and so contravened s 44. As I understood Coles’ submission, it was that it had no obligation to keep a record of the ordinary hours worked by an employee. It followed from this that it was not obliged to keep records of its obligation to pay this entitlement. I do not accept the submission. The payment required by s 116 is ‘another monetary allowance or separately identifiable entitlement’ within the meaning of reg 3.33(3)(e). Thus Coles is required to keep records which set out the details the entitlement.

121    Coles made a sixth submission on this topic which I do not understand. It was a submission that the FWO’s claim included a contention that Salaried Employees were not paid for the actual hours they worked. Coles submitted that it was not required to keep records of all hours worked by employees but only overtime hours. I would accept that reg 3.34 only applies to overtime. I would also accept that Coles was not obliged to keep records of hours worked which did not engage reg 3.33(3). As I have explained above, however, ordinary hours must be the subject of records where they attract a penalty rate, loading or some other allowance or separately identifiable entitlement and hence reg 3.33(3).

122    The parties also put in contest as Issue 6 the following question: is reg 3.34 satisfied in circumstances where an employer has kept a record of the roster and clocking data for the hours worked by an employee? For the reasons I have already given above in relation to a similar argument by Woolworths, it is not.

B.2 Construction of s 557C

123    In the preceding section dealing with record-keeping obligations, I have concluded that Coles and Woolworths did not comply with the record-keeping obligations imposed by reg 3.33(3) and reg 3.34. In particular, I have concluded that the annual salary and set-off clause did not have the effect of relieving Woolworths and Coles of their record-keeping obligations and that clocking and rostering data were not sufficient to constitute records for the purposes of reg 3.33 and reg 3.34.

124    Non-compliance with those provisions was a contravention of s 535(1) of the FW Act, a civil penalty provision. However, the failure to comply with reg 3.33(3) and reg 3.34 has a forensic significance beyond the fact that it exposes Coles and Woolworths to liability to a civil penalty. On and after 15 September 2017 the FWO submits the failure to comply with the record-keeping obligations in reg 33.3(3) and reg 3.34 has the effect of putting on Woolworths and Coles the burden of disproving the FWO’s allegations of contravention.

125    With effect from 15 September 2017, s 557C of the FW Act came into force. It provides:

557C  Presumption where records not provided

 (1) If:

(a)  in proceedings relating to a contravention by an employer of a civil remedy provision referred to in subsection (3), an applicant makes an allegation in relation to a matter; and

(b) the employer was required:

 (i) by subsection 535(1) or (2) to make and keep a record; or

(ii) by regulations made for the purposes of subsection 535(3) to make     available for inspection a record; or

(iii) by subsection 536(1) or (2) to give a pay slip;

 in relation to the matter; and

(c) the employer failed to comply with the requirement;

the employer has the burden of disproving the allegation.

(2) Subsection (1) does not apply if the employer provides a reasonable excuse as to why there has not been compliance with subsection 557C(1)(b).

(3) The civil remedy provisions are the following:

(a) section 44 (which deals with contraventions of the National Employment Standards);

(b) section 45 (which deals with contraventions of modern awards);

(c) section 50 (which deals with contraventions of enterprise agreements);

(d) section 280 (which deals with contraventions of workplace determinations);

(e) section 293 (which deals with contraventions of national minimum wage orders);

(f) section 305 (which deals with contraventions of equal remuneration orders);

(g) subsection 323(1) (which deals with methods and frequency of payment);

(h) subsection 323(3) (which deals with methods of payment specified in modern awards or enterprise agreements);

(i) subsection 325(1) (which deals with unreasonable requirements to spend or pay amounts);

(j) any other civil remedy provisions prescribed by the regulations.

126    Both Coles and Woolworths made submissions about the operation of s 557C either to the effect that it did not apply or that its application was more circumscribed than the FWO suggested.

127    In summary my conclusions are that s 557C has no relevance to the FWO’s case against Woolworths other than in relation to Ms Violet Brown. In her case and in relation to all of the FWO’s case against Coles, I conclude that:

(a)    s 557C applies to allegations not contraventions;

(b)    the allegation does not have to be sufficiently particularised for s 557C to apply but even if it did, the allegations made by the FWO against Coles are sufficiently particular as are those against Woolworths concerning Ms Brown;

(c)    it is not necessary to determine how s 557C interacts with reg 3.34 because that debate has no relevance where s 557C applies to reg 3.33 interpreted so that the word ‘details’ requires the underlying integers to be set out. But if it were necessary to reach a view, reg 3.34 is concerned only with penalty rates or loadings;

(d)    s 557C applies to partial records not just complete ones; and

(e)    s 557C puts the legal burden of disproving the allegation on the employer and does not create a rebuttable evidentiary presumption.

128    I deal first with the submissions advanced by Woolworths.

Contravention v allegation

129    The first issue between the parties is whether there is a distinction between the contravention referred to in s 557C(1)(a) and the allegation referred to in s 557C(1). The FWO in its oral submissions submitted that the allegations to which s 557C referred were the contraventions alleged. If this is correct then s 557C could have the effect of requiring a respondent to disprove the contraventions alleged (and not just the underlying factual allegations).

130    I do not accept the FWO’s submission. What must be alleged is ‘an allegation in relation to a matter’. That must take place in ‘in proceedings relating to a contravention’. In this situation, the matter to which the allegation relates must be a matter about which the employer had a record-keeping obligation. These show that the concept of an allegation is factual not legal and that the factual matter it relates to is the factual matter which ought to have appeared in the records which were not kept. These concepts are far too narrow to be the contravention alleged.

Particularity and s 557C

131    The second issue is whether the requirement that an applicant make an allegation in relation to a matter imposes upon an applicant an obligation to make an allegation with sufficient particularity. I take the submission to be that if an applicant does not make an allegation in relation to a matter with sufficient particularity then s 557C will not be engaged.

132    At the level of principle, I do not accept that an insufficiently particularised allegation in relation to a matter fails thereby to be an allegation in relation to a matter to which s 557C applies. If an allegation in relation to a matter is insufficiently particularised, then further particulars of the allegation may be ordered. If they are not provided, then the allegation can be struck out. The real issues about provisions which reverse the burden of proof is not whether the matter which is said to enliven them has been sufficiently particularised, but rather whether the applicant’s reliance on the provision has been sufficiently signalled in advance.

133    If, however, an under-particularised allegation goes to trial then s 557C applies to it, if the other requirements of the provision are satisfied. I therefore do not accept that the fact that Woolworths and Coles allege that the FWO’s pleadings are insufficiently particularised entails that s 557C does not apply.

Whether particularity sufficient in FWO pleadings

134    On the assumption that I am wrong in that conclusion, the third issue is whether the FWO’s allegations are insufficiently particularised so that s 557C does not apply. I do not accept that the FWO’s allegations are insufficiently particularised.

135    In the case of Woolworths this is because, as I explain below, there are no factual disputes about when the Calculation Employees worked or for how long (except in the case of Ms Violet Brown). The only issues between the parties concern the application of the Award to those agreed facts (and whatever the facts found about Ms Brown are).

136    Since there are no factual disputes about when the Calculations Employees worked or for how long, the debate about what level of particularity is necessary to engage s 557C is arid since the provision has no work to do (I return to explain this point in more detail below). In the case of the FWO’s allegations about Ms Violet Brown, I deal with the facts relating to her in Part F.1. However, by way of a curtain raiser, the issue is whether she finished work at 5.17 pm or 5.39 pm on 26 September 2018. Woolworths’ punch records indicate that she scanned her fingerprint to punch out at 5.17 pm and again at 5.39 pm. The FWO pushes for the later punch out time as her finishing time, Woolworths for the earlier. I am unpersuaded that this is insufficiently particularised. Woolworths knows the case it has to meet and what it needs to disprove: i.e., that Ms Violet Brown finished at 5.17 pm and not 5.39 pm.

Nexus to record-keeping requirements

137    A fourth issue concerns the extent of nexus required between the subject matter referred to in an allegation and the subject matter of the relevant record. Woolworth’s path into this submission assumed that it had been successful in its submissions concerning the operation of reg 3.33. There, it will be recalled, Woolworths had submitted that that regulation did not require the details of the payments, bonuses, loadings, rates or entitlements to be set out in the pay records it was required by the regulation to keep. Whilst Woolworths accepted that the regulation did require the employer set out ‘the details’ of those payments, Woolworths submitted that this did not mean that it was required to set out how those payments had been calculated. I rejected that submission on the basis that ‘details’ meant ‘details’.

138    The present issue arises out of the operation of reg 3.34. Here Woolworths seeks to delimit the work that can be done through reg 3.34; in effect limiting it to a record-keeping obligation in relation to overtime. Woolworths’ anxiety is to avoid reg 3.34 being used to fill the gap left by its narrow interpretation of reg 3.33. For example, it wishes to contend that the ‘penalty rate or loading’ referred to in reg 3.34 does not include the bonuses, monetary allowances, other identifiable entitlements, incentive payments or bonuses referred to in reg 3.33(3).

139    But this is only a useful endeavour from a practical perspective if reg 3.33 works the way Woolworths suggests. Once Woolworths’ narrow construction of reg 3.33 is rejected, its proposed construction of reg 3.34 serves no practical purpose in the litigation. It is therefore not necessary to resolve this issue. Were it necessary, I would be inclined to agree with Woolworths’ construction of reg of 3.34. In a sense, the apparent correctness of what Woolworths submits about reg 3.34 underscores the unsoundness of what it submits about the operation of reg 3.33.

Complete v partial failure

140    A fifth issue concerns whether s 557C is enlivened where a record is kept but is incomplete. Woolworths submits that s 557C is only enlivened where no record is kept at all and that it is not enlivened by incomplete or inadvertently inaccurate records.

141    In this case, for example, Woolworths’ records are incomplete. Its records under reg 3.33 include the matters set out in reg 3.33(1)(a)-(c) and the actual payments referred to in reg 3.33(3) but they do not include how those payments were calculated and hence fail to set out the details required by reg 3.33.

142    If Woolworths’ submission is correct, then s 557C does not apply to these records with the immediate consequence that the burden of disproving the allegations is not reversed in relation to the details which it failed to record. The basis for this submission was s 535(1) which requires an employer to keep for 7 years employee records ‘of the kind prescribed by the regulations in relation to each of its employees’. This was said to direct attention only to the question of whether the record has been kept and not to whether it was complete or not.

143    This overlooks s 535(2) which requires the records referred to in s 535(1) to ‘include any information prescribed by the regulations’. I therefore reject the submission. I also reject Woolworths’ submission that it would be anomalous if the onus of proof was reversed for incomplete records but not where false or misleading records are kept. Here the point seemed to be that whilst s 535(1) required employee records to be kept, s 535(4) provided that ‘An employer must not make or keep a record for the purposes of this section that the employer knows is false or misleading’. As I understood the submission (which was not altogether clear), such a false record could not be a record for the purposes of s 535(1) and, as such, s 557C would not apply to it.

144    I reject this submission for two reasons (if I have understood it correctly). First, I do not accept that a false record for the purposes of s 535(4) is not a record for the purposes of 535(1). Secondly, even if it was, this would entail that s 557C did not apply to the false record but, by hypothesis, the employer would then have failed to have kept any records for the purposes of s 535(1); thus, s 557C would be engaged in relation to the non-fraudulent records which it failed to keep.

145    Woolworths also submitted in the alternative that where a record was incomplete, it could still be relied upon for the matters which it did record. On this view, the reversal of the burden of proof would only apply to the matter which had been omitted from it. I accept this submission. Section 557C puts the burden on the employer to disprove the allegation referred to in s 557C(1). That allegation is in relation to ‘a matter’ and the matter is the thing in relation to which the employer has failed to keep a record. The provision is clearly capable of bearing this interpretation and I can discern no sensible reason why the burden should be reversed insofar as the employer has kept a record of the relevant matter: cf. Gallagher v AAG Labour Services Pty Ltd [2020] FCA 1753 at [19]. The FWO submitted that the contrary position was supported by a statement made by Colvin J in Ghimire v Karriview Management Pty Ltd (No 2) [2019] FCA 1627; 290 IR 331 (‘Ghimire’) at [16]. I do not read that passage as supporting the FWO’s submission.

Nature of the reversal

146    A sixth issue is whether s 557C(1) operates to put an evidentiary burden on the employer or whether it puts the legal burden upon the employer. The words used by s 557C(1) are ‘the employer has the burden of disproving the allegation’.

147    Woolworths draws attention to the heading of s 557C (‘Presumption where records not provided’) and submits that when combined with the words ‘disproving the allegation’ in s 557C(1) it follows that the provision creates a rebuttable evidentiary presumption. It also made submissions about the difference between the legal and evidential onuses which did not appear to me to advance the debate.

148    The heading does support Woolworth’s submission but the plain words of s 557C(1) do not. The provision is explicit in providing that ‘the employer has the burden of disproving the allegation’. I see no sensible way of reading this as creating a rebuttable presumption. It follows that I respectfully agree with Colvin J’s similar conclusion in Ghimire at [14].

Whether s 557C applies to Woolworths at all

149    In the FWO’s case against Woolworths, the parties have agreed the actual starting and finishing times of the Calculation Employees with the exception of Ms Violet Brown. There is also agreement about their level of employment under the Award. The dispute between Woolworths and the FWO is, in fact, only about the construction of the provisions of the Award and their application to Calculation Employees. Whilst this may underscore that it was very odd that the parties sought to cross-examine those of the Calculation Employees who were called (over several weeks), it does show that s 557C has no work to do in Woolworths’ case. Leaving aside the position of Ms Violet Brown, there are no factual allegations made by the FWO which remain for me to resolve. Put another way, the FWO and Woolworths’ agreement on the facts means that howsoever s 557C operates in Woolworths’ case, the burden has been discharged by the agreed facts.

150    I return to the position of Ms Violet Brown in Part F.1.

151    Turning then to the position of Coles, it adopted each of Woolworths submissions. The outcome for Coles’ under those submissions differs from the outcome for Woolworths in two respects. First, because the parties in the Coles’ litigation appear to have been unable to reach agreement on the starting and finishing times for the Calculation Employees, s 557C remains relevant to Coles (whereas it is only relevant to Woolworths in relation to Ms Violet Brown). Secondly, for the same reason, it is necessary in the event that I am wrong that a want of particularity does not result in the non-application of s 557C, to determine whether the FWO’s pleading against Coles lacks sufficient particularity.

152    The FWO’s Further Amended Statement of Claim is 57 pages in length. In relation to the Calculation Employees the pleading makes a large number of allegations that the Award was contravened which are collected at Sections E1 to E18. There are allegations at E19 too but, as will be seen, these have no relevance. The allegations all have a similar basic structure. The allegations at E4, which concerns the public holiday penalty entitlement, may serve as an exemplar. The allegations about the Calculation Employees appear at §28:

During the Assessment Period, pursuant to the Retail Award, an employer was required to pay the following penalty payments for all ordinary hours worked by a full-time or part-time employee on a public holiday (Retail Award, clause 29.4(f)(i)) (Public Holiday Penalty Entitlement):

(a) before 1 July 2014 and 30 June 2017, an additional 150% loading for all ordinary hours worked;

(b) between 1 July 2017 and 31 March 2020, an additional 125% loading for all ordinary hours worked by full-time or part-time employees (Retail Award, clause 29.4(f)(i)).

153    Schedule G is headed ‘Public Holiday Penalty Entitlement (cl 29.4(f)(i))’. It contains a row for each Sample Salaried Employee. The headings to the columns and Row 16 which concerns Sample Salaried Employee ID: 220369 are as follows (excluding given name and surname):

154    The record-keeping failures are alleged at § § 106 – 107:

106. During the Assessment Period, in relation to each Salaried Employee, Coles failed to make or keep a record:

(a) which specifies the details of the loadings, penalty rates or monetary allowances applicable to the hours worked by the Salaried Employees; or

(b) which specifies:

(i) the number of overtime hours worked by the Salaried Employees each day (or any day); or

(ii) when the Salaried Employees started and ceased working overtime hours each day (or any day).

107. By reason of the matters set out in paragraphs 104 to 106 above, Coles contravened s.535(1) of the FW Act.

155    The allegation in respect of s 557C is made at §108:

108. By reason of s.557C(1) of the FW Act, Coles bears the burden of disproving the allegations in Parts E, F and G above in respect of underpayments of Salaried Employees for the period 15 September 2017 to 31 March 2020.

156    The Sample Salaried Employees are a subset of the Salaried Employees. In my view the level of particularisation which the FWO has supplied Coles is sufficient. Paragraph 106 alleges a failure to keep overtime records, §107 alleges that this infringed s 535 and the pleading of s 557C at §108 informs Coles that the FWO will rely on that failure in relation to the matters in Parts E, F and G. To continue with the example of Sample Salaried Employee ID: 220369, Coles is informed that the FWO alleges that Coles failed to pay $139.34 in public holiday entitlements to Sample Salaried Employee ID: 220369 across the Assessment Period. Section 557C therefore requires Coles to disprove that fact. It must show that across the Assessment Period it did not fail to pay Sample Salaried Employee ID: 220369 $139.34 in any public holiday entitlement which was due. In practical terms, Coles will be required to prove what work Sample Salaried Employee ID: 220369 did and how much it paid her. It is thus clear what Coles must disprove and how it will have to do it. This appears to me to be precisely the result which s 557C was intended to bring about. That Coles finds itself in an invidious position in this regard is not to be conflated with a want of particularity on the FWO’s part.

157    Finally, in its oral submissions, Coles submitted that it had discharged its evidentiary burden under s 557C by tendering its clocking and rostering data. This is separate from the submission that the clocking and rostering data were records for the purposes of reg 3.33 and reg 3.34. It might be sufficient to reject this submission to observe that I have rejected the submission that s 557C operates to reverse the evidentiary burden. However, that still leaves for consideration the actual question of whether the clocking and rostering data in themselves mean that Coles has discharged its burden of disproving the FWO’s allegations. The parties’ submissions do not appear to address this issue and I assume that they intended that my dealing with their other submissions would suffice for them to determine the outcome on this point. I discuss what can be gleaned from Coles’ incomplete roster and clocking records later in these reasons.

Reasonable excuse

158    Section 557C is set out above. Section 557C(2) provides that s 557C(1) ‘does not apply if the employer provides a reasonable excuse as to why there has not been compliance with subsection 557C(1)(b)’, that is to say, a reasonable excuse for the employer’s non-compliance with the record-keeping provisions.

159    This issue only applies to Coles. Coles submits that it told its Salaried Employees to clock in and clock out of shifts using the Kronos system. I do not see how that provides a reasonable excuse for its non-compliance with the record-keeping provisions. I have already determined that the roster and clocking data are not records for the purposes of reg 3.33 and reg 3.34. I do not see how it can be a reasonable excuse for non-compliance with those provisions that Coles instructed its employees to input data which itself did not suffice to constitute a record.

160    That conclusion makes it unnecessary to deal with a number of issues raised by Coles about s 557C(2).

PART C: AGREEMENTS UNDER THE AWARD

161    Various provisions of the Award make provision for the variation of entitlements by an agreement between the employer and the employee. The parties have joined issue both as to what is necessary to constitute an agreement and who bears the onus of proving that such an agreement was reached.

C.1 The clauses

162    In both the FWO’s claims against Woolworths and Coles, there are disputes about agreements under cll 31.2(c); 29.3(a); 28.14(c) and 29.4(f)(ii). There are additional issues between the FWO and Coles about agreements under cll 28.5, 28.6, 28.11(b), 28.13(b). As I will shortly explain, the issues between the parties for each of these clauses should be approached on the same basis. The parties in FWO v Coles also raised issues relating to agreements under cll 12.2 and 12.3. Clause 12 relates to part-time employees and I have dealt with the issue of agreements in that context at Part E.2.

Clause 31.2(c)

163    Clause 31.2 provides an entitlement to a break between shifts of 12 hours. Clause 31.2(c) provides that:

By agreement between an employer and an employee or employees the period of 12 hours may be reduced to not less than 10 hours.

164    In FWO v Woolworths, Issues 5 and 6(a) respectively ask:

Issue 5

For the purposes of clause 31.2(c) of the Retail Award does the employer bear the legal or evidentiary onus of proving, to the requisite standard, any agreement made between it and an employee?

Issue 6

(a) What constitutes an “agreement” reached between the employee and employer for the purposes of clause 31.2(c) of the Retail Award?

165    These issues were adopted in Baker and a further issue posed:

Issue 14

Is it a requirement of the Retail Award that any agreements made under clause 31.2(c) and/or clause 28.14(c) that have the effect of varying an employee’s award entitlements be made on terms that clearly express to the employee that they are agreeing to vary their award entitlements?

If so, do the Respondents bear the burden of proving that those requirements were met?

166    In FWO v Coles, Issue 19 asks:

(a) What constitutes an agreement for the purposes of clause 31.2 of the Retail Award?

(b) Which party bears the onus of proof that the above agreement was made between the Respondent and a Salaried Employee?

167    The parties could not agree on the exact wording of Issue 19A. Coles’ preferred wording was:

Can there be an agreement for the purposes of cl 31.2(c) of the Retail Award where:

(a) a Salaried Employee is responsible for rostering their own shifts; and/or

(b) a Salaried Employee agrees to return to work before the rostered start time on a particular day in circumstances where the early return results in a break between shifts of between 10 and 12 hours; and/or

(c) a Salaried Employee agrees to work beyond their rostered end time on a particular day in circumstances where the late finish results in a break between shifts of between 10 and 12 hours; and/or

(d) the work in (b) and (c) above occurs in circumstances where one of the Relevant Work Circumstances exist; and/or

(e) a Salaried Employee has completed a roster choices document, or base roster document or another document, which provides for minimum break of 10 hours between shifts?

Or, must any agreement contain a specific term that records that a consequence of agreeing to a shorter break is that it will reduce (or at least modify) the Salaried Employee’s entitlement under cl 31.2(b) of the Retail Award?

168    The FWO’s preferred wording adjusted (b) and (c) as follows:

(b) a Salaried Employee agrees to return to work before the rostered start time on a particular day in circumstances where the early return results in a break between shifts of between 10 and 12 hours (other than in circumstances where the Salaried Employee was directed to do so); and/or

(c) a Salaried Employee agrees to work beyond their rostered end time on a particular day in circumstances where the late finish results in a break between shifts of between 10 and 12 hours (other than in circumstances where the Salaried Employee was directed to do so); and/or

169    Issue 12 in Pabalan was expressed to be equivalent to Issue 19 above.

Clause 29.3(a)

170    Clause 29.3(a) provides:

An employee and employer may agree to the employee taking time off instead of being paid for a particular amount of overtime that has been worked by the employee.

171    In FWO v Woolworths, Issue 14(b) and Issue 17(a) respectively ask:

Issue 14

(b) Further to (a), is there any legal or evidentiary onus of proof required to establish any agreement made between an employee and employer for the purposes of clause 29.3(a) of the Retail Award, and if so, who bears such onus?

Issue 17

(a) What constitutes an agreement under clause 29.3 of the Retail Award to take time off instead of being paid for a particular amount of overtime?

172    Issue 14 was adopted in Baker. In FWO v Coles, the parties were unable to agree on the exact wording of Issue 17. The FWO’s preferred wording was:

(a) What constitutes an agreement under clause 29.3 to take time off instead of being paid for a particular amount of overtime?

(b) Which party bears the onus of proof that any of the above agreements was made between the Respondent and a Salaried Employee?

(c) Further to (a), were such agreements for the purposes of clause 29.3(a) of the Retail Award if:

(i) the time taken off in lieu was not taken within the period of 6 months after the overtime was worked; and/or

(ii) the time taken off in lieu was less than what would have been equivalent to the overtime payment that would have been made?

173    Coles’ preferred wording was:

(a) What constitutes an agreement under clause 29.3 to take time off instead of being paid for a particular amount of overtime?

(b) Which party bears the onus of proof that any of the above agreements was made between the Respondent and a Salaried Employee?

(c) Further to (a), were such agreements for the purposes of clause 29.3(a) of the Retail Award if:

(i) Does the time taken off in lieu was not need to be taken within the period of 6 months after the overtime was worked; and/or

(ii) If the time taken off in lieu was less than what would have been equivalent to the overtime payment that would have been made, can the agreement to take that time in lieu be used to satisfy in part the obligation to otherwise pay overtime?

174    Issue 11 in Pabalan was expressed to be equivalent to Issue 17 above.

Clause 28.14(c)

175    Clause 28.14(a) requires the employer to exhibit staff rosters for each employee on a notice board. Clause 28.14(c) provides:

Due to unexpected operational requirements, an employee’s roster for a given day may be changed by mutual agreement with the employee prior to the employee arriving for work.

176    In FWO v Woolworths, Issue 28(b) asks:

(i) What constitutes a mutual agreement due to unexpected operational requirements for the purpose of clause 28.14(c) of the Retail Award?

(ii) Is there any legal or evidentiary onus of proof required to establish any agreement made between an employee and employer for the purposes of clause 28.14(c) of the Retail Award, and if so, who bears such onus? (Tier 1).

177    In FWO v Coles, Issue 13 is in the same terms as Issue 28(b)(i) above. Issue 28 was adopted in Baker and Issue 9 in Pabalan was expressed to be identical to Issue 13 in FWO v Coles.

178    Issue 14 in Baker (excerpted above in relation to cl 31.2(a)) also applies to cl 28.14(c) and, additionally, Issue 9 in Baker asks:

For the purpose of cl. 28.14(c) of the Retail Award:

(a) Must any agreement be reached explicitly?

(b) If the answer to (b) is “no” can a “mutual agreement” be reached by an employee working the hours according to the changed roster?

Clause 29.4

179    Clause 29.4 provides for a range of penalty rates and cl 29.4(f)(i) provides for a 125% loading for work on a public holiday. Clause 29.4(f)(ii) then provides:

Provided that by mutual agreement of the employee and the employer, the employee (other than a casual) may be compensated for a particular public holiday by either:

(A)     An equivalent day or equivalent time off instead without loss of pay. The time off must be taken within four weeks of the public holiday occurring, or it shall be paid out; or;

(B)     An additional day or equivalent time as annual leave.

180    In FWO v Woolworths, Issues 51(a) and (c) ask:

(a) What constitutes a mutual agreement for the purpose of clause 29.4(f)(ii) of the Retail Award?

(c) Is there any onus of proof required to establish any agreement made between an employee and employer for the purposes of clause 29.4(f)(ii) of the Retail Award, and if so, who bears such onus?

181    These issues were adopted in Baker and very similar phrasing was used in Issue 11 in FWO v Coles:

(a) What constitutes a mutual agreement for the purpose of clause 29.4(f)(ii) of the Retail Award?

(b) Which party bears the onus of proving that any of the above agreements was made between the Respondent and a Salaried Employee?

182    Issue 8 in Pabalan was expressed to be equivalent to Issue 11 above.

Clauses 28.5 and 28.6

183    Clause 28 deals with the topic of 38 hour rosters. Clauses 28.5 and 28.6 (which are only relevant to Coles) provide:

28.5 In retail establishments employing on a regular basis 15 or more employees per week, unless specific agreement exists to the contrary between an employer and an employee, the employee will not be required to work ordinary hours on more than 19 days in each four week cycle.

28.6 Where specific agreement exists between an employer and employee, the employee may be worked on the basis of:

(a) not more than 4 hours’ work on one day in each two week cycle;

(b) not more than 6 hours’ work on one day in each week;

(c) not more than 7.6 hours’ work on any day.

184    The parties in FWO v Coles were unable to agree on the exact wording of Issue 21 . The FWO’s preferred wording was:

(a) What constitutes a specific agreement for the purposes of clauses 28.5 and 28.6 of the Retail Award?

(b) Does a specific agreement include a roster choices document (hard copy or electronic) and/or a written roster?

(c) Which party bears the onus of proof that any of the above agreements was made between the Respondent and a Salaried Employee?

185    Coles’ preferred wording adjusted (b) as follows:

(b) Does a specific agreement include a roster choices document (hard copy or electronic) and/or a written roster (in circumstances where the employee was responsible for rostering their own shifts)?

186    Issue 13 in Pabalan was expressed to be equivalent to Issue 21 in FWO v Coles.

Clauses 28.11(b) and 28.13(b)

187    Clauses 28.11 and 28.13 provide:

28.11 Consecutive days off

(a) Ordinary hours will be worked so as to provide an employee with two consecutive days off each week or three consecutive days off in a two week period.

(b) This requirement will not apply where the employee requests in writing and the employer agrees to other arrangements, which are to be recorded in the time and wages records. It cannot be made a condition of employment that an employee make such a request.

(c) An employee can terminate the agreement by giving four weeks’ notice to the employer.

28.13 Employees regularly working Sundays

(a) An employee who regularly works Sundays will be rostered so as to have three consecutive days off each four weeks and the consecutive days off will include Saturday and Sunday.

(b) This requirement will not apply where the employee requests in writing and the employer agrees to other arrangements which are to be recorded in the time and wages records. It cannot be made condition of employment that an employee make such a request.

(c) An employee can terminate the agreement by giving four weeks’ notice to the employer.

188    Issues 15 and 16(c) in FWO v Coles provide:

Issue 15

(a) What constitutes a request by an employee in writing for the purpose of clauses 28.11(b) and 28.13(b)?

(b) What constitutes agreement by the employer to a request in (a) for the purpose of clauses 28.11(b) and 28.13(b)?

(c) What is required for an agreement to be recorded in the time and wage records for the purpose of clauses 28.11(b) and 28.13(b), and how is that requirement satisfied?

Issue 16

(c) Which party bears the onus of proving that any of the above agreements was made between Coles and a Salaried Employee?

189    Issue 10 in Pabalan is expressed to be identical to Issue 15 in FWO v Coles.

Use of the term ‘agreement’

190    In light of the above, the following phrases connoting agreement are therefore deployed in the Award:

By an agreement between an employer and an employee… (cl 31.2(c))

An employer and an employee may agree….(cl 29.3(a))

…an employee’s roster for a given day may be changed by mutual agreement with the employee (cl 28.14(c))

Provided that by mutual agreement of the employee and the employer (cl 29.4(f)(ii))

…unless specific agreement exists to the contrary between an employer and an employee (cl 28.5)

… the employee requests in writing and the employer agrees to other arrangements (cll 28.11(b) and 28.13(b))

191    It is difficult to see any practical reason why the nature of these various agreements should differ as between the various clauses. Although the wording of these provisions varies I conclude that the concept of agreement which appears in each is the same.

192    In summary my conclusions are that, where the employee is agreeing to forego a right or entitlement which the Award confers upon them, the objective circumstances must show that the employee was aware of the entitlement and agreed to forgo it. Woolworths and Coles bear the onus of proving that an agreement was reached.

C.2 Content of agreement

193    The words used in the clauses are ‘agreement’, ‘agree’, ‘mutual agreement’ and ‘specific agreement’. These words bear their ordinary meaning. As a matter of ordinary language there will be an agreement (or the parties will agree) where the objective circumstances indicate that the employer and the employee have reached a consensus ad idem on the subject matter of each clause; that is to say, there should be a meeting of the minds. This is the approach taken to contractual formation at common law. Whilst the agreements referred to in the Award need not be supported by consideration I do not discern any reason why an objective approach to the question of agreement ought not to be taken and why that objective inquiry should not be into whether there has been a meeting of minds.

194    Each of the clauses set out above involves an employee foregoing a right or entitlement which the Award confers upon them. For an employee to agree to forego that right or entitlement the objective circumstances must indicate that the employee was aware that the right or entitlement existed. To take the example of cl 31.2, the fact that the employee agrees to a roster with a 10 hour break between shifts does not provide objective evidence that the employee agreed to forego his or her entitlement to a break between shifts of 12 hours. For such an agreement to be demonstrated it would be necessary for the objective circumstances to show that the employee and employer were aware that the employee had an entitlement and was agreeing to forego it. Mere evidence that employees agreed to work shifts which had breaks of less than 12 hours cannot be sufficient. That conclusion follows from what I have just said insofar as such evidence would not disclose any awareness of the entitlement. It is also reinforced by the fact that considering such evidence to be sufficient would render the stipulation of ‘12 hours’ in cl 31.2(a) otiose. Since in modern times employees only work when they consent to do so, their working of shifts with a break between them of more than 10 but less than 12 hours would in every case constitute an agreement for the purposes of cl 31.2(c). That would leave no circumstances in which the ‘12 hour’ stipulation ever meaningfully applied.

C.3 Who bears the onus of proving an agreement under these clauses?

195    The question which now arises in each case is whether it is the FWO which must disprove the existence of the various agreements as part of its case or whether it is instead Woolworths and Coles who must prove as part of their defence that an agreement has been reached.

196    I will begin with the FWO’s allegations against Woolworths in relation to its failure to afford employees the benefit of a 12 hour break between shifts to which they are entitled by cl 31.2.

197    On the pleadings, the issue arises in this way. First, the FWO alleges at §33 of its Further Amended Statement of Claim that the annual salary paid to the Salaried Employees was not sufficient to pay them the double rate of pay referred to in cl 31.2(b) where they recommenced work without having had a 12 hour break. Next, at §34 the FWO identifies which of the Calculation Employees were underpaid in this way and articulates the amount of the underpayments. Then, at §33(c) of its Further Amended Defence Woolworths alleges that the FWO has failed to plead that the Salaried Employees had not agreed to reduce their break between shifts under cl 31.2(c). At §9(a) of the FWO’s Reply, it is then alleged that it is Woolworths which bears the onus of proving that such agreements were reached.

198    The FWO has the legal burden of establishing the contraventions of the Act which it alleges. The FWO alleges that Woolworths has contravened s 45 of the Act by failing to comply with cl 31.2 of the Award: §§33, 34 and 88 of the Further Amended Statement of Claim. The allegation is one of underpayment under cl 31.2(b). Section 45 provides that ‘[a] person must not contravene a term of a modern award’. The term of the Award which is alleged to have been contravened is cl 31.2(b), that is to say, the provision imposing on Woolworths the obligation to pay the penalty rate. There are two issues between the parties about cl 31.2(b). The first is how much the clause requires an employer to pay when it is engaged (i.e., which rate is doubled by the expression ‘double the rate’). The second, which now arises, is whether in order to demonstrate that there has been an underpayment under cl 31.2(b) the FWO must prove that cl 31.2(c) has not been engaged (i.e. that it has not been agreed that the 12 hour period in cl 31.2(a) should be reduced to some other period of time (being not less than 10 hours)) or whether, instead, this is a matter for Woolworths affirmatively to establish (i.e. that is has been agreed that the 12 hour period in cl 31.2(a) should be reduced).

199    Clause 31.2(b) establishes a norm of conduct breach of which constitutes a contravention of s 45 of the Act. The FWO’s allegation that s 45 has been contravened therefore devolves to an allegation that cl 31.2(b) has been contravened. The capacity of the parties under cl 31.2(c) to reduce the break between shifts from 12 hours to not less than 10 hours is, therefore, a proviso to cl 31.2(b). Why? Whilst cl 31.2(b) is expressed to create an obligation to pay by reference to the 12 hour period referred to in cl 31.2(a), the evident effect of cl 31.2(c) is to change that 12 hour period to some lesser period being not less than 10 hours if the parties so agree.

200    If the proviso in cl 31.2(c) is in the nature of a justification or excuse explaining why what would otherwise be an underpayment in contravention of cl 31.2(b) is not, in fact, such a contravention then the burden of demonstrating that it has been enlivened will lie upon Woolworths. If, on the other hand, cl 31.2(c) forms part of the total statement of a contravention of cl 31.2(b) then the burden of proof will rest upon the FWO. This is a question of construction of cl 31.2 to be resolved as a matter of substance rather than form: Avel Pty Ltd v Multicoin Amusements Pty Ltd [1990] HCA 58; 171 CLR 88 at 119 per McHugh J; Vines v Djordjevitch [1955] HCA 19; 91 CLR 512 at 519 per Dixon CJ, McTiernan, Webb, Fullagar and Kitto JJ; Waters v Mercedes Holdings Pty Ltd [2012] FCAFC 80; 203 FCR 218 at [16]-[18] per Jacobson, Flick and Foster JJ.

201    Clause 31.2(c) is not part of the total statement of a contravention of cl 31.2(b) but is instead in the nature of a justification or excuse. An employer who is alleged to have contravened cl 31.2(b) because it has failed to pay the prescribed penalty rate to an employee who had a break between shifts of less than 12 hours, may plead in defence to that allegation the fact that the employee and it agreed to a shorter break under cl 31.2(c). As such, it is Woolworths which bears as part of its defence the affirmative burden of proving the existence of the kinds of agreement referred to in cl 31.2(c). Thus, the FWO does not bear the burden of proving, on its case that s 45 was contravened, that there were no agreements under cl 31.2(c).

202    The mechanics of the analysis are the same for the agreements referred to in cll 29.3(a), 28.14(c), 29.4(f)(ii) and, unique to Coles, cll 28.5, 28.11 and 28.13. In each case, it is Woolworths and Coles who must prove than an agreement was reached.

203    To address a particular submission made by Woolworths in respect of cl 29.4(f)(ii), Woolworths submitted that:

(a)    It had a published TOIL policy under which public holidays which were worked were banked as TOIL in the Kronos system.

(b)    This was sufficient to constitute an agreement.

204    I reject this for the reasons I have already given. Absent evidence that an employee was aware that by taking banking TOIL in Kronos that they were foregoing a right to a penalty payment, there can have been no agreement under cl 29.4(f). The position for Coles is not different.

PART D: DETERMINING ENTITLEMENTS UNDER THE AWARD

D.1 Extended ordinary hours

205    Each proceeding raised issues for determination which concerned the concept of extended ordinary hours. Clause 27.2(b)(iii) provides for extended ordinary hours in the case of retailers if their ‘trading hours’ extend after 9 pm during the week or after 6 pm on Saturdays or Sundays. If the clause is enlivened the extended finishing time for ordinary hours is 11 pm.

206    In this context, Issues 1 to 3 in FWO v Woolworths ask:

Issue 1

What is the meaning of the term “retailers” in clause 27.2(b)(iii) of the Retail Award? Does the term “retailers” refer to:

(a) the retail business generally; or

(b) a particular retail store?

Issue 2

If the term “retailers” means a particular retail store, do Extended Ordinary Hours in clause 27.2(b)(iii) of the Retail Award apply:

(a) only to the particular days of the week on which the retail store trades beyond the hours specified in the sub-clause; or

(b) to all days of the week if, on any day of the week, the retail store trades beyond the hours specified in the sub-clause?

Issue 3

Having regard to the meaning of “retailers”, what Extended Ordinary Hours applied to each of the five relevant stores operated by Woolworths in which the Calculation Employees worked during the Calculation Period and on what days of the week did those Extended Ordinary Hours apply?

207    In FWO v Coles, Issues 52 and 53 also consider cl 27.2(b)(iii) though the parties were unable to agree on the exact wording. Coles’ preferred wording was:

Issue 52

What is the meaning of the term “retailers” in cl 27.2(b)(iii) of the Retail Award? Does the term “retailers” refer to:

(a) a retail corporate entity generally; or

(b) a particular retail store?

Issue 53

If the term “retailer” means a particular retail store, do Extended Ordinary Hours in cl 27.2(b)(iii) of the Retail Award apply:

(a) only to the particular days of the week on which the retail store trades beyond the hours specified in the sub-clause; or

(b) to all days of the week if, on any day of the week, the retail store trades beyond the hours specified in the sub-clause?

208    FWO’s preferred wording was:

Issue 52

What is the meaning of the term “retailers” in cl 27.2(b)(iii) of the Retail Award? Does Is cl 27.2(b)(iii) directed the term “retailers” refer to:

(a) a retail corporate entity generally; or

(b) a particular retail store?

Issue 53

If cl 27.2(b)(iii) is directed to the term “retailer” means a particular retail store, do Extended Ordinary Hours in cl 27.2(b)(iii) of the Retail Award apply:

(a) only to the particular days of the week on which the retail store trades beyond the hours specified in the sub-clause; or

(b) to all days of the week if, on any day of the week, the retail store trades beyond the hours specified in the sub-clause?

209    The parties in Baker adopted Issues 1 and 2 in FWO v Woolworths. Woolworths adopted its submissions from FWO v Woolworths on this aspect and Mr Baker adopted the submissions of the FWO.

210    There is no issue between the parties in Pabalan about the operation of cl 27.2(b)(ii).

211    In summary my conclusions are that:

(a)    cl 27.2(b)(iii) applies to the actual trading hours of a retailer. If a retailer has more than one store it may have more than one set of trading hours. In such a case, cl 27.2(b)(iii) will apply to each set of trading hours. Once a set of trading hours enlivens the clause, the ordinary hours determined by the clause will apply in relation to that set of trading hours; and

(b)    ‘all days’ should be construed as ‘all such days’.

212    In Woolworths’ case, this entails that the extended hours applied at the Macarthur store on Saturdays but not otherwise. In Coles’ case, extended hours applied at the Sandringham store on Saturdays and Sundays but not otherwise.

FWO v Woolworths

213    Clauses 27.1 and 27.2 provide:

27.    Hours of work

27.1    This clause does not operate to limit or increase or in any way alter the trading hours of any employer as determined by the relevant State or Territory legislation.

27.2    Ordinary hours

(a)    Except as provided in clause 27.2(b), ordinary hours may be worked, within the following spread of hours:

(b)    Provided that:

(i)    the commencement time for ordinary hours of work for newsagencies on each day may be from 5.00 am;

(ii)    the finishing time for ordinary hours for video shops may be until 12 midnight; and

(iii)    in the case of retailers whose trading hours extend beyond 9.00 pm Monday to Friday or 6.00 pm on Saturday or Sunday, the finishing time for ordinary hours on all days of the week will be 11.00 pm.

(c)    Hours of work on any day will be continuous, except for rest pauses and meal breaks.

214    This clause is more complex that it first appears and its language is filled with traps for the unwary. Some observations should, therefore, be made at the outset about what cl 27.2 does. First, cl 27.2(a) provides that ‘ordinary hours’ may be worked within the spread of hours identified in the table. Ordinary hours are not, therefore, trading hours. They are merely hours which, if worked, are taken to be ‘ordinary hours’. Whether hours worked are ‘ordinary hours’ has consequences for, at least, the calculation of overtime under cl 29.2(a):

Hours worked in excess of the ordinary hours of work, outside the span of hours (excluding shiftwork), or roster conditions prescribed in clauses 27 and 28 are to be paid at time and a half for the first three hours and double time thereafter.

215    That ‘ordinary hours’ are not ‘trading hours’ is emphasised by cl 27.1, which makes clear that the clause is not intended to alter the trading hours of an employer as determined under relevant State laws. As it happens, it is quite plain that cl 27.2(a) has no impact on trading hours at all as a matter of ordinary language. But the effect of cl 27.1 is that if there were any ambiguity about this, it would be resolved in favour of a conclusion that ordinary hours have nothing to with trading hours – at least, insofar as cl 27.2(a) is concerned.

216    If cl 27.2(a) were all that the Award said on the topic of ordinary hours, then the topics of ordinary hours and trading hours would slip past each other like ships in the night. However, cl 27.2(a) provides that its setting of ordinary hours (in principle disconnected from trading hours) is subject to cl 27.2(b). Clause 27.2(b) touches on the topic of trading hours both implicitly and explicitly. It does so implicitly in the case of the newsagencies and video shops referred to in cll 27.2(b)(i) and (ii). Thus a newsagent may have a commencement time of 5 am for ordinary hours and a video shop may have a finishing time for ordinary hours of 12 am. Both clauses assume that the commencement and finishing times for ordinary hours to which they refer are, in fact, actual commencement or finishing times.

217    This is quite contrary to the structure of cl 27.2(a) where there is no link between ordinary hours and trading hours. It has particular significance to the operation of cl 27.1. Its evident intent is to head off any conflict between the Award and a State law regulating trading hours by ensuring that cl 27 does not impact on trading hours prescribed by State laws. Clauses 27.2(b)(i) and (ii) present just such a risk. In principle, the power conferred on an employer to fix ordinary hours by reference to actual commencement and finishing times could directly conflict with a State law which prohibited such a commencement or finishing time. The effect of cl 27.1 is to require, if possible, that cl 27.2(b)(i) and (ii) not be read as speaking on the topic of actual trading hours.

218    It is not necessary to determine in this case what the outcome of reconciling cl 27.1 with cll 27.2(b)(i) and (ii) might be, but I draw attention to it to underscore why, for the purposes of cl 27, it is very important to keep at the forefront of one’s mind the distinction between trading hours and ordinary hours. One is about when an employer opens and closes its business to the public; the other is a notional set of times used as a benchmark to assess overtime under cl 29.2(a).

219    It is with that distinction in mind that one turns to the terms of cl 27.2(b)(iii). What is striking about cl 27.2(b)(iii) is that it makes the ordinary hours a function of the trading hours of the retailer. In doing so, it does not affect the trading hours themselves. Thus the potential difficulty which cl 27.2(b)(i) and (ii) have in relation to State laws which regulate trading hours does not arise. It does, however, link the two concepts in a way which is foreign to cl 27.2(a).

220    I have described cl 27.2(b)(iii) as making ordinary hours a function of a retailer’s trading hours. The word function conceals the full operation of the clause. The dispute between the parties concerns the identification of the function which relates the ordinary hours to a retailer’s trading hours.

221    With those introductory remarks, the parties are divided on two legal issues.

222    The first is whether the trading hours referred to in cl 27.2(b)(iii) are the trading hours which apply at particular stores or whether, as Woolworths submits, one must determine the trading hours of the ‘retailer’ referred to in the clause. The parties saw this as a dispute about the meaning of the word ‘retailer’, with the FWO contending that it means a particular store and Woolworths saying that it means the entire organisation. As I will explain, while I agree with Woolworths that retailer means the entire organisation, I think both parties have missed the real issue which is the meaning of ‘trading hours’ and whether a retailer may have more than one set of trading hours if it operates more than one store.

223    The second legal issue concerns the words ‘all days’. Woolworths submits, and the FWO denies, that once the clause is enlivened for at least one day of the week, then the effect of the phrase ‘finishing time for ordinary hours on all days of the week will be 11.00 pm’ is to declare the finishing time for ordinary hours to be 11 pm for all days of the week. The FWO, by contrast, says that ‘all days’ means ‘all such days’.

224    The manner in which these two debates are framed in the pleadings is somewhat confused. At §19 of the Further Amended Statement of Claim (‘the FASOC’) the FWO initially alleged that the extended hours applied at all stores at which the relevant employees worked apart from the Macarthur store which was initially alleged to close at 6 pm on Saturdays. The pleading extends to all of Woolworths’ stores and to all of the 19,000 employees. For the purposes of these reasons, I will utilise the pleading only insofar as it relates to the five stores and 32 employees involved in the trial unless otherwise necessary.

225    In its defence, Woolworths said that the extended hours applied to all stores but contended that the Macarthur store closed at 9 pm on Saturdays. It also said that not only did the extended hours apply at all stores but that they applied on all days of the week.

226    Subsequently, the FWO amended §19 of the FASOC to allege that the Macarthur store closed at 9 pm on Saturdays which Woolworths then admitted. The FWO also alleged that the extended hours did not apply at the Macarthur store on any other day of the week. Woolworths denied this. In its reply the FWO then said at §8(b) that the Macarthur store closed at 6 pm on Sundays and it denied that the extended hours applied on all days of the week.

227    On the pleadings therefore the position is that:

(a)    the parties agree that the extended hours apply to four of the stores on all days of the week;

(b)    the parties do not agree that extended hours apply to the Macarthur store on Mondays to Fridays or Sundays; and

(c)    the FWO alleges, and Woolworths admits, that the Macarthur store closed at 9 pm on Saturdays. The effect of this is that extended hours also applied at the Macarthur store on at least Saturdays.

Does the clause apply to retailers or stores?

228    In my view, this question is irrelevant. What enlivens cl 27.2(b)(iii) is particular ‘trading hours’. Trading hours are the hours at which a retailer trades with the shopping public. Where a retailer conducts more than one store it is logically possible that it has more than one set of trading hours. In this case, for example, Woolworths has 1,076 stores across which there is very considerable variation in trading hours.

229    What cl 27.2(b)(iii) does is to determine a retailer’s ordinary hours by reference to its trading hours. Since its trading hours may, and in this case do, fluctuate between different stores operated by a retailer, cl 27.2(b)(iii) will bring about different outcomes for a retailer depending on what its trading hours are at different stores. One store operated by a retailer may have a set of trading hours which enlivens the clause, another may not. Clause 27.2(b)(iii) will lead to one result in the former case and another in the latter.

230    On this view of cl 27.2(b)(iii) I would accept Woolworths’ submission that the reference to a ‘retailer’ is a reference to the entity as a whole which is conducting the retail business. That submission is consistent with a decision of the Full Bench of the Fair Work Commission handed down after this trial, Application by the Australian Retailers Association; Variation on the Commission's own motion – General Retail Industry Award 2020 [2024] FWCFB 197 (the ‘Span of Hours Decision’), on which the parties provided supplementary submissions. But I would reject the further assumption on which both Woolworths’ submission and the Span of Hours Decision rest, that a retailer may only have a single set of trading hours. To the contrary, it is plain that where a retailer conducts more than one store, it is possible that the retailer’s trading hours may vary between those stores.

231    Thus whilst I would reject the FWO’s submission that the word ‘retailer’ means a shop, the fact that retailer means the entity conducting the retail business does not lead to the conclusion for which Woolworths contends, that the trading hours of individual stores is irrelevant. Once one admits that a retailer may conduct its trade at more than one store one necessarily admits of the possibility that it may have more than one set of trading hours.

232    Woolworths mounted a series of arguments as to why the clause should not be read as requiring an analysis of the trading hours of particular stores. Several of these arguments were put forward in response to the FWO’s contention that ‘retailer’ meant ‘shop’. Since I agree with Woolworths that ‘retailer’ means retailer, these arguments have no purchase against the proposition that a retailer with more than one store may have more than one set of trading hours. Thus it is not necessary to deal with Woolworths’ submission that the ordinary meaning of ‘retailer’ is retailer (it is), or that at various points the Award uses the words ‘retail store’, ‘retail establishment’, ‘shop’ or ‘employer’ (it does, but this does not matter where I accept ‘retailer’ means retailer).

233    But Woolworths did make some other submissions which were designed to show that the clause should not be interpreted so as to focus on the position of particular stores. The first was that the trading hours of a retailer’s stores might be subject to variation or ad hoc alteration. No doubt this is true. But I think one may proceed safely upon the assumption that a retailer knows what its own trading hours actually are.

234    In truth, perhaps what underlies Woolworths’ submission is an anxiety about the administrative burden of calculating overtime under cl 29.2(a) by reference to different ordinary hours at different stores. But the source of that administrative burden should be identified. There is no administrative burden on a retailer who conducts business at just one store, because it will have just one set of opening hours. Likewise, I struggle to see great burden for a retailer with five stores. The true source of the burden arises from the fact that Woolworths conducts its retail business through 1,076 geographically disparate stores.

235    Even so, I think it is legitimate to take into account the fact that reading cl 27.2(b)(iii) as requiring an examination of the retailer’s actual trading hours will create an administrative burden for large retailers. However, that is not the only interpretative factor involved.

236    Trending more strongly in the opposite direction are difficulties with Woolworths’ submission that it has a single set of trading hours. The first difficulty is that I would read ‘trading hours’ as meaning actual trading hours. Instead of its actual trading hours (which vary widely between stores), Woolworths’ construction necessarily entails the identification of a single set of trading hours. If that is correct it will, however, have the consequence that for those of its stores which do not have actual trading hours which are the same as this hypothetical and single set of trading hours, Woolworths’ trading hours at those stores will not be the actual hours those stores trade. In my view, this seems an absurd result. Additionally, it is inconsistent with cl 27.1 which, by seeking to ensure that cl 27 does not trespass on State laws regulating trading hours, indicates clearly a preference for the idea that trading hours are something which happen in the real world.

237    The second difficulty is the absence of any suggested methodology to determine in the case of a multistore retailer what its single set of trading hours is where there is, in the real world, a range of trading hours at different stores. The methodological problem is both actual and legal. It is actual in Woolworths’ case because of the state of the evidence.

238    Evidence was led about the opening times of the five stores from Ms Ella McInerney who is the People Director of Woolworths New Zealand Limited. At §106-107 of her affidavit dated 22 February 2023 she explained the process by which Woolworths recorded the current opening hours of all Woolworths stores in Australia in a spreadsheet. The spreadsheet reveals the following opening hours for each of the five stores (the last column indicates whether these were hours which enlivened cl 27.2(b)(iii)):

239    One may see in microcosm with just these five stores the problem that Woolworths confronts. It is the selection of some methodology by which one may ascertain from a list of varying trading hours a single set which may be said to represent them all.

240    If attention is expanded to take into account all 1,076 of Woolworths’ stores, then recourse to Ms McInerney’s spreadsheet shows a bewildering array of trading hours. At [444] of its closing submissions Woolworths argued that it was easily proven from Ms McInerney’s spreadsheet that its trading hours ‘extend[ed] beyond’ 9 pm on Mondays to Fridays and beyond 6 pm on Saturdays and Sundays. But that statement involves a blurring of the unavoidably hard edges of this problem. On any view, cl 27.2(b)(iii) requires the identification of trading hours. Trading hours are opening and closing times. A closing time of ‘beyond 9 pm’ is not a closing time. Once one accepts, as I think one must, that the trading hours referred to in cl 27.2(b)(iii) are the hours at which the retailer opens and closes, Woolworths’ task of identifying at just what single time its stores closed becomes much more difficult.

241    To illustrate the problem, Ms McInerney’s spreadsheet shows that on weekdays there were a variety of closing times: 8 pm, 9 pm, 10 pm, 11 pm. Some stores never closed at all. In Western Australia, all of Woolworths’ stores closed by 9 pm (no doubt because of particular laws applying in those States). It is unclear how one is to discern from such a cacophony what Woolworths’ single set of trading hours actually would be.

242    What the submission did not say, but which it needed to say, was that most of its stores had a particular closing time. But instead of saying that, what it submitted was that its trading hours as a whole extended beyond 9 pm, which is not a closing time. If Woolworths had identified what it said its closing time was, which it did not, it would then have been necessary to weigh that submission against Ms McInerney’s spreadsheet. Since, however, no closing time was nominated, this cannot be done.

243    Even if a particular closing time had been nominated as being the predominant, it would then have engendered a legitimate inquiry as to why a retailer’s trading hours should be determined by reference to the closing time which mostly predominates. If one is seeking to identify the predominant closing time, ought not the stores be weighted in some way? It is not self-evident that a store with a small number of employees working in it should count as much as one with hundreds. Further, it is not obvious that such a weighting process should even be done by reference to employee numbers rather than, for example, by reference to turnover, profitability or takings.

244    This actual methodological vacuum in Woolworths’ own case is linked to a more serious legal problem. This is that cl 27.2(b)(iii) contains no indication of any method by which a single set of trading hours might be determined. Thus the failure of Woolworths to identify its methodology is mirrored in the absence of such a methodology in the clause itself.

245    On the question of the methodology required by cl 27.2(b)(iii), one approaches this question agnostic as to the number of stores a retailer has. The clause must work equally well for a retailer with one store, three stores or 1,000 stores. If a retailer has but two stores with different trading hours it is obvious that neither predominates (and that is leaving out of account any problem about weighting, not a skerrick of which can be found in cl 27.2(b)(iii)). Thus, I do not think that a methodology of determining a retailer’s closing times by reference to those which predominate can be what cl 27.2(b)(iii) requires, since that cannot work in a simple case of two stores.

246    Thus, whilst I accept that it is legitimate to take into account, in interpreting cl 27.2(b)(iii), that a reading concerned with actual trading hours is likely to impose an administrative burden on large retailers, reading it as permitting the identification of a single set of closing times for each retailer leaves a retailer with an insoluble inability to identify any stable means by which such a single set might be determined.

247    Woolworths also advanced a submission that its employees sometimes moved between stores. No doubt, this is true. However, I do not see that this gives rise to a problem. Ordinary hours are a function of trading hours, and trading hours are something which happen at the actual stores which the retailer operates. Inevitably, ordinary hours will differ between stores as their trading hours differ. This will mean that employees who move between stores will be in a situation where the calculation of their overtime will turn, sometimes, on which store they are working in. Accepting again that for large retailers this will be administratively burdensome, it is a function of the basic machinery of the clause which makes ordinary hours a function of trading hours. Adding it to the weighting exercise referred to in the preceding paragraph, it comes nowhere near overcoming the failure of the clause to indicate how a single closing time is to be calculated as entailed by Woolworths’ approach.

248    Woolworths also sought to rely on the proposition that cl 27.2(b)(iii) was intended to reflect the fact that business needs are reflected in the trading hours of a business and should be a factor in establishing the limits of ordinary hours. I accept this submission. Clause 27.2(b)(iii) makes the ordinary hours a function of the retailer’s trading hours. Further, the proposition is supported by the Full Bench of the Commission said in Re General Retail Award 2010 [2010] FWAFB 305; 192 IR 9 at [14]:

We accept the logic that business needs reflected in the trading hours of the business should be a factor in establishing the limits on working of ordinary hours. We have accepted the concept in providing flexibility for newsagents and video stores. In a variety of ways it is also reflected in previous instruments. It is appropriate that a late night penalty applies to compensate for the social inconvenience of such hours, but requiring normal trading hours to be worked only on an overtime basis is generally not appropriate. We will insert a new cl.26.2(b)(iii) in line with the NRA application.

249    However, I do not accept Woolworths’ next submission, which is that the nature of Woolworths’ business requires its trading hours to be approached on an overall basis. If Woolworths’ business needs required that all of its stores closed at the same time then they would do so. The fact is that Woolworths’ business needs differ between its stores. Some busy city stores need to be open 24 hours per day, some country stores have much more limited hours. The only business need I can identify which would justify the conclusion that there should be one set of trading stores for the whole business is the administrative burden which arises from having to keep track of how cl 27.2(b)(iii) operates when Woolworths has chosen to keep its stores open at different times. Whilst I accept that this may be said to be a business need, the more predominant business needs would appear to be those which are actually causing it to maintain different trading hours at different stores. In my view, the business needs which cl 27.2(b)(iii) reflects are those which explain differences in trading hours. The administrative burden to which I have referred is not one of those needs. If I am wrong about that then Woolworths can solve this problem by having all of its stores close at the same time. However, I suspect that the business needs which explain the different trading hours are greater than the administrative burden. In any event, in my view it is business needs as expressed in trading hours which are material.

250    For those reasons, I do not accept that the question of a retailer’s trading hours is to be approached on any other basis than that the clause is referring to actual trading hours. I agree with Woolworths that ‘retailer’ means ‘retailer’. The difficulty is that ‘trading hours’ also means ‘trading hours’.

What are Woolworths’ trading hours for the five stores for the purposes of cl 27.2(b)(iii)?

251    I have set out Ms McInerney’s evidence about this above. Leaving aside, for now, the position of the Macarthur store on Saturdays, I find that the trading hours of each of the five stores are as set out in that table.

252    As I set out above there was initial disagreement in the pleadings about the trading hours of the Macarthur store on weekends. However, the latest iteration of the pleadings, the trading hours spreadsheet exhibited to Ms McInerney’s affidavit and the evidence of Mr Flematti clearly demonstrate that the store closed at 9 pm on Saturdays.

Do the extended hours apply at the Macarthur store on every day of the week?

253    The second issue between the parties is the meaning of the words ‘all days’. Since the evident intent of the clause is that a retailer’s trading hours should drive the determination of ordinary hours, it is difficult to understand how extended hours should apply where the trading hours do not go beyond ordinary hours and therefore do not enliven the clause. The absurdity of this outcome is evident in the case of the Macarthur store. Woolworths’ trading hours at this store do not enliven cl 27.2(b)(iii) on Mondays to Fridays or Sundays but they do so on Saturdays. Yet if read literally, ‘all days’ would operate to apply the extended hours to Woolworths’ Macarthur store on every day of the week, including those days when its trading hours do not enliven the clause.

254    The Award is an industrial agreement to be construed in a practical fashion. As French J observed in City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union [2006] FCA 813; 153 IR 426 at [57], ‘[t]here is a long tradition of generous construction over a strictly literal approach where industrial awards are concerned’ (citations omitted). Further, in the process of construction ‘meanings which avoid inconvenience or injustice may reasonably be strained for’: Kucks v CSR Ltd (1996) 66 IR 182 (‘Kucks’) at 184 per Madgwick J.

255    In this case, it is tolerably clear that cl 27.2(b)(iii) was intending to state more briefly this statement:

where trading hours extend beyond 9.00 pm on a weekday or 6.00 pm on a Saturday or Sunday, the finishing times for ordinary hours on that weekday will be 11.00 pm, on Saturdays 11.00 pm, or on Sundays 11.00 pm

256    This tripartite structure matches up with the tripartite criteria on which the clause operates. In one sense it is correctly summarised as ‘the finishing times for ordinary hours on all days will be 11.00 pm’. However, this form dissolves the threefold criteria and gives rise to the present ambiguity. The FWO’s proposed construction of ‘all days’ as ‘all such days’ achieves the same outcome as the more expanded form I have just mentioned. I therefore accept the FWO’s submission about this.

257    As Woolworths noted in its supplementary submission, the Fair Work Commission in the Span of Hours Decision commented on the intended operation of cl 27.2(b)(iii) in amending the corresponding provision in the 2020 successor to the Award. I disagree with those comments to the extent that they suggest that ‘all days of the week’ can include days on which trading hours do not go beyond ordinary hours.

258    I conclude that the extended ordinary hours only applied at the Macarthur store on Saturdays.

FWO v Coles

259    In FWO v Woolworths the identification of the stores in question permitted me to understand why the debate about extended ordinary hours mattered. In that case, there was a live dispute as to how the ordinary hours for the Macarthur store were to be determined. In this case, the parties did not initially identify why the determination of extended ordinary hours matters. Subsequently I asked the parties to identify an actual store to which Issues 52 and 53 were relevant. I was informed by Coles that the dispute was relevant to the Sandringham store at which one representative employee, Ms Vaia Konstandelis, worked. The Sandringham store’s trading hours were 6 am to 9 pm daily such that extended ordinary hours were engaged on Saturdays and Sundays but not on weekdays.

260    For the reasons I have given above in FWO v Woolworths I agree with Coles that ‘retailer’ means ‘retailer’, but I conclude that the clause applies to the retailer’s actual trading hours rather than to a single set of trading hours. For the reasons given in FWO v Woolworths I also conclude that ‘all days’ should be interpreted to mean ‘all such days’.

261    There were some additional matters raised by Coles which were not raised by Woolworths. However, these do not persuade me that the clause should be approached other than on the basis of its actual trading hours which, in its case, vary significantly, or that ‘all days’ should not be interpreted as ‘all such days’.

262    The first and best of these points is Coles’ observation that by allowing cl 27.2(b)(iii) to operate on the actual trading hours of the stores at which it conducts its retail business one could have a situation where an employee working in one store at a particular time was paid overtime whilst another employee doing the same work but at a different store would not be.

263    I accept that the phenomenon described by Coles can arise. If Store A closes at 8 pm on Mondays to Fridays and 6 pm on the weekends then the ordinary hours will finish at 9 pm during the week and 6 pm on the weekends (cl 27.2(a)) since the extended hours in cl 27.2(b)(iii) are not enlivened. If an employee at Store A works back until 11 pm during the week stacking shelves they will be entitled to overtime between 10 pm and 11 pm since for that hour they will work past ordinary hours. (They will also be entitled to overtime for the period between 9 pm and 10 pm.)

264    But if Store B closes at 10 pm on Mondays to Fridays the effect of cl 27.2(b)(iii) will be that finishing time for ordinary hours will be 11 pm. If an employee at that store works between 10 pm and 11 pm stacking shelves then they will not be entitled to overtime since they are not working beyond ordinary hours. In both cases, the employees are doing the same work at the same time and in both cases the stores at which they are working are closed. But only the employee at Store A will be entitled to overtime.

265    There are two ways one may view this anomaly. From the perspective of the employees it may be said that it treats differently employees who are doing the same work at the same time and in the same circumstances. From the perspective of employers, on the other hand, the differential treatment of employees is an administrative burden. For both reasons, I accept Coles’ submission that this is undesirable.

266    However, that undesirability must be weighed against the matter I flagged in the Woolworths reasons, which is the impossibility of discerning from cl 27.2(b)(iii) any means of determining what a single set of closing times for a multistore retailer would be. I accept that giving effect to Coles’ submission would remove this anomaly. However, the price to be paid for it would be the inability of the Court to say how cl 27.2(b)(iii) determines in the case of multistore retailers what their single set of trading hours is.

267    Once one accepts that ‘trading hours’ means actual trading hours then the fact is that cl 27.2(b)(iii) makes the extended ordinary hours a function of a retailer’s trading hours. Given that trading hours do fluctuate with the business needs of individual stores, it is inevitable that the anomaly arises.

268    The second matter separately raised by Coles met the point I have made here and in FWO v Woolworths that cl 27.2(b)(iii) does not identify how one is to determine a predominant set of closing times. The submission at [651] was in these terms:

How many physical stores or shops within a retail business would need to operate extended trading hours so as to trigger the operation of the extended span of hours in clause 27.2(b)(iii) does not need to be decided in this proceeding. The question does not arise here because it is abundantly clear on the evidence that a substantial number of stores within the Coles retail business operate with those extended trading hours.

269    I do not agree with this submission. How cl 27.2(b)(iii) operates does need to be determined in this proceeding. The Court must say what the clause means and then it must apply to the facts which are before it.

270    In fact, [651] in submitting that the methodology does not need to be determined contradicts itself. In the same paragraph Coles says that the evidence shows that a ‘substantial number of stores within the Coles retail business operate with those extended trading hours’. That statement is premised on the proposition that the single set of trading hours is to be determined by reference to the trading hours of a substantial number of its stores.

271    There are two problems with this. First, I can see no basis for a substantial number test in cl 27.2(b)(iii). Secondly, the substantial number test cannot work. At least one obvious problem is that there could be two such sets of substantial numbers, for the substantiality of one number does not imply the insubstantiality of another. For example, all of the stores in Western Australia close at 9 pm on weekdays and so do not enliven cl 27.2(b)(iii). The number of stores involved in that State is ‘substantial’. But it is equally obvious that a ‘substantial number’ of stores in New South Wales and Victoria do close at 11 pm. The evidence therefore sustains the conclusion that a substantial number of Coles’ stores close at 11 pm during the week and that a substantial number of them close at 9 pm. The application of a substantial number test on the facts of Coles’ own stores leads to at least two sets of closing times, not one.

272    The third matter raised by Coles was the decision of the Fair Work Commission in Application by Penelope Vickers to terminate the Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited Retail Agreement 2011 [2016] FWC 6350 at [221]-[226] which held that cl 27.2(b)(iii) required one to identify the trading hours of Coles as a whole. I do not agree with this conclusion.

273    Finally, Coles adopted Woolworths’ submissions in FWO v Woolworths. I reject this aspect of Coles’ submissions for the reasons given in FWO v Woolworths.

D.2 Short break penalty

274    Clause 31.2 of the Award provides:

31.2    Breaks between work periods

(a)    All employees will be granted a 12 hour rest period between the completion of work on one day and the commencement of work on the next day. Work includes any reasonable additional hours or overtime.

(b)     Where an employee recommences work without having had 12 hours off work then the employee will be paid at double the rate they would be entitled to until such time as they are released from duty for a period of 12 consecutive hours off work without loss of pay for ordinary time hours occurring during the period of such absence.

(c)    By agreement between an employer and an employee or employees the period of 12 hours may be reduced to not less than 10 hours.

275    Issue 4 in FWO v Woolworths asks:

Does the phrase “double the rate of pay they would be entitled to” in clause 31.2(b) of the Retail Award mean an employee is to be paid:

(a) double the rate prescribed by clause 17 of the Retail Award (or clause 18 of the Retail Award in the case of junior employees) in addition to any shift penalties or overtime payments that the employee is otherwise entitled to be paid for the hours worked; or

(b) double their rate of pay, including double any separately applicable overtime or penalty rates?

276    The Baker parties adopted the short break penalty issue from FWO v Woolworths. Woolworths adopted its submissions from that proceeding on this issue and Mr Baker adopted the submissions of the FWO.

277    In FWO v Coles, Issue 27 asks:

Does the phrase “double the rate of pay they would be entitled to” in cl 31.2(b) of the Retail Award mean an employee is to be paid:

(a) double the minimum hourly rate calculated by reference to clause 17 of the Retail Award; or

(b) double their rate of pay, including double any separately applicable overtime or penalty rates?

278    The short break penalty issue was Question 16 in Pabalan. Question 16 was acknowledged in Ms Pabalan’s submissions (at §200) and orally (at T33.13-19) to be analogous to Issue 27 in FWO v Coles. Coles adopted its submissions from FWO v Coles on this issue and Ms Pabalan adopted the submissions of the FWO.

279    I conclude that cl 31.2(b) should be construed so that the ‘rate they would be entitled to’ means the ‘minimum hourly rate’.

FWO v Woolworths

280    In the FWO v Woolworths proceeding, the FWO submits that the words ‘will be paid at double the rate they would be entitled to’ in cl 31.2(b) means that the penalty is to be calculated on the basis of the ordinary rate of pay in cl 17 including any overtime or penalty rates that may also apply (the ‘compounding approach’). It advances two arguments to support this:

(a)    it is the clear meaning of the expression; and

(b)    it is contextually supported by the reference in cl 31.2(a) to ‘[w]ork includes any reasonable additional hours or overtime’.

281    Woolworths says by contrast that the penalty is to be calculated on the base rate of pay specified in cl 17. It disagrees with the FWO’s submission that the meaning of the clause is clear and submits instead that it is ambiguous. It says that the ambiguity is to be resolved by the industrial context in which the provision appears which includes the fact that at the time the Award was first made in 2010 there existed a general principle that where there are circumstances which trigger different overtime and penalty rates simultaneously, the employee is only entitled to a single penalty rate and that rate does not compound on the back of other penalties allowances. It says therefore that cl 31.2(b) should be interpreted to require the application of the penalty rate only to the base rate of pay.

Ambiguity

282    On its face, Woolworth’s submission that the provision is ambiguous is attractive. The words ‘would be entitled to’ do not identify the source of the entitlement and are capable of referring both to the base rate of pay and also to the clauses which provide for penalties and overtime. It is an example of ambiguity by non-specification.

283    Woolworths submitted that the President of the Fair Work Commission, a judge of this Court, had accepted that the phrase ‘would be entitled to’ was ambiguous in 4 Yearly Review of Modern Awards – Plain language re-drafting – General Industry Retail Award 2010 [2018] FWC 6075 at [45]. In that paragraph (and [40]-[44] before it) Ross P was discussing a ‘plain language exposure draft’ of the successor to the Award, the General Industry Retail Award 2020, cl 16.6(b) of which provided for a Short Break Penalty. Relevantly for present purposes that clause sets the penalty ‘at the rate of 200% of the rate they [the employee] would be entitled to’. After referring to the phrase ‘the rate the employee would be entitled to’, his Honour accepted that cl 16.6(b) was ambiguous but noted the agreement of the relevant parties to retain its existing wording. It can be inferred that the pursuit of plain language redrafting made it desirable, perhaps anomalously, that the ambiguity be continued rather than dispelled. The view that the expression ‘200% of the rate they would be entitled to’ was ambiguous was confirmed again by the Full Bench in Re Application by the Australian Retailers Association [2024] FWCFB 251.

284    For completeness, Masson DP in Re Fantastic Furniture Pty Ltd [2020] FWC 559 at [20] also referred to the statement of Ross P and thought that it showed that cl 31.2(b) was not ‘unequivocal’.

285    In any event, quite apart from these two authorities, I agree with Woolworths that cl 31.2(b) is ambiguous and I reject the FWO’s submission that the meaning of the provision is clear.

Resolving the ambiguity: contextual matters

286    The parties advance two matters as relevant context. Woolworths puts forward the existence of a general principle that in interpreting an industrial instrument an employee is not generally entitled to more than one penalty. For its part, the FWO puts forward the words ‘[w]ork includes any reasonable additional hours or overtime’ in cl 31.2(a).

General principle?

287    Woolworths submitted that as a general industrial principle, where there are circumstances which trigger different overtime and penalty rates simultaneously an employee is only entitled to a single penalty rate and that rate is not cumulative upon overtime, penalties and loadings. For this principle Woolworths cited Racing and Wagering Australia re State Government Agencies Administration Award 2010 [2011] FWA 5985 (‘Racing and Wagering Western Australia’) at [72] and Application by Wilson Parking 1982 Pty Ltd & Others [2004] AIRC 1052 at [19]-[20] (‘Wilson Parking’).

288    In the former decision, Williams C accepted that the clause in that case could be interpreted as having a cumulative effect but thought this an unusual result because:

Historically awards of this Tribunal, the Australian Industrial Relations Commission and the State Industrial Commissions have commonly expressly excluded this type of outcome where it may arise. It is far from normal for an award to provide for the cumulative application of overtime rates and shift loadings.

289    In the Coles reasons below I discuss what the arbitral decisions show about this question. For present purposes, however, it is to be noted that cl 31.2(b) is not concerned with the cumulative application of overtime rates and shift loadings and that the passage above says nothing about this case.

290    In the latter decision Lacy SDP referred to Shift Workers’ Case [1972] AR (NSW) 633; 14 AILR 700 (‘Shift Workers’ Case’), a decision of the Full Bench of the New Wales Industrial Commission, where it was said at 655:

While it is true that the Saturday and Sunday penalty rates are fixed for reasons other than those which are the basis of shift allowances and that the shift worker on a Saturday or Sunday has his shift work disabilities as well as those specifically relating to working on those days, we have taken these matters into account … . We think that they have always been taken into account in the past when the weekend penalty rates have been made non-cumulative on shift allowances.

291    Again the focus of this is on the relationship between weekend loadings and shift working allowances rather than a more general statement that penalty clauses are not to be interpreted cumulatively.

292    Woolworths also relied upon the Commission’s decision in Shop, Distributive and Allied Employees Association v Fantastic Furniture Pty Ltd (t/a Fantastic Furniture) [2020] FWCFB 3570 (‘SDAEA v Fantastic Furniture’) at [29]-[41]. This case was concerned with whether the Fantastic Furniture Enterprise Agreement 2019 should be approved. To answer that question, it was necessary to determine whether the terms of the agreement satisfied the Better Off Overall Test (‘the BOOT’), i.e., whether looked at from an overall perspective the employees would be better off under the agreement than they were under the Award. The agreement contained a clause dealing with the Short Break Penalty. The agreement used the words ‘200% of the Base Rate of Pay’ which is, of course, how Woolworths would interpret cl 31.2(b). The Deputy President who heard the matter at first instance had been concerned that the ambiguity in the clause (being the ambiguity whose existence I accept) might mean that the agreement failed the BOOT.

293    However, the learned Deputy President did not resolve the ambiguity. Instead, he extracted undertakings from Fantastic Furniture subject to which he considered that no employee would be worse off than they would have been under the Award: Application for approval of the Fantastic Furniture Enterprise Agreement 2019 [2020] FWCA 699 at [16]. On that basis he approved the agreement.

294    The Full Bench detected no error in this approach. It neither approved nor disapproved of any interpretation of cl 31.2(b) which is unsurprising since the Deputy President had sidestepped the question. Woolworths submitted that at [29]-[41] the Full Bench had accepted the employer’s submission that at the time of award modernisation it was a general rule that penalty rates would apply at the ordinary time rate. So far as I can see, it does not say this.

295    I therefore do not accept that SDAEA v Fantastic Furniture provides support for the suggested general rule.

296    Against the existence of any general rule, the FWO then submitted that it was entirely possible for an industrial instrument to be construed as permitting cumulative penalties, citing the reasons of Bromberg J in Target Australia Pty Ltd v Shop, Distributive and Allied Employees’ Association [2023] FCAFC 66; 324 IR 304 at [64]. There his Honour observed:

The seventh matter raised by Target also must be rejected. The authorities relied upon by Target do not clearly support its contention that it is unusual for an industrial instrument to provide for a penalty on a penalty and, in any event, these authorities indicate that which is otherwise obvious — that it is open to parties to an agreement to agree to provide penalties on a penalty: see 4 yearly review of modern awards — Overtime for casuals [2020] FWCFB 5636 at [23]–[25] (Hatcher VP, Catanzariti VP and Bull DP); Transport Workers’ Union of Australia v SCT Logistics [2013] FWC 1186 at [16]–[17] (Commissioner Williams). Even if it is correct that industrial instruments rarely provide for a penalty on a penalty, the unusual nature of the 2012 Agreement, which requires the working of an employee’s ordinary time outside the ordinary span of hours of the workplace, may well explain why a penalty upon a penalty was agreed to here. In any event, as discussed above, the search for rationality and consistency with what might otherwise be provided in other industrial instruments is not the right approach when one is construing an enterprise agreement.

297    Whilst adding their own observations both Jackson J and Feutrill J each agreed with this statement. I am not sure that this statement takes the present matter very far. Of course, as Bromberg J with respect correctly observes, any such general principle must yield, if necessary, to the wording of the particular instrument in question. But I do not read his Honour as saying one way or the other whether such a general principle exists.

298    I am unpersuaded that the general principle that penalties ought not to be awarded on penalties is established by any of the cases to which Woolworths took me. Woolworths adopted Coles’ submissions on this issue. For the reasons I give in Coles below I am unpersuaded that any of the decisions to which Coles took me establish the general principle either.

The wording of cl 31.2(a)

299    The FWO submits that the relevant context includes the words in cl 31.2(a) ‘[w]ork includes any reasonable additional hours or overtime’. Woolworths did not respond in its written submissions to this contention. The evident intent of cl 31.2(a) is to make clear that in assessing whether a 12 hour break has occurred the focus is to be on reality rather than ordinary hours. It does not matter whether the employee was working overtime or additional hours when they stopped working or when they recommenced working. The critical matter is that they were working.

300    I do not think that this throws any light on the ambiguity in cl 31.2(b).

Woolworths’ additive submission

301    Although it did not touch on this in its written submissions Woolworths accepted in its oral submissions that the penalty determined under cl 31.2(b) could be added to other overtime or penalty rates: T1375.9. Rather, it described the debate between the parties as being that canvassed above: whether the penalty in cl 31.2(b) was to be applied to the employee’s actual rate of pay (including any penalties and the like) or just to the base rate of pay (with any penalties and the like superadded but not doubled). It is not necessary to form a view on Woolworths’ additive submission.

FWO v Coles

302    In FWO v Coles the issue is whether the rate in cl 31.2(b) is simply to be applied to the base rate of pay or whether it is to be applied to whatever the employee’s actual rate of pay was at the relevant time including, for example, overtime and shift allowances. The issues here are similar to, but not identical with, those in FWO v Woolworths.

303    The FWO advanced the same submission it advanced in FWO v Woolworths that the meaning of cl 31.2(b) was clear, which I reject for the reasons I have given above. The clause is ambiguous and it is therefore appropriate to seek to resolve that ambiguity by reference to the surrounding context.

The surrounding context

304    The FWO advanced two matters of context. The first was relied upon in FWO v Woolworths: the reference in cl 31.2(a) to ‘[w]ork includes any additional hours or overtime’. Secondly, the FWO also points to the contrast between the words in cl 31.2(b) ‘will be paid at double the rate they would be entitled to’ and the words ‘without loss of pay for ordinary time hours occurring during the period of such absence’. I do not accept that either of these matters advances the debate. As I have explained, the first simply ensures that the 12 hours is calculated by reference to events of actual work. The second ensures that the employee is paid for any ordinary hours which would have occurred during the break. Neither of these matters throws any light on whether the penalty in cl 31.2(b) compounds.

305    For its part Coles advanced three contextual matters:

(a)    the use of the word ‘rate’ in various provisions of the Award were said to show that it generally it refers to the base rate of pay;

(b)    the process of award modernisation and changes to the phrase ‘double rates’ in the Metal, Engineering and Associated Industries Award 1998 (‘the Metals Award 1998’) show that the imposition of penalties on penalties was not intended; and

(c)    a more general principle that penalties are not cumulative.

306    As to (a), Coles drew my attention to cll 12,7 and 13.2, the heading to Part 4, cll 18 and 19, and Schedule C4. None of these are persuasive. In each case it is apparent that the rate under discussion can only be the base rate because each reference would otherwise make no sense. For example, cl 12.7 provides:

A part-time employee employed under the provisions of this clause will be paid for ordinary hours worked at the rate of 1/38th of the weekly rate prescribed for the class of work performed. All time worked in excess of the hours as agreed under clause 12.2 or varied under clause 12.3 will be overtime and paid for at the rates prescribed in clause 29.2—Overtime.

307    The fact that ‘rate’ in the first sentence can only mean the base rate springs from the logic of what is being discussed. I do not consider that it (or the other clauses to which Coles refers) provide support for the more general proposition that ‘rate’ in the award means ‘base rate’ where it appears in a context where logic does not demand that ‘rate’ means ‘base rate’. Every clause turns on its own wording and the imperatives of one may not necessarily be those of another. In the case of cl 31.2(b), both readings of ‘rate’ are open and there is nothing about the clause which tells in one direction or the other.

308    As to (b), Coles’ point was this: cl 31.2(b) is a lineal descendant of earlier clauses which had used the expression ‘shall’ or ‘must’ ‘be paid at double rates’. That phrase had been used not only in relation to the retail industry but also a number of other awards including, as everyone knows, the Metals Award 1998. When that award was modernised to become the Manufacturing and Associated Industries and Occupations Award 2010 (‘the Manufacturing Award 2010’) the wording used was ‘must be paid at the rate of double time’: cl 40.4(c). Coles submitted, and I accept, that the natural meaning of that wording is that the rate is just double the base rate.

309    However, I do not think anything can be deduced from this about the meaning of cl 31.2(b). The same original idea, ‘must be paid at double rates’, was found in several awards including some that are ancestors of the Award. But the offspring of those awards have diverged and the family branches have terminated in different wording. One of these branches terminates in cl 31.2(b) while another terminates in cl 40.4(c) of the Manufacturing Award 2010. I do not think that the wording of those two cousins – ‘double the rate’ and ‘at the rate of double time’ – tells one anything about the original meaning of ‘must be paid at double rates’ in the Metals Award 1998 or its relevant analogues. It just tells one that the descendant awards have developed their own wording.

310    This does not necessarily mean that Coles is wrong, however. If it could establish that the original meaning of ‘must be paid at double rates’ in the Metals Award 1998 was that it meant double the base rate of pay then its argument would be on surer footing. However, Coles did not draw my attention to any decision in which ‘must be paid at double rates’ in the Metals Award 1998 (or any other award with similar wording) had been interpreted to mean double the base rate of pay.

311    The basic problem is that there is no material to which my attention was drawn which explains why the wording in cl 31.2(b) was adopted or what the earlier wording actually meant. Coles sought perhaps to surmount this problem by advancing a separate legal contention that the process of award modernisation was not intended to disadvantage employees or increase costs for employers. I accept this legal contention for the reasons set out in footnote 879 of Coles’ written submissions, relying upon [2] of the Award Modernisation Request from which the Award sprang. However, that proposition remains fruitless unless it first be demonstrated what the meaning of ‘shall be paid at double rates’ in the earlier awards actually was. As I have said, Coles attempted no such demonstration. Further, there is no material which suggests that when the Commission made the Award it in any way turned its mind to the current question. Indeed, as the decision of Ross P referred to above at paragraph [283] shows, the clause was understood to be ambiguous and a calculated decision appears at that time to have been made to continue the ambiguity under the banner of plain drafting. Subsequently the Full Bench has decided to remove the ambiguity by changing the wording to ‘at the rate of 200% of the employee’s minimum hourly rate’: Re Application by the Australian Retailers Association [2024] FWCFB 251.

312    As to (c), Coles submitted that there were a number of decisions of Industrial Tribunals that showed that there was a general principle that penalties were not cumulative. The first of these is In the matter of applications by organisations of employees for awards and variations of certain awards with respect to rates of pay for work performed on Saturdays and Sundays (1947) 58 CAR 610. This was a decision of the Full Court of the former Commonwealth Court of Conciliation and Arbitration comprising Drake-Brockman ACJ, Kelly J and Sugerman J. The question in this case, which was decided in 1947, related to the rates of pay for work done on Saturdays and Sundays. The rates claimed were time and half for Saturday and double time for Sunday. The Court was concerned with a complex regulatory structure the details of which are not material. At 624 Drake-Brockman ACJ and Sugerman J said this:

Having all the above factors in mind, we are of opinion that the proper standard is time and a quarter for work done by the class of workers abovementioned between midnight on Friday and midnight on Saturday. The extra payment above ordinary rates therein included to be in substitution for and not cumulative upon any shift premium otherwise payable in respect of the hours to which such extra payment extends.

313    None of the discussion before this passage involves an examination of the question of whether extra payments for Saturday should be in lieu of shift premiums. I accept that the decision does establish that increased rates on the weekend appear to be set so that they substitute for any shift premiums. The same principle was applied by Cook J in In re Butter, Cheese and Bacon Factories and Milk and Cream Condenseries (Newcastle and Northern) Award [1962] AR (NSW) 1 at 3; by the Full Bench of the NSW Industrial Commission in Re Brickmakers and Assistants (State) Award [1948] AR (NSW) 234 at 240; and by Richards J in Re Hospital Employees’ (Metropolitan) Award & Ors [1969] AR (NSW) 120 at 126.

314    From this I would readily conclude that when formulating awards by means of arbitration, it has been the practice of industrial tribunals to make the payment of penalty rates for weekend work in substitution for and not cumulative upon the payment of penalty rates for shift work. I would accept that if cl 32.2(b) were a clause that provided for the award of a penalty rate for weekend work cumulatively upon a shift premium then it would be legitimate to refer to these cases to resolve any ambiguity.

315    However, that is not what cl 31.2(b) is concerned with. It is not related to the imposition of either a penalty for weekend work or a premium for shift work. If I could discern from the cases just mentioned that the tribunals in question had derived their statement about the non-cumulative nature of the relationship between weekend penalty rates and shift penalty rates from some higher general principle that penalties ought not to be cumulatively awarded on top of each other, then I would accept that general principle would be of assistance to Coles. However, despite closely reading the decisions I am unable to detect any support for this more general proposition. As such, based on the material to which Coles took me I am unable to say that there is a general principle that penalties may not be awarded cumulatively on other penalties.

316    Apart from these arbitral decisions, Coles (like Woolworths) also sought to rely upon the decisions in Racing and Wagering Western Australia and Wilson Parking to establish the same general principle. The statement made by Williams C in Racing and Wagering Western Australia was that ‘[i]t is far from normal for an award to provide for the cumulative application of overtime rates and shift loadings’: [72]. Assuming that statement to be correct, however, cl 31.2(b) is not concerned with overtime rates or shift loadings. In any event, the survey of the arbitral decisions to which Coles has taken me suggests that it might not be correct to speak, as Williams C does, of overtime rates. It is apparent from the arbitral decisions that the social nature of weekend work was very much at the fore of the analysis and it does not seem to be necessarily obvious that the reasoning in those decisions can simply be transplanted to overtime rates in general. More broadly, I think there may be some difficulties in translating a view about what was sociable in 1947 to 1969 (when these arbitral decisions were made) into a different modern context where views about the nature of weekend work are not necessarily the same.

317    It may be that Lacy SDP was taken to, or was aware of, other decisions to which I am not privy. In any event, it is not necessary to express a concluded view on this. I do not accept that Racing and Waging Western Australia or Wilson Parking assists Coles.

318    Coles also relied upon SDAEA v Fantastic Furniture, to support its submission. I have explained in FWO v Woolworths why I do not accept that this decision provides support for the general principle now advanced. At [552] of its submissions Coles also referred to the decision in Michael Hill Jeweller (Australia) Pty Ltd T/A Michael Hill [2022] FWCA 4256 (‘Michael Hill’) as authority for the proposition that there was a long-standing practice of making penalties non-cumulative. I was not directed to any particular page where this longstanding practice was discussed in this decision. Michael Hill is a case which did involve, inter alia, the Award. It was a BOOT case about whether an enterprise agreement should be approved. I have been unable to detect any discussion of the present issue in the decision. I do not accept that it assists Coles.

319    It follows that I do not accept that the contextual matters put forward by Coles provide any reason to read cl 32.1(b) as not authorising the award of penalties in a cumulative fashion. This, as it happens, is also the conclusion I have reached in relation to the contextual matters put forward by the FWO. At the end of the contextual considerations, one is left therefore with a clause which is ambiguous and for which no contextual material provides any assistance in resolving that ambiguity.

320    On the other hand, the Full Bench in Re Application by the Australian Retailers Association [2024] FWCFB 251 concluded that generally ‘double rates’ required payment of double time, ie, double the minimum hourly rate. It was for that reason that it altered the wording of the overtime clause. However, the cases the Full Bench examined were not construction suits.

Resolution

321    The question presented by the case is difficult. There are a number of considerations bearing on its resolution.

322    First, whilst it is interesting that the Full Bench last year removed the ambiguity so that the short break clause now operates to make payable double the minimum hourly rate, this cannot affect the interpretation of the clause.

323    Secondly, the words ‘double the rate they would be entitled to’ is capable of meaning double the rate of pay inclusive of any loading or penalty rate. This interpretation is supported both by the word ‘rate’ which could refer to those loadings and penalty rates and the words ‘would be’ which, being subjunctive, may be construed as inviting a consideration of a counterfactual; that is to say, a consideration of what the employee would have been paid had cl 31.2 not applied.

324    Thirdly, the words ‘double the rate they would be entitled to’ is also capable of meaning double the minimum hourly rate applicable during ordinary hours. This involves reading ‘rate’ as ‘minimum rate’ and affording no particular significance to the use of the subjunctive. Whilst I would find this approach to interpretation unattractive in a statute or a regulation, it is much less interpretatively problematic in the context of an industrial instrument.

325    Fourthly, the second meaning is capable of resulting in very high penalty rates. For example, a full-time or part-time employee who works on a public holiday is entitled to be paid ‘an additional 125% loading for all hours worked’ and a casual employee is entitled to a 150% loading: cl 29.4(f). This constitutes double time and a quarter and double time and a half respectively. If these rates are applied through the words ‘double the rate they would be entitled to’ the resulting penalty rate will be quadruple time and a half for full-time and part-time employees  (i.e. 450%) and quintuple time for casual employees (i.e. 500%).

326    Fifthly, it is difficult to discern any particular policy reason why the short break penalty should be accompanied by such draconian consequences, when the other penalties and loadings are not suggested to have this effect.

327    Whilst the matter is finely balanced, I have concluded that considerations of practicality should prevail. The expression ‘double the rate they would be entitled to’ means ‘double the minimum hourly rate’.

D.3 Overtime

328    The parties presented for resolution a series of debates about the operation of the overtime clause, cl 29.2 and the operation of other clauses which affected the operation of cl 29.2. In FWO v Woolworths these are issues 12, 13, 14(a), 18, 19, 20, 21, 24, 26, 27(a), 28(a) and 29. Issues 12, 13, 14, 21, 24, 26, 27(a), 28 and 29 were adopted in Baker and amongst the ‘unique’ issues in that proceeding the relevant issues are 1, 2, 3, 4(a), 5, 6, 7, 8, 9 and 10.

329    In FWO v Coles the relevant issues are 10, 30, 32, 34, 35, 37, 38, 39, 42, 43, 55, 56 and 58. Issues 28, 29, 31, 32, 33, in Pabalan were expressed to be similar or identical to issues raised in FWO v Coles and amongst the non-comparable issues in Pabalan the relevant issues are 15 and 30.

330    I will deal with each of these issues as they arise. However, it is convenient to first make some observations about the operation of overtime under the Award.

331    The parties’ submissions on cl 29.2 and the other clauses potentially affecting overtime entitlements suffered from the significant drawback of failing to approach the provisions involved as a whole. Both parties invoked the context in which cl 29.2 appeared but none sought to construe the provisions in a truly overall and contextual manner.

332    There are four clauses particularly relevant to the operation of overtime under the Award : cll 27, 28, 29 and 31.

333    Clause 27 is headed ‘Hours of work’ and provides:

27.1 This clause does not operate to limit or increase or in any way alter the trading hours of any employer as determined by the relevant State or Territory legislation.

27.2 Ordinary hours

(a) Except as provided in clause 27.2(b),ordinary hours may be worked, within the following spread of hours:

(b) Provided that:

(i) the commencement time for ordinary hours of work for newsagencies on each day may be from 5.00 am;

(ii) the finishing time for ordinary hours for video shops may be until 12 midnight; and

(iii) in the case of retailers whose trading hours extend beyond 9.00 pm Monday to Friday or 6.00pm on Saturday or Sunday, the finishing time for ordinary hours on all days of the week will be 11.00pm.

(c) Hours of work on any day will be continuous, except for rest pauses and meal breaks.

27.3 Maximum ordinary hours on a day

(a) An employee may be rostered to work up to a maximum of nine ordinary hours on any day, provided that for one day per week an employee can be rostered for 11 hours.

334    Several features of the clause should be noted. First, cl 27.2 is headed ‘Ordinary hours’ which suggests that it is concerned with ordinary hours. Secondly, cl 27.2 provides that ‘ordinary hours’ can be worked within the spread of hours specified in the table. However, this is a permission only and cl 27.2(b) does not purport to say what ordinary hours actually are. Thirdly, cl 27.3 then specifies that an employee may be rostered to work up to a maximum of nine ordinary hours per day (or 11 hours on one day per week). I take from this that where up to nine hours in a single day are rostered to be worked within the spread of hours then the hours of work thus rostered constitute ‘ordinary hours’ with a corresponding conclusion about the 11 hour day permitted once only each week.

335    Clause 27 does not in terms say anything about the rostering of an employee for hours which are not ordinary hours. For example, I do not read cl 27.2 as preventing an employee from being rostered outside the spread of hours specified in the table. Nor do cll 27.2 or 27.3 say anything about how long an employee may actually work (as opposed to how many ordinary hours they can be rostered on for). In both cases, a roster may be drawn so that an employee works hours outside the spread of hours or in excess of the 38 hour rule in cl 28.1.

336    Nevertheless, the concept of being rostered necessitates the existence of a roster. The fact that there must be a roster is then confirmed by cl 28 which is headed ‘38 hour rosters’. Clause 28.1 provides:

A full-time employee will be rostered for an average of 38 hours per week, worked in any of the following forms or by agreement over a longer period:

(a) 38 hours in one week;

(b) 76 hours in two consecutive weeks;

(c) 114 hours in three consecutive weeks; or

(d) 152 hours in four consecutive weeks.

337    As with cl 27.2 and cl 27.3 this rule is cast in terms which concern how an employee may be rostered. Clause 28.1 does not, in terms, say that the 38 hour roster is a roster of 38 ordinary hours. However, I consider this a necessary implication. As with cll 27.2 and 27.3, cl 28 does not say anything about how many hours an employee may actually work in a week, only how many ordinary hours they can or must be rostered on for.

338    Overtime is then provided for by clause 29.2:

29.2    Overtime

(a) Hours worked in excess of the ordinary hours of work, outside the span of hours (excluding shiftwork), or roster conditions prescribed in clauses 27 and 28 are to be paid at time and a half for the first three hours and double time thereafter.

(b) Hours worked by part-time employees in excess of the agreed hours in clause 12.2 or as varied under clause 12.3 will be paid at time and a half for the first three hours and double time thereafter.

(c) Hours worked by casual employees:

(i) in excess of 38 ordinary hours per week or, where the casual employee works in accordance with a roster, in excess of 38 ordinary hours per week averaged over the course of the roster cycle;

(ii) outside of the span of ordinary hours for each day specified in clause 27.2;

(iii) in excess of 11 hours on one day of the week and in excess of 9 hours on any other day of the week;

shall be paid at 175% of the ordinary hourly rate of pay for the first three hours and 225% of the ordinary hourly rate of pay thereafter (inclusive of the casual loading).

(d) The rate of overtime for full-time and part-time employees on a Sunday is double time, and on a public holiday is double time and a half.

(e) The rate of overtime for casual employees on a Sunday is 225% of the ordinary hourly rate of pay, and on a public holiday is 275% of the ordinary hourly rate of pay (inclusive of the casual loading).

(f) Overtime is calculated on a daily basis.

339    The triggering events for cl 29.2(a) are therefore:

(a)    working in excess of ordinary hours;

(b)    working outside the span of hours (specified in the table in cl 27.2); and

(c)    working outside the roster conditions specified in cll 27 and 28.

340    When a trigger is activated, an entitlement to overtime arises for the relevant employee. Issue 14(a) in FWO v Woolworths sought to address this point, it asks:

Is it sufficient to establish an obligation to pay overtime under clause 29.2 of the Retail Award if an employee worked hours:

(i) in excess of the ordinary hours of work;

(ii) outside the span of hours (excluding shift work); and/or

(iii) outside the roster conditions prescribed in clauses 27 and 28?

341    In light of the above, the answer to this must be yes.

Roster Notification

342    It will be recalled that under cl 29.2(a) hours worked outside roster conditions trigger overtime. The issue which divides the parties is whether cl 28.14 is one of the roster conditions referred to in cl 29.2(a).

343    In FWO v Woolworths Issues 26, 27(a), 28(a) and (c), and 29 ask:

Issue 26

Are some or all of the requirements in clause 28.14 of the Retail Award a “roster condition” within the meaning of clause 29.2(a)? If so, which ones?

Issue 27(a)

Having regard to the Court’s determination of issue 26:

(a) Does some or all of clause 28.14 of the Retail Award constitute working 'outside' a “roster condition” within the meaning of clause 29.2(a) of the Retail Award if the employer has implemented a different method of implementation of a 38-hour week as contemplated by clauses 28.3 and/or 28.4 of the Retail Award?

Issue 28(a) and (c)

(a) If the Roster Notification Entitlement is a “roster condition” for the purposes of clause 29.2(a) of the Retail Award, would the entitlement to overtime for working outside of rostered hours pursuant to clause 28.14 and clause 29.2(a) of the Retail Award apply if:

(i) the employee works different hours compared to their roster, but does not work in excess of their rostered hours;

(ii) the employee initiates the roster change (and irrespective of whether the change is authorised by the employer);

(iii) the employee is not required by the employer to work outside the hours set out in the roster and the employee performs such work voluntarily without the express or implied authorisation of the employer;

(iv) an employer and employee have:

a. agreed from time to time that the employee will work a roster pattern which is different to the employee's published rostered hours; and/or

b. reached a common understanding that the employee will work a roster pattern which is different to the employee's published rostered hours;

(v) an employer and employee have:

a. agreed from time to time; and/or

b. reached a common understanding, that the employee can work hours of the employee’s choosing, regardless of the published roster;

(vi) any of the Relevant Work Circumstances are applicable?

(c) Is the employer relieved of “roster condition” obligations in clause 29.2(a) of the Retail Award if, irrespective of whether any of the Relevant Work Circumstances arise, there is no mutual agreement to change an employee’s roster made between an employee and the employer before an employee arrives at work due to unexpected operational requirements (an agreement within cl 28.14(c))?

Issue 29

If particular employees agreed from time to time with their employer, or reached a common understanding with their employer, that the employee would work a roster pattern which was different to the employee’s published rostered hours, was the employee’s roster for the purposes of cl 28.14(a) of the Retail Award the actual agreed roster pattern, rather than the employee’s published rostered hours (where the agreed or understood roster pattern is not published)?

344    The parties in Baker adopted Issues 26, 27(a), 28 and 29. Additionally, Issue 10 in Baker asks:

Is cl. 28.14 a "roster condition" for the purpose of clause 29.2(a) of the Retail Award?

If so, on the proper construction of cl. 28.14(a), is an employee entitled to overtime rates if they work:

(a) more than their rostered number of hours; and/or

(b) on calendar days on which the employee is not rostered to work; and/or

(c) hours before the employee's rostered start time; and/or

hours after the employee's rostered end time?

345    In FWO v Coles Issue 43 asks:

(a) Is there an entitlement to overtime under cl 29.2(a) of the Retail Award when a Salaried Employee works hours which are different from or which are not in accordance with a roster notified in accordance with cl 28.14(a)?

(b) Do hours worked by a Salaried Employee pursuant to a roster change initiated by that employee constitute working hours outside of a roster for the purposes of cl 28.14(a), read together with cl 29.2(a), of the Retail Award?

(c) Do hours worked voluntarily by a Salaried Employee that are outside the hours set out in the roster, without being directed by the employer, constitute working hours outside of a roster for the purposes of clause 28.14(a) read together with clause 29.2(a)?

(d) Do hours worked where one or more of the Relevant Work Circumstances exist constitute working hours outside of a roster for the purpose of clause 28.14(a) read together with 29.2(a)?

(e) Where the employer and a Salaried Employee have agreed from time to time or reached a common understanding that the employee can work hours of the employee’s choosing, regardless of their published roster, do those hours worked outside of the published roster constitute working hours outside of a roster for the purposes of clause 28.14(a) read together with clause 29.2(a)?

(f) Where a Salaried Employee worked different hours to their rostered hours but not in excess of those rostered hours, do those hours constitute working hours outside of a roster for the purposes of clause 28.14(a) read together with clause 29.2(a)?

346    The parties were unable to agree on the exact wording of Issue 42. The FWO’s preferred wording was:

Are the requirements in clause 28.14 of the Retail Award a “roster condition” within the meaning of clause 29.2(a)?

347    Coles’ preferred wording was:

Are Is the requirements in clause 28.14(a) of the Retail Award a “roster condition” within the meaning of clause 29.2(a)?

348    Issues 31 and 32 in Pabalan was expressed to be equivalent to Issues 42 and 43(a) in FWO v Coles respectively.

349    In summary my conclusions are that neither cl 28.14 nor any of its constituent subclauses are roster conditions to which cl 29.2(a) applies.

350    Clause 28.14 provides:

28.14 Notification of rosters

(a) The employer will exhibit staff rosters on a notice board, which will show for each employee:

(i) the number of ordinary hours to be worked each week;

(ii) the days of the week on which work is to be performed; and

(iii) the commencing and ceasing time of work for each day of the week.

(b) The employer will retain superseded notices for twelve months. The roster will, on request, be produced for inspection by an authorised person.

(c) Due to unexpected operational requirements, an employee’s roster for a given day may be changed by mutual agreement with the employee prior to the employee arriving for work.

(d) Any permanent roster change will be provided to the employee in writing with a minimum seven days notice. Should the employee disagree with the roster change, they will be given a minimum of 14 days written notice instead of seven days, during which time there will be discussions aimed at resolving the matter in accordance with clause 9—Dispute resolution, of this award.

(e) Where an employee’s roster is changed with the appropriate notice for a once-only event caused by particular circumstances not constituting an emergency, and the roster reverts to the previous pattern in the following week, then extra work done by the employee because of the change of roster will be paid at the overtime rate of pay.

(f) An employee’s roster may not be changed with the intent of avoiding payment of penalties, loading or other benefits applicable. Should such circumstances arise the employee will be entitled to such penalty, loading or benefit as if the roster had not been changed.

351    There is no dispute that Woolworths and Coles complied with cl 28.14(a) and nothing turns on it. The FWO submits that hours worked by an employee which differ from those specified in their published roster are overtime hours. Unless the roster modification machinery within cl 28.14(c)-(f) is followed, any work done by an employee which differs from the published roster was to be seen as being ‘outside…the roster conditions prescribed in clauses 27 and 28…’ and hence was time for which overtime was to be paid under cl 29.2(a).

352    As a matter of text, cl 29.2(a) is not triggered by the fact that an employee has worked hours outside of their roster because there is no mention of a roster (as opposed to a roster condition) in the clause. But a roster condition is not itself a roster. Thus, the overtime clause does not directly operate on what is (or is not) specified in any actual published roster.

353    Despite this textual obstacle, the FWO seeks to argue, however, that hours worked outside the terms of a published roster trigger an entitlement to overtime. The FWO accepts the textual limitations of cl 29.2(a) I have just identified but seeks to manoeuvre around them by identifying a roster condition which it says has the effect of requiring the hours specified in a published roster to be worked. The effect of this submission, if accepted, is that where an employee works hours outside those specified in his or her roster, the employee will have worked hours ‘outside…the roster conditions prescribed in clauses 27 and 28’ in terms of the overtime clause, cl 29.2(a).

354    The challenge then for the FWO is to identify such a roster condition somewhere in cll 27 and 28. The FWO nominated cl 28.14 as such a roster condition. The submission was that cl 28.14 made the existence of the roster a central feature of the Award and carefully specified the circumstances in which a roster might be changed. That may well be so. However, what cl 29.2(a) requires is twofold:

(a)    there must be a roster condition referred to in cll 27 or 28; and

(b)    the roster condition must be one of which it may usefully be said (as cl 29.2(a) does say) that the hours have been worked ‘outside’ of.

355    There are two aspects to the present question. The first is the proper construction of the expression ‘outside…the roster conditions prescribed in clauses 27 and 28’ in cl 29.2(a). The second is the correct characterisation of cl 28.14.

356    As to the first aspect, the word ‘condition’ in the expression ‘roster condition’ bears its ordinary meaning – no party suggested that it had a trade or technical meaning. The noun ‘condition’ means ‘a restricting, limiting or modifying circumstance’ (Macquarie Dictionary (online) definition 7) or, similarly, ‘a restriction, qualification or limitation’ (Oxford English Dictionary (2nd ed, Clarendon Press, 1989) definition 1.5). Although one should be a little circumspect about the use of dictionary definitions, they can provide some guidance and do so in this case. What cl 29.2(a) operates upon are those restrictions on how an employer may roster an employee found in cll 27 and 28 where each restriction must be such that an employee may sensibly be said to work hours ‘outside’ of that restriction.

357    As to the second aspect, none of the provisions of cl 28.14 satisfy both these requirements. Hence, cl 28.14 is not a roster restriction to which cl 29.2(a) applies. Turning to each subclause, cl 28.14(a) requires the employer to post the staff rosters on a notice board. This is not a restriction on how an employer may roster an employee and therefore fails because it is not a roster condition.

358    Clause 28.14(b) provides that an employer must retain superseded roster notices for 12 months. This is not a restriction on how an employer may roster an employee and therefore fails because it is not a roster condition.

359    Clause 28.14(c) permits the employer to alter a roster for a given day by mutual agreement with the employee but only before the employee arrives at work. This is a restriction on the right of the employer to change the roster of the employee. It is therefore a roster condition. However, it is not possible for an employee to work hours ‘outside’ of this restriction as this concept makes no sense. It makes no sense because the restriction is not on when an employer may roster an employee but rather on the ability of the employer to alter the roster. Clause 28.14 (c) is not therefore a roster condition to which cl 29.2(a) applies, although it is a roster condition.

360    Clause 28.14(d) requires permanent changes to a roster only to be done on at least seven days’ notice unless the employee disagrees in which case the notice period is 14 days and a dispute resolution mechanism is enlivened. I accept that this is a restriction on the right of the employer to change the roster of the employee and hence that it is a roster condition. However, as with cl 28.14(c) I do not accept that it is a condition to which the concept of an employee working hours outside of the condition makes sense. Thus cl 28.14(d) is not a roster condition to which cl 29.2(a) applies although it is a roster condition.

361    Clause 28.14(e) provides that where there has been a one-off roster change in accordance with cl 28.14 and the roster reverts to its previous state the following week then the employee is to be paid for any extra work done at overtime rates. Although the matter is not free from doubt, I prefer the view that this is a roster condition. However, it is not a condition of which it is meaningful to speak of an employee working hours outside of. Thus, cl 28.14(e) is not a roster condition to which cl 29.2(a) applies, although it is a roster condition. Further, because cl 28.14(e) contains an actual stipulation that overtime is to be paid it is a powerful indicator that cl 29.2(a) does not apply since this would involve double overtime (or because it would involve superfluity in expression).

362    Clause 28.14(f) prevents an employer changing an employee’s roster with the intention of avoiding penalties, loadings or other benefits. This is a restriction on the ability of an employer to alter an employee’s roster. However, it is not a restriction of which it is meaningful to speak of an employee working hours outside of. Thus, it is not a roster condition to which cl 29.2(a) applies although it is roster condition.

363    In light of those matters, I conclude that neither cl 28.14 nor any of its constituent subclauses are roster conditions to which cl 29.2(a) applies. In light of this conclusion, it is unnecessary to deal with the matter raised in Issue 29 of FWO v Woolworths.

364    In its case against Woolworths, the FWO advance a series of propositions to demonstrate why cl 28.14 should be read as a roster condition to which cl 29.2(a) applied. It will follow from the above that I do not accept this. However, it is necessary in the interests of procedural fairness to explain why I am unpersuaded by the FWO’s propositions.

365    The first four propositions were textual in nature.

366    The first proposition was that the evident purpose of cl 28.14 was to ensure certainty, stability and transparency for the employees within its remit as to their hours of work. I accept this contention.

367    The second proposition (as clarified in reply) was that the existence of a published roster was important to enable employees to assess which of the roster conditions in cl 28.1-13 might be impacted by proposed or actual changes to their rostered hours and whether this would sound in penalties or overtime. I accept this contention.

368    The third proposition was that cl 28.14 was designed to accommodate only the limited exceptions in cl 28.14(c)-(f). I accept this contention.

369    The fourth propositions was that cl 28.14(a) used the language of ‘will’ which was an imperative demand, that cl 28.14 was about rosters and that the broader context including cl 29.2(a) showed that cl 28 (including cl 28.14) was concerned with rules that were conditions about rosters. I accept that the requirement that the roster be published on a notice board is imperative and that cl 28.14 is concerned with rosters. I also accept that it may be said that cl 28.14 is concerned with rules that are conditions about rosters. Another way of putting this is that cl 28.14 is about rules that are conditions about rosters. I do not accept that this quality of cl 28.14 emerges from the surrounding context or cl 29.2(a); rather, it simply appears from the text of cl 28.14.

370    However, as I have explained above, what cl 29.2(a) requires for its enlivenment is a restriction on the right of the employer to make and change the roster of the employee where that restriction must be such that an employee may sensibly be said to work hours ‘outside’ of it. Only when both these conditions are met will there be a roster condition for the purposes of cl 29.2(a). The fact that, as the FWO submits, cl 28.14 may be characterised as being about rules that are conditions about rosters does not satisfy that requirement. For those reasons I am unpersuaded by the FWO’s four textual contentions.

371    The FWO made three other points which were non-textual in nature. The first was that it was improbable that cl 28.14 contemplates an intensive or collateral factual inquiry into when, how and in what circumstances a roster is varied or updated. I do not understand the point of this submission. Clause 28.14 contemplates that a roster may be varied in the circumstances specified in sub-cl (c) and (d). The factual circumstances which enliven (c) are ‘unexpected operational requirements’. I do not think this involves an intensive or collateral factual inquiry of the kind suggested. Sub-clause (d) is enlivened by a permanent roster change which need not have any particular qualities at all so it is difficult to discern the suggested intensive or collateral factual inquiry. I do not accept therefore that cl 28.14 involves an intensive or collateral factual inquiry. As such the proposition that is improbable that the clause would contemplate something which it does not contemplate does not go anywhere or at least anywhere useful. That outcome leads me to suspect that I have not understood the point the FWO is seeking to make. However, if it means anything else, I am unable to understand the point and would reject it for that reason in the alternative.

372    The second non-textual contention was that Woolworths had not established that there was a yearly assessment under cl 28.3 in each relevant store about the method of implementation of the 38 hour working week as provided for in cll 28.1 and 28.2. This submission was advanced in response to an alternative submission made by Woolworths. Since I have not found it necessary to consider that submission, it is not necessary to deal with this one either.

373    The third non-contextual contention was as follows:

[T]o the extent that the hours or partial hours of work were done outside of any Salaried Employee’s rostered hours, the Roster Notification Entitlement is enlivened when one or more of the Relevant Work Circumstances exist.

374    I do not understand where this fits into the current question which is whether cl 28.14 is one of the roster conditions referred to in cl 29.2(a). Since I do not understand it, I do not accept it.

375    That conclusion means that the FWO’s contention that any work done outside a published roster is ipso facto overtime cannot be accepted. This leaves for determination what is to happen in some messy factual situations which derive from the fact that many of the Calculation Employees were given considerable latitude over the hours they actually worked. These may be divided into at least two categories:

(a)    Cases where Calculation unilaterally altered their hours of work on a particular day by, for example, turning up to work early or late but then adjusting their working day so that they worked the same number of hours that they had been rostered on to do. Here the issue is whether the resulting work outside the published roster should be paid at overtime rates.

(b)    Cases where Calculation Employees worked longer hours than appeared in the roster because of the amount of work which needed to be done.

376    Commonsense might suggest that overtime was not payable for (a) but was payable for (b).

377    Both of these factual problems arise from the fact that the employees were given the ability to control their own rosters whereas it is evident that those who drafted cll 28 and 29 did not approach the matter on that basis.

378    As to the situation in (a), a salaried manager who decided to turn up an hour late to work and stay back an hour late, has reached a mutual agreement of the kind referred to in cl 28.14(c). The matter which has led the salaried employee to conclude that they can start an hour late is an unexpected operational requirement of the kind referred to in cl 29.14(c). It is evident that the salaried employees were authorised by both Coles and Woolworths to work in this fashion. The mutual agreement is provided by the employee’s own decision to change their working hours. There can be no doubt about the ability of each employee to provide consent to this from their own perspective. However, they also had authority to bind Coles and Woolworths as well. That authority was provided by the fact that both companies clearly intended their salaried employees to work flexibly. I conclude therefore that where an employee unilaterally altered their working hours in this fashion, no overtime entitlement arose under cl 29.2(a).

379    As to the situation in (b), in the contracts of employment both companies authorised the salaried managers to work reasonable additional hours. Where the amount of work which needed to be done on a particular day required a salaried manager to work additional hours, then overtime was payable under cl 29.2(a) either because the hours were in excess of the relevant 38 hour working week requirement in cl 28.1(a) or because they were worked outside the roster conditions in cll 27 or 28.

380    In each case, there will be a factual question as to whether the overtime hours worked were reasonably required. I have explained earlier how s 557C operates in this case. Given the way the case is framed, it is Coles and Woolworths which bear the burden of proving that the work was not reasonably required.

Leave and rostered public holidays

381    Issue 12 in FWO v Woolworths, which was adopted in Baker, asks:

(a) For the purposes of determining if overtime is payable by reason of clause 29.2 of the Retail Award, do either authorised leave or public holidays rostered but not worked:

(i) constitute “hours worked” (but not hours to which overtime rates are to be applied); or

(ii) not constitute “hours worked”?

(b) Do authorised leave and public holidays rostered but not worked constitute “worked” time, “ordinary hours … worked”, and time an employee “works”, for the purposes of clauses 28.5, 28.10, 28.11, 28.12 and 28.13 of the Retail Award?

382    Issue 10 in FWO v Coles is very similarly framed:

Do authorised leave and public holidays rostered but not worked constitute:

(a) “hours worked” for the purpose of cl 29.2 of the Retail Award; and/or

(b) “worked” time, “ordinary hours”, and time an employee “works”, for the purposes of cll 28.1, 28.2, 28.5, 28.10, 28.11, 28.12 and 28.13 of the Retail Award?

383    Issue 7 in Pabalan was noted to be similar but not identical to Issue 10 in FWO v Coles:

Do authorised leave days, public holidays rostered but not worked, rostered days which were not worked by reason of having time off in lieu, or days worked without any ‘ordinary hours’, constitute:

(a) “hours worked” for the purpose of cl 29.2 of the Retail Award; and/or

(b) “worked” time, “ordinary hours”, and time an employee “works”, for the purposes of cll 28.1, 28.2, 28.5, 28.10, 28.11, 28.12 and 28.13 of the Retail Award?

384    Clauses 28.1 provides:

28.1 A full-time employee will be rostered for an average of 38 hours per week, worked in any of the following forms or by agreement over a longer period:

(a) 38 hours in one week;

(b) 76 hours in two consecutive weeks;

(c) 114 hours in three consecutive weeks; or

(d) 152 hours in four consecutive weeks.

385    When a roster is drawn by an employer it may come to pass that on a day upon which an employee would otherwise be rostered on at work, there falls a public holiday or the employee decides to take a day of annual leave (or perhaps sick leave, long service leave or time off in lieu). Two related issues now arise. First, in giving effect to the various 38 hour roster rules contained in cl 28.1, are the rostered hours not worked on such a day to be counted for the purposes of the roster conditions? Secondly, are such hours to be counted for the purpose of calculating overtime entitlements under cl 29.2(a)?

386    In summary my conclusions are that rostered hours which are not worked due to an entitlement not to be at work (such as sick leave, annual leave etc) count as hours worked for roster and overtime trigger purposes.

Are rostered hours not worked counted for the purposes of the roster conditions?

387    As to the first question, there is a significant problem if time rostered to be worked but not in fact worked because of an entitlement not to be at work is not counted for roster purposes under cl 28.1. The problem has a weak and a strong form. The weak form is that if hours rostered on but not worked because of an entitlement not to be at work do not count for the 38 hour roster rules in cl 28.1 then the requirements of those rules will necessitate that the hours not worked must be made up elsewhere inside the roster.

388    To give that abstraction some flesh, consider the position of Phil who is on a weekly roster working 7.6 hour days, five days, every week Monday to Friday. Phil’s roster falls within cl 28.1(a) because it is a 38 hour roster for one week (and 5 x 7.6 is 38). Suppose Phil tells his employer that he is taking a day of annual leave next Wednesday. When the employer draws up Phil’s roster for next week the question is whether, for the purposes of the 38 hour rule in cl 28.1(a), the 7.6 hours Phil will not be working on Wednesday count towards the 38 hours or not.

389    If that 7.6 hours does not count toward the 38 hours then this will have a serious impact on Phil. It will mean, to begin with, that his employer is entitled to make him work another 7.6 hours during the week to make up the 38 hours in cl 28.1(a). This could be done in a number of ways but one obvious way would be to roster Phil on to work 7.6 hours on Saturday.

390    If this is how the roster rule in cl 28.1(a) works then it means that although an employee is apparently given an entitlement not to be work (because of a public holiday, sick leave, annual leave, long service leave or time off in lieu) this entitlement comes with a downside. The downside is that all rostered hours of work not actually worked by reason of the exercise of the entitlement can be made up by the employer elsewhere in the roster.

391    I have used the example of a single day of leave in Phil’s case but the principle can be extrapolated to all 4 weeks of Phil’s annual leave entitlement. Unless the hours which Phil would have worked in the roster but for the taking of that leave count for roster purposes then the employer is entitled to make up all 4 weeks of leave elsewhere in Phil’s roster. The same is true of public holidays and long service leave. If this is how the roster rules operate then all leave entitlements are chimerical because they must be made up elsewhere in the roster.

392    This is such an outlandish result that I would not construe cl 28.1(a) this way unless compelled to do so by words of unmistakable clarity. In the meantime, having noted the weak objection to construing cl 28.1 in that way, it is convenient to turn to the strong objection. The strong objection takes Phil’s annual leave entitlement and points out that the Award becomes incoherent and unworkable if Phil decides to take five days of annual leave in a week, that is to say, he takes a day of leave for each of the days between Monday to Friday on which he otherwise would have been working for 7.6 hours. In the weak objection, I noted the unfairness in making Phil make up the leave taken in the balance of the roster for the weak. Under the strong objection, the notion that it would be unfair to make Phil work his entire 38 hours on Saturday and Sunday is jettisoned and replaced with the notion that it would be impossible. Because only two days are available in the roster to accommodate the 38 hours which must be filled, Phil will need to work for at least 19 hours on at least one of Saturday or Sunday. But an employee cannot work more than 11 hours in any day and even in that case only one day per week, the maximum hours worked otherwise being 9 hours in any one day: cl 27.3.

393    The weak and strong objections therefore demonstrate that unless rostered hours which are not worked because of an entitlement not to be at work count for roster purposes, then the roster rules in cl 28.1 lead to outcomes which are both outlandishly unfair and worse impossible.

394    Both of these matters persuade me that the submissions advanced by Woolworths and Coles to the effect that such hours not worked do not count for the purposes of cl 28.1 cannot possibly be correct. I accept, as Woolworths submitted, that in some contexts a reference to hours ‘worked’ can connote hours actually worked. However, it cannot be in the context of cl 28.1 for the reasons I have just given. Coles and Woolworths’ other submissions seem to have been directed at cl 29.2(a) and I will deal with these below.

395    There is a point in Pabalan not raised by the FWO and that is whether hours not worked in a roster because time off is taken in lieu count for roster purposes. The same process of reasoning applies. If time off in lieu did not count for roster purposes then time off in lieu would prove illusory since it would need to be made up elsewhere in the roster.

396    There are two final matters under the heading of cl 28.1. First, both sides pointed to authorities which they said supported their positions. I do not think any of those authorities matter in light of the textual necessities I have explained. Secondly, the reasoning above is concerned with a weekly 38 hour roster under cl 28.1(a). However, neither side suggested that the outcome of the debate turned on which subclause of cl 28.1 applied and I can see no reason why it would. I conclude that for the purposes of the roster rules in cl 28.1 rostered hours not worked because of an entitlement not to be at work count for the purposes of those roster rules. These will include sick leave, annual leave, long service leave, public holidays and time off in lieu.

Are rostered hours not worked counted for the purposes of overtime?

397    The formal issue here is whether hours rostered but not worked because of an entitlement not to be at work count for the purposes of the overtime rule in cl 29.2(a). Consider the position of Myrtle who is on a weekly roster of five days working 7.6 hours from Monday to Friday. Myrtle tells her employer that she is taking next Wednesday off as annual leave. I have explained above why when the employer draws the roster the 7.6 hours that Myrtle does not work on that Wednesday nevertheless count for the purposes of the roster rule in cl 28.1(a).

398    Now imagine that in the same week, Myrtle is asked to work an extra two hours at the end of her shift on the Friday. The question which divides the parties is whether she is entitled to be paid overtime for these two additional hours.

399    In my view, it is clear that she is. The extra two hours worked are ‘Hours worked…outside…roster conditions prescribed in clauses 27 and 28’.

400    Once the correct construction for cl 28.1(a) has been determined, then it is difficult to see how this is not an inevitably corollary. Myrtle was not rostered on for those two hours and therefore working them was outside the roster condition prescribed in cl 28.1(a). Woolworths’ basic submission against this is that the hours referred to in cl 29.2(a) had to be hours ‘worked’ and that ‘worked’ had to mean ‘actually worked’. A number of reasons for this were advanced but none matters. This is because I accept Woolworths’ submission that ‘worked’ in cl 29.2(a) means ‘actually worked’. The problem is that this does not matter as some reflection on the position of Myrtle shows. The fact is that Myrtle did work for 2 hours after her shift on Friday. Her overtime claim is therefore for hours actually worked.

401    Woolworths’ submission impermissibly elides the hours for which Myrtle is claiming overtime (2 hours actually worked after her shift on Friday) with the 7.6 hours she was rostered on for on Wednesday but which she did not work because she took leave. But the overtime entitlement has nothing to do with that 7.6 hours. What enlivens cl 29.2(a) is the fact that Myrtle did work for 2 hours outside of the roster condition prescribed in cl 28.1(a).

402    The same confusion afflicts another submission made by Woolworths. This was that its construction of cl 29.2(a) was supported by the purpose of overtime. Here the thinking was that the purpose of overtime was to compensate employees and to provide disincentives for employers not to require employees to work long hours. One may assume the correctness of that formulation of that purpose. But that purpose is precisely served in relation to the two hours that Myrtle in fact works. Woolworths’ submission might have had some purchase if the question was whether Myrtle should be paid overtime for the rostered 7.6 hours she did not work on Wednesday but, as I have explained, that is not the issue. Other submissions made by Woolworths suffered from the same problem and should be rejected for the same reason. Coles submissions were to similar effect.

403    I should say in fairness to Woolworths (and Coles) that the misconception that the debate was somehow about whether time taken as leave attracted overtime was also to be found in several places in the FWO’s submissions.

Methods of Implementation

404    A debate adjacent to the operation of 28.1 and 28.2 arose in Baker which is convenient to deal with here. Issue 4 in Baker asks:

(a) For the purposes of cls 28.3 and 28.4 of the Retail Award, do the words “methods of implementation” refer exclusively to the methods provided for at cl 28.2?

(b) What was the method of implementation of a 38-hour week for the salaried employees for the purposes of clause 28.3 and/or clause 28.4 of the Retail Award?

(c) If the answer to question (a) is no, did the Respondents assess that the method of implementation of a 38 hour week for the salaried employees was that the salaried employees could determine their own hours of work?

405    Clauses 28.3 and 28.4 provide:

28.3 In each shop, an assessment will be made as to which method best suits the business and the proposal will be discussed with the employees concerned, the objective being to reach agreement on the method of implementation. An assessment may be initiated by either the employer or employees not more than once a year.

28.4 Circumstances may arise where different methods of implementation of a 38 hour week apply to various groups or sections of employees in the shop or establishment concerned.

406    When read in the broader context of cl 28, it seems clear that the methods of implementation referred to in cll 28.3 and 28.4 refer to those set out in cl 28.2. Clause 28.2 specifically states that the 38 hour per week average (that is mandated by cl 28.1) ‘may be worked in any one of the following methods’ suggesting that the list in 28.2 is intended to be exhaustive. The absence of expressions like ‘including’ or ‘such as’ further supports a reading of the list in 28.2 as defined.

Authorisation of overtime

407    Issues 13 and 14(c) in FWO v Woolworths, which were adopted in Baker, considered authorisation of overtime:

Issue 13

(a) Is an employee's entitlement to be paid overtime under clause 29.2 subject to the employer requiring the employee to work overtime under clause 29.1 ?

(b) If so, in order for an employer to 'require' an employee to work reasonable overtime hours in clause 29.1, must the employer "authoritatively dictate or demand" such hours be worked?

Issue 14

(c) Further to (a), is overtime only payable if the employer expressly or impliedly requires or authorises an employee to work overtime or is it payable if one or more of the Relevant Work Circumstances exist? If so, does the FWO have to prove a specific requirement or authorisation or Relevant Work Circumstance in respect of each claim of overtime?

408    Issue 3 in Baker also considered authorisation of overtime:

Is overtime payable only if the employer expressly or impliedly requires or authorises an employee to work overtime?

If so, did the Respondents expressly or impliedly require or authorise the employee to perform that work if the Respondents required the employee to complete certain tasks each shift before they left work and/or placed restrictions on the ability of the employee to engage or roster subordinate staff to assist with the completion of the tasks before the end of the shift?

409    This issue was not relevant to FWO v Coles. Though consideration of ‘requirement’ and ‘authorisation’ occurred in FWO v Coles in the context of meal allowances which I will discuss in a later section, counsel for Coles noted that contrary to the suggestion of counsel for the FWO it was not Coles’ position that an employee must be directed to do particular tasks for a period of work in order for them to be entitled to overtime.

410    The debate about authorisation of overtime was framed by the parties in FWO v Woolworths in a way which favoured length over clarity. The apparent dispute between the parties was whether it is necessary for an employer to require an employee to work overtime before the employee could do so. If the answer to this question was thought to be ‘yes’, then there was a question about the facts, matters and circumstances necessary to constitute such a requirement. These issues were thought by the parties to arise from cll 29.1 and 29.2. Clause 29.1 is headed ‘Reasonable overtime’ and cl 29.2 is headed ‘Overtime’. I have set out the relevant portion of cl 29.2(a) dealing with full time employees in my initial consideration of overtime under the Award. Clause 29.1 provides:

29.1    Reasonable Overtime

(a) Subject to s.62 of the Act and this clause, an employer may require an employee to work reasonable overtime hours at overtime rates.

(b) An employee may refuse to work overtime hours if they are unreasonable.

(c) In determining whether overtime hours are reasonable or unreasonable for the purpose of this clause the following must be taken into account:

(i) any risk to employee health and safety from working the additional hours;

(ii) the employee’s personal circumstances, including family responsibilities;

(iii) the needs of the workplace or enterprise in which the employee is employed;

(iv) whether the employee is entitled to receive overtime payments, penalty rates or other compensation for, or a level of remuneration that reflects an expectation of, working additional hours;

(v) any notice given by the employer of any request or requirement to work the additional hours;

(vi) any notice given by the employee of his or her intention to refuse to work the additional hours;

(vii) the usual patterns of work in the industry, or the part of an industry, in which the employee works;

(viii) the nature of the employee’s role, and the employee’s level of responsibility;

(ix) whether the additional hours are in accordance with averaging terms of clause 28 in this award inserted pursuant to s.63 of the Act, that applies to the employee; and

(x) any other relevant matter.

411    The language of ‘require’ will be seen in cl 29.1(a).

412    However, as the argument was developed in the parties’ submission, there was no dispute that under cl 29.2(a) Woolworths had in fact required the Calculation Employees to work additional hours that were reasonably necessary to perform their duties. The FWO submitted orally that such a requirement could be found in the relevant contracts of employment. The standard letter of offer said this:

You may be required to work additional hours as are either reasonably necessary to perform your duties or required by the Company. Working late nights, Saturdays, Sunday and/or public holidays, as well as additional hours, is part of your role and that has been taken into consideration in setting your remuneration.

413    In its submissions Woolworths accepted that this required the Calculation Employees to work reasonably necessary additional hours. It sought to qualify what this meant in a fashion to which I will shortly turn, but the fact is that the parties are in agreement that Woolworths required its Calculation Employees to work reasonably necessary additional hours.

414    This has the consequence that there is no legal debate between the parties as to whether it is possible for an employee to work overtime without being required to do so under cl 29.1(a). So too, there is no debate about what constitutes a requirement under cl 29.1(a) since the parties agree that the contracts of employment provide one.

415    Woolworths then pursued a series of submissions at [547]-[555] which sought to demonstrate these factual propositions:

(a)    Woolworths’ employees were generally required to work 40 hours each week (or a two week version of this consisting of 48 hours in one week and 32 in the next);

(b)    Woolworths’ witnesses understood ‘reasonable additional hours’ to mean one additional hour each shift; and

(c)    The fact that the clocking data tended to show that the Calculation Employees worked in excess of their rostered hours did not mean that there had been a direction from management about this especially when Woolworths submitted that its managers sought to discourage the working of excessive hours.

416    Proposition (a) does not go anywhere. What the employees were ‘generally’ required to do has no bearing on the legal effect of the requirement embodied in each contract of employment. In each case the question will be whether the overtime worked was reasonably necessary to perform the employee’s duties. Proposition (b) makes no sense. What Woolworths’ witnesses understood ‘reasonable additional hours’ to mean is irrelevant to the meaning of that expression in the contract. Proposition (c) is an exercise in misdirection. There is no need for the clocking data to prove the existence of the requirement under cl 29.2(a) – Woolworths has already accepted that such a requirement was present in the contract of employment.

Overtime day as a day ‘worked’

417    Issue 30 in FWO v Coles asks:

Do days of work performed by an employee that are wholly allocated to overtime constitute days “worked” for the purpose of cl 28.12 of the Retail Award?

418    Though the broader submissions around when hours are ‘worked’ for the purposes of cll 27, 28 and 29 were made in the other proceedings as discussed above, targeted submissions on cl 28.12 and when a day is ‘worked’ under that clause only arose in FWO v Coles.

419    Clause 28.12 provides:

Ordinary hours and any reasonable additional hours may not be worked over more than six consecutive days.

420    The FWO submits that the reference to any reasonable additional hours should be understood as a reference to overtime. So construed, the clause has the effect of preventing an employee working on seven consecutive days even if one of those days is a day upon which only overtime is worked. The reasons for this are said to be twofold. First, the FWO submits that ‘worked’ ought not to be read down to mean ‘rostered days worked’. Secondly, there is an accepted dichotomy between ordinary hours and overtime; cl 28.12 observes a dichotomy between ordinary hours and reasonable additional hours; ergo, reasonable additional hours must be overtime.

421    I do not accept either of these contentions. As to the first, I accept the orthodox distinction between ordinary hours and overtime. But construing the clause so that it does not apply to overtime (which can therefore be worked on a seventh day), does not have the effect of causing ‘worked’ to mean ‘rostered days worked’. The insertion of those words into the clause does not result in the clause meaning that overtime is not covered by the clause; it results in the clause not making grammatical sense.

422    As to the second argument, the FWO’s submission is not logical. That overtime is dichotomous with ordinary hours and ordinary hours are also dichotomous with reasonable additional hours does not entail that overtime and reasonable additional hours must be the same thing. There is a dichotomy between killer whales and all other animals. There is also a dichotomy between kangaroos and all other animals. But this does not mean that killer whales are kangaroos.

423    Coles submits that the reference to any reasonable additional hours is a reference to the position of part-time employees. Part-time employees are employees who work less than 38 hours per week and but who have reasonably predictable hours of work: cl 12.1. When a part-time employee commences work the employer and the employee are to agree in writing on a regular pattern of work: cl 12.2. Having done that, however, the employer and employee are at liberty to vary a regular pattern of work by force of cl 12.3:

Any agreement to vary the regular pattern of work will be made in writing before the variation occurs.

424    Specific provision is made for the payment of overtime in the case of part-time employees. Pertinent is cl 12.7 which provides:

A part-time employee employed under the provisions of this clause will be paid for ordinary hours worked at the rate of 1/38th of the weekly rate prescribed for the class of work performed. All time worked in excess of the hours as agreed under clause 12.2 or varied under clause 12.3 will be overtime and paid for at the rates prescribed in clause 29.2—Overtime.

425    It will be seen that this clause contemplates that overtime is paid where hours are worked in excess of the agreed regular hours or, where those regular hours have been varied under cl 12.3, in excess of the hours as varied. These stipulations are reflected in cl 29.2(b) which explicitly deals with overtime rates for part-time employees:

Hours worked by part-time employees in excess of the agreed hours in clause 12.2 or as varied under clause 12.3 will be paid at time and a half for the first three hours and double time thereafter.

426    It will be seen that like cl 12.7 this provision also observes the concept of overtime being paid where hours are worked in excess of a varied regular roster under cl 12.3.

427    Coles’ submission is that the reference to reasonable additional hours in cl 28.12 is a reference to additional hours agreed to be worked by an employee under cl 12.3. On this view, the intent of cl 28.12 is to ensure that ordinary hours (both for full-time and part-time employees) including any agreed variation to a part-time employee’s regular pattern of work must be confined to 6 days of the week. On this view, cl 28.12 is talking about standard working hours and is therefore not concerned with overtime (where standard connotes ordinary hours for full-time employees and originally agreed regular patterns of work or variations thereto for part-time employees).

428    In aid of this construction Coles points out that a distinction between reasonable additional hours and overtime is explicitly observed in cl 31.2:

Breaks between work periods

(a) All employees will be granted a 12 hour rest period between the completion of work on one day and the commencement of work on the next day. Work includes any reasonable additional hours or overtime.

(b) Where an employee recommences work without having had 12 hours off work then the employee will be paid at double the rate they would be entitled to until such time as they are released from duty for a period of 12 consecutive hours off work without loss of pay for ordinary time hours occurring during the period of such absence.

(c) By agreement between an employer and an employee or employees the period of 12 hours may be reduced to not less than 10 hours.

429    I accept this submission. Coles also submits that its construction is supported by the submissions made by the Shop, Distributive and Allied Employees’ Association (‘SDAEA’) to the Fair Work Commission when the Award was first made. I accept that this was the submission made by the SDAEA but I do not regard this as having any real weight in the construction process without knowing what else was submitted to the FWC about this and what the FWC itself said about it. Finally, Coles submits that a distinction between reasonable overtime hours and reasonable additional hours is consistent with cl 29.1:

Reasonable overtime

(a) Subject to s.62 of the Act and this clause, an employer may require an employee to work reasonable overtime hours at overtime rates.

(b) An employee may refuse to work overtime hours if they are unreasonable.

(c) In determining whether overtime hours are reasonable or unreasonable for the purpose of this clause the following must be taken into account:

(i) any risk to employee health and safety from working the additional hours;

(ii) the employee’s personal circumstances, including family responsibilities;

(iii) the needs of the workplace or enterprise in which the employee is employed;

(iv) whether the employee is entitled to receive overtime payments, penalty rates or other compensation for, or a level of remuneration that reflects an expectation of, working additional hours;

(v) any notice given by the employer of any request or requirement to work the additional hours;

(vi) any notice given by the employee of his or her intention to refuse to work the additional hours;

(vii) the usual patterns of work in the industry, or the part of an industry, in which the employee works;

(viii) the nature of the employee’s role, and the employee’s level of responsibility;

(ix) whether the additional hours are in accordance with averaging terms of clause 28 in this award inserted pursuant to s.63 of the Act, that applies to the employee; and

(x) any other relevant matter.

430    To say that it is consistent is not to say very much, however.

431    Although agreements to change a part-time employee’s regular pattern of work under cl 12.3 fit uncomfortably into the expression ‘reasonable additional hours’, three matters persuade me that it should be construed that way.

432    First, cl 28.12 is part of cl 28 which is headed ’38 hour week rosters’. Leaving to one side cl 28.12 no other sub-clause of cl 28 deals with the topic of overtime. Overtime is instead dealt with in cl 29 which is headed ‘Overtime and penalties’. This a textual indicator that cl 28 is not intended to deal with overtime at all.

433    Secondly, there is no escaping that cl 31.2(a) does observe a distinction between reasonable additional hours and overtime. If the FWO is correct then cl 31.2(a) reads ‘Work includes overtime or overtime’ which is unlikely or, worse, that the expression ‘reasonable additional hours’ means something different in cl 31.2(a) to what it means in cl 28.12.

434    Thirdly, these first two matters persuade me that there is a distinction between overtime and reasonable additional hours. The question then becomes: what are reasonable additional hours if they are not overtime?

435    The answer lies in cll 29.2(a) and (b) (extracted above) which specify what overtime is (and hence which also define what it is not). For full-time employees that which is not overtime consists of hours worked up to ordinary hours of work, hours worked inside the span of hours and hours worked inside the roster conditions. None of these can coherently be said to be reasonable additional hours.

436    For part-time employees, however, this is not so. In their case, that which is not overtime is, by cl 29.2(b) hours worked in accordance with the regular pattern of work agreed under cl 12.2 (or less than that pattern) or hours worked in accordance with a variation to that original regular pattern under cl 12.3 (or less than that varied pattern). In the case of this concept, although it is not elegant, I accept that its second part may be described as reasonable additional hours. Although this is to a degree strained, that strain is necessary to prevent cl 31.2(a) descending into nonsense.

437    I therefore accept Coles’ submission about this. Clause 29.12 does not prevent an employee working a seventh day of overtime.

Days off

438    Issues 21 and 22in FWO v Woolworths, which was adopted in Baker, asks:

Issue 21

(a) What is the meaning of the term “week” in clauses 28.10 and 28.11(a) of the Retail Award? Does it mean:

(i) a roster week as fixed by the employer; or

(ii) 7 consecutive days commencing on a Sunday or a Monday as the case may be?

(b) Having regard to the meaning of the word “week”, if an employee does not work on a Sunday and a Monday, has the employee had two consecutive days off in the consecutive 7-day period of Sunday to Saturday?

Issue 22

How is overtime applied if an employee did not have either two consecutive days off in a week, or three consecutive days off in a two-week period?

439    An additional question was raised in Baker. Issue 5 asks:

Where cls 28.10 to 28.13 of the Retail Award refer to a period spanning more than one week, and where that period starts in one roster period and ends in the next (i.e. spanning two roster periods), do the criteria of these clauses:

(a) continue to apply as if the period did not span two roster periods; or

(b) reset at the start of each roster period?

440    The parties in FWO v Coles address cll 28.10 and 28.11 separately in Issues 32, 34 and 35. These issues ask:

Issue 32

For the purposes of cl 28.10 of the Retail Award, when determining whether a Salaried Employee has worked ordinary hours on more than six days in one week, and more than four days in the following week, should a roster fortnight be reviewed on a standalone or rolling basis?

Issue 34

Do days of work performed by an employee that are wholly allocated to overtime constitute a “day off” for the purpose of cl 28.11 of the Retail Award?

Issue 35

How is overtime calculated where clause 28.11(a) is triggered? Is it:

(a) on any two days before or after a single day off, or any single day before or after two consecutive days off; or

(b) on the last possible day or days that could have satisfied the Consecutive Days Off Entitlement; or

(c) some other way?

441    Issues 28 in Pabalan is expressed to be equivalent to Issue 35 in FWO v Coles.

442    Clauses 28.10 and 28.11 provide:

28.10 Ordinary hours will be worked on not more than five days in each week, provided that if ordinary hours are worked on six days in one week, ordinary hours in the following week will be worked on no more than four days.

28.11 Consecutive days off

(a) Ordinary hours will be worked so as to provide an employee with two consecutive days off each week or three consecutive days off in a two week period.

(b) This requirement will not apply where the employee requests in writing and the employer agrees to other arrangements, which are to be recorded in the time and wages records. It cannot be made a condition of employment that an employee make such a request.

(c) An employee can terminate the agreement by giving four weeks’ notice to the employer.

Does cl 28.10 apply on a standalone or rolling basis?

443    In its written submissions, the FWO submitted that this clause was to be approached on the basis that it operated on standalone fortnights but it abandoned this position in its list of issues contending instead that what the clause required was a rolling basis.

444    Neither party explained what they meant by a standalone basis or a rolling basis. I take the standalone basis to be a reference to considering the questions posed by cl 28.10 in two week blocks which succeed each other through the roster and in which the first week of a block never serves as the second week of an earlier block. I take a rolling basis to involve reading the clause as applying across a two week period which commences in whatever the current week is so that the following week will be next week. Unlike the standalone basis where the first week of a block can never subsequently serve as the second week of any other block, the converse is true on the case of the rolling basis. On a rolling basis, the first week of a block has already served as the second week of an earlier block.

445    Coles (but not Woolworths) submitted that cl 28.10 required a standalone basis. The FWO provided no submissions in support of its contention that it required a rolling basis. Coles submitted that the roster system contemplated by the Award were based on roster periods of a week, fortnight or a month on a standalone basis. However, Coles did not explain why this was so. It then submitted that without something to authorise a rolling basis approach to cl 28.10 there was no reason to approach the clause on a rolling basis.

446    The parties’ submissions were not useful. In my view, the key to the interpretation of cl 28.10 is the words ‘in the following week’. In the case of a four week roster, Coles’ fortnight standalone approach entails that week 3 is not the week following week 2. I do not think that the word ‘following’ can be made to do this work. I therefore reject Coles’ submission.

How does an overtime day affect the requirement for consecutive days off in cl 28.11?

447    Here the issue is whether days worked as overtime count for the purposes of this rule or whether, instead, the clause is only a roster condition concerned with the setting of ordinary hours.

448    Coles submitted that cl 28.11 is a restriction on when ‘ordinary hours’ may be worked and hours worked as overtime do not constitute ordinary hours. Consequently, when determining whether an employee has been provided with the required consecutive days off, regard should only be had to the ordinary hours worked by that employee. In its summary response to Issue 34, Coles seems to take this further by stating that because a day worked as overtime is not ordinary hours it is a day off.

449    While I consider that to describe overtime as a ‘day off’ is absurd, I agree with Coles that the operation of cl 28.11 is such that only ordinary hours are considered when assessing whether cl 28.11 has been complied with.

450    As I have explained in a preceding section, clause 28 is entitled with ‘38 hour week rosters’ and deals with that topic. It contains rules about rosters which are referred to in the overtime clause, cl 29.2(a), as roster conditions. Where an employee works outside the roster conditions in cl 28, the employee is to be paid overtime. Clause 29.2(a) therefore assumes that it is possible to work outside a roster condition. It proves that it is possible to work overtime on days which are not rostered.

451    In that circumstance, I read clause 28.11 as one of a number of roster rules dictating how ordinary hours are to be worked. This is because that is what it says (‘Ordinary hours will be worked….’) and because if it is not read that way the reference to working outside the roster conditions in cl 29.2(a) makes no sense.

452    To put it another way, an employee whose ordinary hours are worked so as to provide them with two consecutive days off in a given week is not working ‘outside’ the roster condition in cl 28.11 if they then work a series of overtime hours on one of those days off. However, the very fact that those extra hours are overtime (and so not falling foul of the roster condition in cl 28.11) means that they obtained their character due to being in ‘excess of the ordinary hours of work’ or one of the other triggers in cl 29.2(a). If no such trigger was present, those hours would not be overtime and would contribute to the operation of cl 28.11 as ordinary hours.

453    The FWO made no useful submissions about this topic.

Meaning of ‘week’

454    It is convenient to return to cl 28.10 which is set out above. The next issue which arises between the FWO and Woolworths (but not Coles) about cl 28.10 is when the week referred to in the clause begins.

455    The parties seem to be in agreement that it is the employer that fixes when the week begins but appear to be at issue as to whether the starting day must be the same for all employees. I can see no textual foundation for the FWO’s submission that the starting day must be the same for all employees.

456    The FWO submitted that the only evidence before the Court was that Woolworths rosters began on Monday and took me to the Agreed Statement of Facts [7], [9]-[10]. Woolworths submitted that it also had employees who were on a roster week which commenced on a Sunday. This submission did not include any reference to any evidence and is impossible to assess. Thus the only evidence I was taken to appears to show Woolworths rosters commencing on Mondays.

457    There is no reason to resolve this issue at the level of Tier 1 and 2 issues. However, for each Calculation Employee there will be a Tier 3 question of fact about when that employee’s roster began. That factual debate will then be resolved by reference to the evidence which is before the Court and, potentially, through the operation of s 557C. There is no need further to address the point here.

458    Moving next to cl 28.11(a), the question is how the requirement that the employee have two (or sometimes) three consecutive days off is to be accommodated where those two or three day periods run over the end of the working week as rostered for an employee. For example, where an employee works on a 7 day roster starting on Monday, does the employee have two consecutive days off if he or she does not work on Sundays and Mondays?

459    It is difficult to identify the redeeming features of a construction of cl 28.11(a) which would require these two days not be treated as consecutive and therefore entitling the employee to be treated as if denied one or more days off (I return to how the overtime is to be calculated in that situation in the next section). The answer, I think, is to read cl 28.11(a) as a practical rule: Kucks. This would entail that the word ‘week’ in cl 28.11(a) just means any period of seven consecutive days: cf. Scott v Sun Alliance [1993] HCA 46; 178 CLR 1 at 9. Read this way, cl 28.11(a) will be complied with so long as the requisite two (or three) consecutive days can be found in a given 7 day period.

460    This has the consequence that ‘week’ in cl 28.11(a) has a different meaning to that which it bears in cl 28.10. This is, no doubt, unsatisfactory. But having regard to the nature of the Award as an industrial instrument to be interpreted practically and the absurdity entailed by the FWO’s approach, it seems to me necessary to approach it in this fashion.

Calculating overtime when insufficient days off

461    A feature of cl 28.11(a) is that it operates over a period of two weeks. There must be two consecutive days off in the first week unless there are three consecutive days off across the two week period. At the end of the first week, it may be that two consecutive days off have been taken. But is equally possible that they have not been. And if they have not, one cannot know until sometime in the second week whether the three consecutive day requirement will have been satisfied.

462    Once hours are worked outside the roster condition prescribed in cl 28.11 then overtime will be payable for those hours worked: cl 29.2(a). The issue which divides the parties is the methodology for determining how overtime is to be calculated where cl 28.11 has not been complied with.

463    The FWO submits that overtime becomes payable when non-compliance with cl 28.11 becomes unavoidable. It will only become impossible to comply with cl 28.11(a) when, during the second week of the fortnight, it becomes apparent that it will not be possible for the employee to have three consecutive days off. It would appear to follow that non-compliance will only become certain in this sense once the employee has worked on the 5th day of the second roster week after not having had two consecutive days off in the first week. It is only on that day that it becomes impossible to fit three consecutive days off in the remaining 6th and 7th days of the roster week. This analysis also requires one to keep in mind that the weeks involved in cl 28.11(a) are just given 7-day periods. The two week periods are likewise any given 14-day period. Where the 3-day break is involved, impossibility will be gauged from the beginning of the period in which the employee worked 6 days; ie, the 14 days runs from then.

464    An important corollary of this approach is that two days of overtime will be incurred. This is because the 6th and 7th days of the second week will have been worked outside the roster condition in cl 28.11(a).

465    Woolworths, by contrast, submits that overtime should be payable under cl 28.11(a) on days that should have been a day off. Thus:

(a)    If an employee has not had any days off in the week, overtime is payable on the last two days of the week;

(b)    If an employee has the last day of the week as a day off, overtime is payable on the previous day;

(c)    If an employee has a day off in the middle of the week, but not two consecutive days, overtime is payable on the worked day following the day off as that was the earliest point at which the employer could have complied with cl 28.11(a).

466    Unlike the FWO’s approach (b) and (c) result in only a single day of overtime although this is not so in the case of (a).

467    Woolworth’s submission ignores the fact that cl 28.11(a) operates over a two week period. For example in (a), it is not the case that overtime is payable on the last two days of the first week if the employee has not had any other days off in that week. This is because the employee may receive three consecutive days off in the second week. Woolworths’ approach cannot be reconciled with the text of cl 28.11(a).

468    Woolworths submits that it is entitled to take this approach because it is supported by the Full Court’s decision in United Voice v Wilson Security Pty Ltd [2019] FCAFC 66; 269 FCR 608 (‘United Voice’). That case concerned the Security Services Industry Award 2010. Clause 21.11 of that award required an employee to work his or her ordinary hours in accordance with a roster of which advance notice had been given. The employee was rostered on to do work in excess of his ordinary hours on a 152 (4 x 38) hour roster over 4 weeks. The question was whether overtime became payable only once the 152 ordinary hours had been worked or whether the employer could choose where in the roster the ordinary hours (and hence the overtime hours) would be worked. The immediate issue was whether the employer could choose to roster the overtime on Sundays and thereby avoid having to pay a penalty rate. This was answered by the Full Court in the affirmative.

469    I do not think that United Voice says anything about the operation cl 28.11(a) for several reasons.

470    First, an important difference is that in United Voice the employee was bound to work their ordinary hours in accordance with the roster and overtime was payable for hours worked in excess of those ordinary hours. In this case, as I have explained, the roster is not directly relevant to the calculation of overtime and there is no equivalent to cl 21.11 of the Security Services Industry Award 2010.

471    Secondly, in United Voice it was possible to say that the overtime hours worked were in excess of the 152 hours even before that 152 hours had been worked (in short because ‘in excess’ did not mean ‘after’ and because the employer could fix the roster for ordinary hours). There is no corresponding concept in the case of c 28.11(a).

472    Thirdly, I was not taken to any published rosters to indicate that what Woolworths suggested had occurred in the case of any actual roster. United Voice was a case about actual rosters. I do not read United Voice as authorising, outside of a published roster structure, an employer to allocate overtime as it sees fit.

473    I therefore reject Woolworths’ approach.

474    Coles submitted that the employer could assess compensation in the most efficient manner including the most cost-effective for which it cited United Voice. It then set out two ways this might be done:

(a)    first, where an employee has two consecutive days off in one week of a given fortnight but not the other. Coles says:

(i)    if the two consecutive days off are the last two days in the fortnight, then an employer may treat the third-last day as attracting overtime.

(ii)    if the two consecutive days off fall elsewhere in the fortnight, the employer may treat the day before or after those two consecutive days off as attracting overtime.

(b)    secondly, where only single days are taken off at different points in the fortnight. If one week has more days off than the other, then two days after the first day off in that week will have overtime rates applied. If both weeks have an equal number of days off, then the two days after the first day off in the first week will have overtime rates applied.

475    Coles submitted that this approach compensated the employee for the day or days they would otherwise have had off in accordance with cl 28.11(a).

476    I do not accept this approach for the same reasons I do not accept Woolworths’ submission.

Maximum days per four week cycle

477    A series of issues were raised in FWO v Coles regarding cll 28.5 and 28.6. The parties were unable to agree on the exact wording of Issue 21. The FWO’s preferred wording was:

(a) What constitutes a specific agreement for the purposes of clauses 28.5 and 28.6 of the Retail Award?

(b) Does a specific agreement include a roster choices document (hard copy or electronic) and/or a written roster (in circumstances where the employee was responsible for rostering their own shifts)?

(c) Which party bears the onus of proof that any of the above agreements was made between the Respondent and a Salaried Employee?

478    Coles’ preferred wording was:

(a) What constitutes a specific agreement for the purposes of clauses 28.5 and 28.6 of the Retail Award?

(b) Does a specific agreement include a roster choices document (hard copy or electronic) and/or a written roster?

(c) Which party bears the onus of proof that any of the above agreements was made between the Respondent and a Salaried Employee?

479    Issue 13 in Pabalan was expressed to be equivalent to Issue 21 in FWO v Coles.

480    Issues 37 to 39 ask:

Issue 37

What is the meaning of the term “retail establishments” in cl 28.5 of the Retail Award?

Issue 38

Is the meaning of the phrase “specific agreement” in cll 28.5 and 28.6 of the Retail Award limited to the circumstances set out in cl 28.6 or are these only examples of ways in which a specific agreement may be implemented?

Issue 39

If a specific agreement exists for the purposes of clause 28.5, but the hours worked pursuant to that agreement are not pursuant to clause 28.6 (in circumstances where the Court finds that they are required to be) how is overtime to be calculated?

481    Issue 29 in Pabalan was expressed to be equivalent to Issue 38 in FWO v Coles. Issues 37 and 39 do not appear to have equivalents in Pabalan.

482    These issues did not arise in FWO v Woolworths or in Baker.

483    Clauses 28.5 and 28.6 provide:

28.5 In retail establishments employing on a regular basis 15 or more employees per week, unless specific agreement exists to the contrary between an employer and an employee, the employee will not be required to work ordinary hours on more than 19 days in each four week cycle.

28.6 Where specific agreement exists between an employer and employee, the employee may be worked on the basis of:

(a) not more than 4 hours’ work on one day in each two week cycle;

(b) not more than 6 hours’ work on one day in each week;

(c) not more than 7.6 hours’ work on any day.

484    By the time of submissions, it was no longer in dispute that cl 28.5 applied to Coles because more than 15 employees worked in each of its supermarkets. There was an issue as to what was necessary for an agreement to be reached under cl 28.5 and 28.6. For the reasons I have given previously, it is necessary for the objectively determined facts to indicate that the employee was aware in agreeing to working the suggested hours that they were foregoing a benefit under cl 28.5.

485    The first issue between the parties is whether the situations in cl 28.6 are examples of specific agreements in cl 28.5 or whether instead the clause is an exhaustive statement of the specific agreements which can be reached. Coles relies upon the word ‘may’ in cl 28.6 which it says indicates the presence of a discretion. I do not accept this submission. Read as a whole it is clear that cl 28.6 delimits the kinds of specific agreements which may be reached.

486    The second issue is how overtime is to be calculated if a specific agreement is reached for the purposes of cl 28.6 but then an employee works hours outside those contemplated by the specific agreement. The FWO did not make any submissions about this but its answers to question indicate that its position is that in this situation overtime should be calculated as if there had never been a specified agreement. I do not accept this (unexplained) position. Working hours outside the specific agreement in cl 28.5 and 28.6 does not cause the specific agreement to cease to exist. Coles submits that overtime will only apply to hours worked outside of the parameters of the specific agreement and that the employer has the ability to ‘allocate’ the overtime. While I agree with the first part of that submission, I refer to Part G where I consider the possibility of ‘allocation’.

487    The final issue is in respect of the meaning of ‘retail establishments’ for the purposes of cl 28.5. The parties held similar positions as they did on the construction of ‘retailer’ for the purposes of cl 27.2(b)(iii). For the reasons I have given previously in respect of that issue, I agree with Coles that ‘retail establishment’ is intended to refer to Coles as a retail corporate employer rather than a single store as contended for by the FWO.

Regularly working sundays

488    Issue 24 in FWO v Woolworths asks:

What is the meaning of the phrase “regularly works Sundays” in clause 28.13 of the Retail Award? In particular, does an employee regularly work Sundays:

(a) if they work three out of four Sundays in a four- week roster; or

(b) if they work 34 or more Sundays over a 12-month period?

489    Though an issue on the same topic does not arise in FWO v Coles, Issue 30 in Pabalan asks:

As a matter of construction, does an employee ‘regularly work Sundays’ within the meaning of cl 28.13(a) of the Retail Award if they work three out of four Sundays in a four-week roster period?

490    The parties in Baker in addition to adopting Issue 24 from FWO v Woolworths also identified the following further issues:

Issue 6

Does clause 28.13(a) require employees to have three consecutive days off:

(a) in a fixed four week roster period; or

(b) over any four week period regardless of when the roster period commenced and ends.

Issue 7

When should overtime be paid if an employee who regularly works Sundays does not have 3 consecutive days off?

Issue 8

For the purpose of clause 28.13(a) of the Retail Award:

(a) Where an employee works only overtime hours on a Sunday, does that Sunday count towards the number of Sundays worked?

(b) Where an employee only works hours on a Sunday that are outside the span of hours, does that Sunday count towards the number of Sundays worked?

491    Clause 28.13(a) provides:

28.13 Employees regularly working Sundays

(a) An employee who regularly works Sundays will be rostered so as to have three consecutive days off each four weeks and the consecutive days off will include Saturday and Sunday.

(b) This requirement will not apply where the employee requests in writing and the employer agrees to other arrangements which are to be recorded in the time and wages records. It cannot be made condition of employment that an employee make such a request.

(c) An employee can terminate the agreement by giving four weeks’ notice to the employer.

492    The first issue which arises concerns the word ‘regularly’.

493    The FWO submits that an employee regularly works Sunday if they work three out of every four Sundays (in either a four-week roster period or across two two-week roster periods). This was because the purpose of the clause was to ensure that at a minimum every four weeks there was at least one guaranteed weekend over a Saturday and Sunday as well as a consecutive day adjacent to the weekend. This suggested purpose is just a repetition of the outcome for which the FWO contends. As such, it does not advance debate very far.

494    Despite that, in FWO v Coles and Pabalan the parties accept the correctness of FWO’s approach. However, Woolworths does not. It submits that an employee regularly works Sundays if they work 34 or more Sundays over a 12-month period not including any Sundays they would ordinarily have worked but took leave on. Its reasons for this were three:

(a)    ‘regularly’ is undefined and takes its ordinary meaning of periodically, consistently or substantially.

(b)    Since it is undefined, its meaning has to be determined on a case-by-case basis depending on specific work patterns, especially where rosters differ in each roster period.

(c)    It has been held that the expression ‘regularly works on Sundays and public holidays’ meant on average 34 Sundays and 6 public holiday shifts each year citing O’Neill v Roy Hill Holdings Pty Ltd [2015] FWC 2461 at [24]-[35] per Commissioner Williams and ASU v Western Power Corporation [2004] AIRC 231 at [13]-[17] per Mansfield C.

495    Submissions (a) and (b) are inconsistent with submission (c).

496    Submission (c) is not correct. As resort to the two cases cited by Woolworths shows, there is a longstanding issue as to whether shift workers on 7 day shifts are to obtain an extra week of annual leave. That principle appears to have coalesced around a principle that shift workers on 7 day shifts worked 5/7th of all Sundays and hence, on average, 34 Sundays each year (although it seems to me that 5/7 of 52 is actually 37): see In Re Iron and Steel Works Employees (Australian Iron & Steel Pty Limited – Port Kembla) Award and Another Award [1965] AR 449 at 472 per Richards J; Re Shift Workers Case [1972] AR 633. Precisely how this came to be mapped on to the expression ‘regularly to work on Sundays and public holidays’ is perhaps more than a little obscure but there is an explanation in Re Shift Workers Case [1972] AR 633 for those who are very committed to understanding this issue. However, it is clear – as O’Neill v Roy Hill Holdings Pty Ltd [2015] FWC 2461 at [24]-[35] certainly shows – that this learning about regularly working Sundays is, as the FWO correctly submits, tied in a somewhat bespoke fashion to the position of shift workers. It is of no assistance in the present context. Even a cursory examination of these cases show that they are not remotely authority for the proposition that as a matter of law the expression ‘regularly works Sundays’ means on average that an employee works 34 Sundays each year.

497    I therefore do not accept Woolworths’ submission about proposition (c). I do, however, accept Woolworth’s propositions (a) and (b) which seem orthodox (and inconsistent with proposition (c)). I therefore reject the FWO’s approach which, as I have said, was not really supported by any actual argument.

498    This reasoning leads to the conclusion that whether an employee regularly worked on Sundays will turn upon the position of that employee. The present question has no answer at the level of Tier 1 and Tier 2 issues. As Woolworths correctly observes, much may depend upon individual roster patterns.

499    There are then a series of calculation questions but only in Baker. These are, first, whether the three consecutive days off which cl 28.13(a) contemplates must be taken in a fixed four-week roster period, or instead during any ‘roving’ four-week period irrespective of when the roster period commences and ends. Woolworths says the former; Mr Baker the latter.

500    Both approaches lead to anomalies. Mr Baker’s approach has the effect that the employer must roster the same three days off in every four-week period once it is first selected. I accept that this is administratively inconvenient. On the other hand, Woolworths’ approach means that an employer could give an employee the requisite days off in week 1 and then not again until week 8 which results in six weeks without a 3 day weekend. This too is not an attractive interpretation.

501    In my view, the ordinary meaning of cl 28.13 is as Mr Baker contends. The clause could have been tied to the roster periods identified in cl 28.1 but it has not been and a four week period has been selected instead.

502    This question of whether a ‘roving’ approach is to be taken also arises as a sub-issue in Pabalan and should be resolved the same way.

503    The FWO also made submissions about this issue. However, there is no such issue in its proceedings and its submissions appear detached from the litigation. I have disregarded its submissions.

504    The second issue concerns how overtime accrues if cl 28.13(a) is not complied with. Mr Baker submits that overtime accrues on the days which the employee should have had off in order for compliance with cl 28.13 to be possible. Woolworths contends for the result that overtime accrues on the fourth Sunday as well as for any hours worked in the preceding Saturday and Friday. However, it made no submissions in support of this contention.

505    This issue is structurally similar to the issue which arose under cl 28.11(a). For the same reasons I give in that section, I prefer Mr Baker’s approach.

506    The third issue was said to be whether Sundays on which an employee only works overtime count as a Sunday ‘worked’. Mr Baker submits that they do and Woolworths submits that they do not.

507    Mr Baker submits that cl 28.13(a) makes no reference to ordinary hours or overtime hours and there is no reason to import one.

508    Woolworths’ submission seems to have understood the question to be whether leave or rostered public holidays which fall on a Sunday count as a Sunday which has been worked for the purposes of cl 28.13(a). However, that is not the issue which is raised for consideration. The question is not whether leave or rostered public holidays which fall on a Sunday count for the purposes of cl 28.13(a). Rather, it is whether a Sunday which has been worked only as overtime counts for the purposes of cl 28.13(a).

509    In any event, I prefer Mr Baker’s submissions. Clause 28.13(a) observes no distinction between overtime hours and ordinary hours. The question it is concerned with is the regularity with which Sundays are worked. Why a particular Sunday comes to be worked does not matter.

Overtime and the Threshold for Further Overtime

510    An issue arose only in the class actions as to whether hours and days which are already counted as overtime count toward the threshold for further overtime entitlements. Issues 1 and 2 in Baker ask:

Issue 1

If an employee works outside of the span of hours prescribed by clause 27.2 or the roster conditions prescribed in clause 27 and 28, are those hours treated as:

(a) Overtime hours (and therefore not counted as ordinary hours for the purposes of other provisions of the Retail Award which limit the number of ordinary hours that can be worked); or

(b) Ordinary hours, but paid for at a penalty rate which is equivalent to the overtime rate of pay (and therefore counted for the purposes of other provisions of the Retail Award which limit the number of ordinary hours that can be worked).

Issue 2

For the purposes of cls 27.3(a), 28.5, 28.10 and 28.11 of the Retail Award, if the Court accepts that for issue 1 option (b) is correct, then where an employee worked only ordinary hours paid at overtime rates on a day, do those hours count towards the maximum “ordinary hours” or days on which “ordinary hours” may be worked?

511    In Pabalan, Issue 15 asks:

In relation to the hours which are to be paid at overtime rates by operation of clause 29.2(a) of the Retail Award:

(a) Are all such hours, except hours worked in excess of 152 hours in a four- week roster cycle, ‘ordinary hours’ for the purposes of the Retail Award; or

(b) Are all such hours ‘overtime hours’ for the purposes of the Retail Award?

512    To return to the operation of overtime under the Award, cl 29.2(a) provides:

29.2 Overtime

(a) Hours worked in excess of the ordinary hours of work, outside the span of hours (excluding shiftwork),or roster conditions prescribed in clauses 27 and 28 are to be paid at time and a half for the first three hours and double time thereafter.

513    There are three concepts here:

(a)    Hours worked in excess of ordinary hours;

(b)    Hours worked outside the span of hours; and

(c)    Hours worked outside the roster conditions specified in clauses 27 and 28.

514    When any of these triggers is engaged, the effect of cl 29.2(a) is that overtime becomes payable. The lead applicants in the class actions submit that if an hour is worked which triggers an entitlement to overtime then so long as the hour was worked during the span of hours, the hour does not cease to be an ordinary hour.

515    It is unlikely that a single reading of the previous sentence is likely to mean much to the reader. Helpful in unravelling its obscurities is to be reminded of two other aspects of the Award. The first is that the span of hours is defined in cl 27.2. Concentrating on the central definition in cl 27.2 and leaving aside as not presently germane the various exceptions to which it is subject, this clause defines the span of hours in these terms:

516    Thus, one aspect of the lead applicants’ submission is that if the overtime entitlements in (a) or (c) above are triggered but the hour which is that trigger nevertheless lies within the span of hours in this table, then that hour will retain its nature as an ordinary hour, come what may. Why this matters, requires some explanation.

517    Consider, for example, an employee on a weekly 38 hour roster (under cl 28.1(a)) who works 7.6 hours on Monday to Friday starting at 9 am and finishing at 6.36 pm (including an unpaid one hour meal break). If this employee does an additional six hours of work from 9 am to 4 pm on Saturday (with an unpaid meal break) then those six hours will be in excess of the 38 hour week specified in cl 28.1(a) and hence they can only be hours which have been worked ‘in excess of the ordinary hours of work’ within the meaning of cl 29.2(a). They therefore attract an entitlement to be paid overtime under the first limb (limb (a) above) of cl 29.2(a).

518    Yet, these six hours of work nevertheless remain within the span of hours set out in cl 27.2(a). Because the six hours are within the span of hours, trigger (b) in cl 29.2(a) is not activated (i.e., working outside the span of hours). However, this has no significance for the six hours in question – overtime continues to be payable because the six hours remains in excess of ordinary hours worked under limb (a) of cl 27.2(a).

519    None of this is in dispute. What is in dispute instead is whether the six hours worked on the Saturday is to be counted as overtime hours or ordinary hours for the purposes of other overtime rules. For example, cl 28.10 provides:

Ordinary hours will be worked on not more than five days in each week, provided that if ordinary hours are worked on six days in one week, ordinary hours in the following week will be worked on no more than four days.

520    The dispute between the parties resolves to this question: do the six hours worked on the Saturday count for the purposes of this rule or not? The answer to this depends on whether the six hours worked on the Saturday can be classified as ordinary hours. If they can be then cl 28.10 will be triggered in addition to cl 28.1(a). The effect of cl 28.10 being triggered is to require the following week to be worked on only four days (and failing that overtime will be payable in that second week once it becomes impossible to ensure that only four days in that week are worked).

521    On the other hand, if the six hours worked on Saturday are not ordinary hours, then cl 28.10 will not be triggered.

522    I do not accept the lead applicants’ submission about this for two reasons. First, the distinction between overtime and ordinary hours is a long-recognised one: Bluescope Steel (AIS) Pty Ltd v Australian Workers Union [2019] FCAFC 84; 270 FCR 359 at [38] per Allsop CJ and Rangiah J at [356]-[358]. Unless that well-established distinction was displaced by the language of the Award, I see no reason why it would not apply to the present circumstance in the orthodox way.

523    Ms Pabalan sought to show that the distinction had been displaced by the language of cl 29.2(a). She submitted that the idea that any hour to which cl 29.2(a) applies could not be an ordinary hour sat uncomfortably with its terms. As I understood it, the main point here was that work done within the span of hours was work done during ordinary hours. If that were so, I would indeed accept that an overtime hour triggered by an employee working in excess of ordinary hours but nevertheless within the span of hours would be an ordinary hour. The problem with this submission is that there is nothing in the Award which says that work done during the span of hours is work done during ordinary hours. In effect, Ms Pabalan’s submission seeks to define Coles out of the debate by defining work done during the span of hours as being ordinary hours. However, the Award does not say this.

524    Secondly, if overtime hours are permitted to serve as ordinary hours then the same hours worked may trigger multiple overtime entitlements. In the example above, it will be seen that the employee is compensated for working on the Saturday by being paid overtime for that day. If that day is counted as an ordinary hour then this triggers the operation of cl 28.10 which will in turn require that the employee only work 4 days in the following week. For the same six hours of work, the employee therefore collects twice:

(a)    Six hours of overtime for the Saturday paid at time and a half for the first 3 hours and double time for the next 3 hours ostensibly to compensate the employee for the antisocial aspects of being required to work an additional six hours on top of the ordinary 38 hour week.

(b)    A four day week in the following week as compensation for being required to work for six days the week before.

525    I accept the submissions of Coles and Woolworths that this involves double compensation. Without clear language, I do not accept that the Award should be construed in this fashion.

526    Conclusion

527    I do not see language in cl 29.2(a) that displaces the ordinary distinction between ordinary hours and overtime and I do not see language sufficiently clear to justify double compensation. I therefore reject the lead applicants’ submissions about this.

D.4 Remaining Entitlements

528    Outside of the construction questions arising in connection with extended ordinary hours, the short break penalty and overtime, the parties have raised a series of discrete debates regarding various other entitlements under the Award.

Meal allowance entitlement

529    Issues 31(a), 32(a) and 33 in FWO v Woolworths, which were adopted in Baker, ask:

Issue 31

(a) What is the meaning of the phrase “required to work” in clause 20.1(a) of the Retail Award? In particular, does it:

(i) include where any of the Relevant Work Circumstances exist; or

(ii) mean where an employer authoritatively or imperatively dictates or demands the employee work additional hours?

Issue 32

(a) What is the meaning of the phrase “ordinary time of ending work” within clause 20.1(a) of the Retail Award? In particular, does it mean:

(i) the “ceasing time of work” on a particular day as identified in an employee’s roster in clause 28.14(a)(iii) of the Retail Award; or

(ii) the time the employee agreed to finish work on a particular day, where this was not published or varied in accordance with clause 28.14 of the Retail Award? or

(iii) the time that the employee customarily finishes work?

Issue 33

Can an employee have more than 24 hours’ notice of being required to work more than one hour of overtime after their ordinary time of ending work by reason of their having knowledge that they consistently worked more than one hour after their rostered end time?

530    In FWO v Coles, Issues 60 to 63 are framed as follows:

Issue 60

What is the meaning of the phrase “required to work” in cl 20.1(a) of the Retail Award? In particular, does it:

(a) only mean the circumstance where an employee is directed to work overtime; or

(b) can it also include circumstances where:

(i) an employee works overtime at their own initiative; or

(ii) accepts or agrees to an offer by the employer to work overtime; or

(c) can it also include any of the Relevant Work Circumstances?

Issue 61

What is the meaning of the phrase “ordinary time of ending work” in cl 20.1(a) of the Retail Award? In particular, does it mean:

(a) the “ceasing time of work” on a particular day as recorded in an employee’s roster pursuant to cl 28.14(a)(iii) of the Retail Award; or

(b) the time that the employee customarily finishes work?

Issue 62

Does a Salaried Employee have more than 24 hours’ notice of being required to work more than one hour of overtime after their ordinary time of ending work by reason of them:

(a) being responsible for setting their own roster; and

(b) setting their own roster more than 24 hours before any day on which they worked more than one hour of overtime after their ordinary time of ending work and the roster provided for that Salaried Employee to work more than one hour of overtime after their ordinary time of ending work?

Issue 63

Does a Salaried Employee, for the purpose of clause 20.1(a) of the Retail Award, have more than 24 hours’ notice of being required to work more than one hour of overtime after their ordinary time of ending work by reason of them having knowledge, based on their usual pattern of work, that they would likely work more than one hour of overtime after their ordinary time of ending work?

531    Issues 19 and 20 in Pabalan are expressed to be equivalent to Issues 62 and 63 in FWO v Coles. Issues 17 and 18 in Pabalan are said to be similar but not identical to Issues 61 and 62 in FWO v Coles. Issues 17 and 18 in Pabalan are framed as follows:

Issue 17

What is the meaning of the phrase “required to work” in cl 20.1(a) of the Retail Award? In particular, does it:

(a) only mean the circumstance where an employee is directed to work overtime; or

(b) can it also include circumstances where an employee:

(i) works overtime at their own initiative; or

(ii) accepts or agrees to an offer by the employer to work overtime; or

(c) can it also include circumstances where an employee works hours necessary for them to complete the full and proper performance of the duties that the employer required them to complete?

Issue 18

What is the meaning of the phrase “ordinary time of ending work” in cl 20.1(a) of the Retail Award? In particular, does it mean:

(a) the rostered finish time on a particular day as recorded in an employee’s roster pursuant to cl 28.14(a)(iii) of the Retail Award; or

(b) the time that the employee customarily finishes work; or

(c) some other time (and if so, what other time)?

532    Clause 20.1 provides:

20.1 Meal Allowance

(a) An employee required to work more than one hour of overtime after the employee’s ordinary time of ending work, without being given 24 hours’ notice, will be either provided with a meal or paid a meal allowance of $18.87. Where such overtime work exceeds four hours a further meal allowance of $17.10 will be paid.

(b) No meal allowance will be payable where an employee could reasonably return home for a meal within the period allowed.

533    There are really only two issues here: :

(a)    The meaning of ‘required’;

(b)    The meaning of ‘the employee’s ordinary time of ending work’.

534    The parties join issue about whether the working of flexible hours by an employee is caught by the word ‘required’. I have explained how these issues are to be handled under the topic of authorisation previously. Flexible hours worked for reasons of personal convenience do not trigger an overtime allowance. Since no overtime is payable in that situation the meal allowance is never triggered. At least insofar as flexible working hours are concerned, the meaning of the word ‘required’ never arises.

535    It does arise, however, when an employee works more than one hour of overtime after the employee’s ordinary time of ending work. In such a case, the authorisation is provided by the contracts of employment which required each of the Calculation Employees to work reasonable overtime.

536    The question then arises as to what the words ‘the employee’s ordinary time of ending work’ mean. In my view, this simply refers to when the employee would have finished on the day in question but for the additional hour or hours of overtime. ‘Ordinary’ is the counterpoint of overtime. Thus ‘ordinary time of ending work’ means the time at which the employee would have finished but for the overtime. For example, if the employee otherwise worked their rostered hours then it will be the rostered end time. If the employee flexibly altered their hours of work, it will be the finish time flexibly thus altered.

537    I have already explained that an employee who flexibly alters their own hours of work so that they work different times to those in a published roster does not merely thereby attract an entitlement to overtime under cl 29.2(a). This is because it is not a roster condition that an employee work the hours for which they have been rostered on in a published roster.

538    On the other hand, it may be the case that cl 29.2(a) could still be triggered where an employee flexibly alters their hours of work. This may occur in two circumstances:

(a)    where the employee alters their working hours such that they are no longer within the spread of hours; or

(b)    where the employee alters their working hours in a way which has the effect that they work outside one of the roster conditions in cll 27 or 28.

539    Woolworths submits that the fact that an employee has adjusted their own working hours to meet their own convenience means that it cannot be said that Woolworths had authoritatively given or imperatively dictated or demanded that the employee act in this fashion. I accept this submission. Clause 29.2 is only enlivened where the employer directs the employee to do the overtime. Ordinarily, self-authorisation is not permissible. However, earlier in these reasons I have accepted that where the employee did reasonable extra hours on top of their ordinary hours, then Woolworths’ authorisation for the overtime was to be found in the contracts of employment.

540    This reasoning cannot apply, however, to the situation where an employee flexibly alters their own working hours. The flexible alteration of working hours is not the performance of reasonable overtime and hence authority from Woolworths for it cannot be sourced from the contracts of employment.

541    Thus the unilateral alteration by an employee of their own working hours for reasons of personal convenience cannot trigger an entitlement to overtime under cl 29.2(a). Once that conclusion is reached, it follows that the meal allowance does not become payable in that circumstance.

Annual leave loading entitlement

542    This issue arises in the class actions only. Issue 11 in Baker asks:

In respect of Retail Award cl 32.3(b), was the applicable annual leave loading:

(a) 17.5% for annual leave taken for hours falling on weekdays and the relevant weekend penalty loading for annual leave taken for hours falling on weekends; or

(b) either 17.5% on all days or 0% loading on weekdays and the relevant weekend penalty loading only on weekends, whichever is greater?

543    Issue 21 in Pabalan asks:

As a matter of construction, for salaried employees who would have worked on day work only had they not been on leave, how is the loading of ‘17.5% or the relevant weekend penalty rates’ referred to at cl 32.3(b)(i) of the Retail Award to be applied?

Specifically (and having regard to the use of the words ‘whichever is greater’ in clause 32.3(b)(i) of the Retail Award):

(a) is the payment to be:

(i) a loading of 17.5% of the minimum hourly rate of pay calculated by reference to clause 17 of the Retail Award for all ordinary hours that would have been worked but for the period of annual leave; or

(ii) the payment of the minimum hourly rates of pay calculated by reference to clause 17 of the Retail Award for all ordinary hours that would have been worked but for the period of annual leave and any weekend penalty rates that would have applied in the period of annual leave; or

(b) is the payment to be:

(i) a loading of 17.5% of the minimum hourly rates of pay calculated by reference to clause 17 of the Retail Award for all ordinary hours that would have been worked but for the period of annual leave on Monday to Friday; and

(ii) the payment of any weekend penalty rates that would have applied in the period of annual leave to hours that would have been worked on the weekend?

544    Clause 32.3 provides:

32.3 Annual leave loading

(a) During a period of annual leave an employee will receive a loading calculated on the rate of wage prescribed in clause 17—Minimum weekly wages of this award. Annual leave loading is payable on leave accrued.

(b) The loading will be as follows:

(i) Day work

Employees who would have worked on day work only had they not been on leave—17.5% or the relevant weekend penalty rates, whichever is the greater but not both.

(ii) Shiftwork

Employees who would have worked on shiftwork had they not been on leave—a loading of17.5% or the shift loading (including relevant weekend penalty rates) whichever is the greater but not both.

545    Mr Baker and Ms Pabalan submit that cl 32.3(b)(i) means that the leave loading will be 17.5% annual leave taken for hours worked on weekdays and at the relevant weekend loading for annual leave taken for hours worked on the weekend. The rate for Saturday is 25% and the rates for Sunday range between 50% and 95%.

546    Woolworths and Coles submit that the clause operates so that the loading is 17.5% on all days or 0% loading on weekdays and the relevant weekend penalty loading only on weekends, whichever is greater.

547    I do not accept this submission. It is an inconceivable reading of cl 32.3(b)(i) which results in the loading being 0%.

548    I accept the submissions made on behalf of Mr Baker and Ms Pabalan.

Special clothing allowance entitlement

549    This issue concerns only Pabalan. Issues 22 to 24 ask:

Issue 22

As a matter of construction, do the phrases ‘special clothing’ and ‘special uniform’ as used at cl 20.2 of the Retail Award include a reference to branded clothing items, but exclude all non-branded items, generic items or other items of clothing that an employee could reasonably be expected to own?

Issue 23

As a matter of construction, and to the extent that Coles:

(a) required all supermarket-based employees to wear ‘special clothing’ within the meaning of 20.2(a) of the Retail Award; and

(b) supplied or paid for that ‘special clothing’, did the reimbursement obligation referred to in that clause not apply?

Issue 24

In relation to salaried full-time employees, does the allowance under clause 20.2(b) of the Retail Award apply in circumstances where an employee is on leave for an entire week?

550    Clause 20.2 provides:

20.2 Special clothing

(a) Where the employer requires an employee to wear any protective or special clothing such as a uniform, dress or other clothing then the employer will reimburse the employee for any cost of purchasing such clothing and the cost of replacement items, when replacement is due to normal wear and tear. This provision will not apply where the special clothing is supplied and/or paid for by the employer.

(b) Where an employee is required to launder any special uniform, dress or other clothing, the employee will be paid the following applicable allowance:

(i) For a full-time employee—$6.25 per week;

(ii) For a part-time or casual employee—$1.25 per shift.

551    Although there were additional issues about this clause earlier in the litigation, there remains now only one: whether ‘special uniform, dress or other clothing’ includes non-branded clothing and generic clothing items. For example, an employer might provide its employees with branded shirts but might then require the employees to wear unbranded or generic black trousers with that branded shirt. The issue which is said to arise is whether Ms Pabalan is entitled to the allowance in cl 20.2(b) in the case of such unbranded or generic clothing.

552    It seems clear that the clothing referred to in cl 20.2(b) is the same as the clothing referred to in cl 20.2(a). Clause 20.2(a) will be enlivened when:

(a)    There is a requirement by an employer of an employee; and

(b)    The requirement is that the employee wear special or protective clothing.

553    The clause then gives as examples of special or protective clothing ‘a uniform, dress or other clothing’. I accept Coles’ submission that the ‘uniform, dress or other clothing’ referred to in cl 20.2(b) and in respect of which the allowance is sought, must be special or protective within the meaning of cl 20.2(a).

554    There can be no suggestion that the non-branded or generic items of clothing are ‘protective’ within the meaning cl 20.2(a).

555    It follows that the issue is solely whether the uniform, dress or other clothing in respect of which the allowance is payable is ‘special’ within the meaning of cl 20.2(a). If it is, then the allowance will be payable.

556    One implication of that observation is that Ms Pabalan’s submission that the question is to be resolved by reference to the construction of the word ‘dress’ cannot be correct. Nor do I accept her submission that her submission derives support from the Full Bench of the Fair Work Commission’s decision in Retail and Fast Food Workers Union Inc v Woolworths Group Ltd; Woolworths (South Australia) Pty Ltd v SDA; Shop, Distributive and Allied Employees Association; Australian Workers’ Union; Australasian Meat Industry Employees Union [2019] FWCFB 2355; 289 IR 214. Whilst the clause of the enterprise agreement involved in that case is similarly worded to the clause in this case, it is apparent that the Full Bench was influenced in its interpretation by representations Woolworths had made to employees prior to the holding of a vote on the issue.

Requirement for fortnightly payments

557    Clause 23.1 of the Award provides:

Wages will be paid weekly or fortnightly according to the actual hours worked each week or fortnight, or may be averaged over a period of a fortnight.

558    The parties in FWO v Woolworths agree that Issue 50 concerns this clause. Issue 50 is in these terms:

‘Were the Calculation Employees paid weekly or fortnightly for their actual hours of work in accordance with cl 23.1 of the Retail Award during the Calculation Period?’

559    The FWO’s only submission about this was this:

‘No. The Statement of Agreed Facts about Woolworths Records (tab 012 to 0014) shows the actual hours worked by each Calculation Employee each fortnight. The payslips issued to each Calculation Employee during the Calculation Period identify the amounts which were paid to each employee each fortnight.50 There is no correlation.’

560    Footnote 50 is in these terms:

‘FWO’s Tender Bundle (Volume 4 of the Court Book) from tab 0003 to tab 0924.’

561    Woolworths made no submissions on this topic.

562    The FWO’s submission has not been advanced in a sufficiently developed form to warrant consideration and is rejected for that reason.

Requirement for monthly payments

563    I have briefly touched upon the operation of clause 23 of the Award in the section of these reasons dealing with set-off. Clause 23 provides:

23. Payment of wages

23.1 Wages will be paid weekly or fortnightly according to the actual hours worked each week or fortnight, or may be averaged over a period of a fortnight.

23.2 All wages shall be paid on a regular pay day. The employer must notify the employee in writing as to which day is the pay day. Where for any reason the employer wishes to change the pay day, then the employer shall provide at least 4 weeks’ written notice to the employee of such change.

23.3 An enterprise which prior to the 1st January 2010,paid particular classifications of its employees on a monthly pay cycle may continue to pay these particular classifications of employees on a monthly pay cycle. However no employee classified at level 3 or below under this Award may be paid on a monthly pay cycle and must be paid either weekly or fortnightly.

23.4 Payment on termination of employment

(a) The employer must pay an employee no later than 7 days after the day on which the employee’s employment terminates:

(i) the employee’s wages under this award for any complete or incomplete pay period up to the end of the day of termination; and

(ii) all other amounts that are due to the employee under this award and the NES.

(b) The requirement to pay wages and other amounts under paragraph (a) is subject to further order of the Commission and the employer making deductions authorised by this award or the Act.

Note 1:Section 117(2) of the Act provides that an employer must not terminate an employee’s employment unless the employer has given the employee the required minimum period of notice or “has paid” to the employee payment instead of giving notice.

Note 2:Paragraph (b) allows the Commission to make an order delaying the requirement to make a payment under this clause. For example, the Commission could make an order delaying the requirement to pay redundancy pay if an employer makes an application under s.120 of the Act for the Commission to reduce the amount of redundancy pay an employee is entitled to under the NES.

Note 3:State and Territory long service leave laws or long service leave entitlements under s.113 of the Act, may require an employer to pay an employee for accrued long service leave on the day on which the employee’s employment terminates or shortly after.

564    In FWO v Coles, Issues 66 and 68 asks:

Issue 66

Does clause 23.1 of the Retail Award impose an obligation on an employer:

(a) with respect to the timing of the payment of wages to an employee only; or

(b) to pay an employee pursuant to the Retail Award in full in respect of the actual hours worked?

Issue 68

If clause 23 requires an employer to pay wages to an employee according to the actual hours worked each month pursuant to the Retail Award (including any applicable penalty rates, overtime or allowances) and is not limited to imposing an obligation in relation to timing of payments only, then is the obligation under clause 23 satisfied by paying employees monthly in accordance with the obligations in the employment contract (where such contract contains terms providing for a valid set off clause), even where payment under such clause would not meet the accrued entitlements for that period?

565    The parties were unable to agree on the exact wording of Issue 67. The FWO’s preferred wording was:

If clause 23.1 of the Retail Award does impose an obligation on an employer to pay an employee in respect of the actual hours worked pursuant to the Retail Award (and not simply with respect to the timing of the payment of wages to an employee only), do clause 23.3 of the Retail Award and s 323 of the FW Act extend this obligation to employees who are paid monthly?

566    Coles’ preferred wording was:

If clause 23.1 of the Retail Award does impose an obligation on an employer to pay an employee in respect of the actual hours worked pursuant to the Retail Award (and not simply with respect to the timing of the payment of wages to an employee only):

(a) does clause 23.1 apply in respect of an employee who is paid monthly (as opposed to those who are paid weekly or fortnightly); or

(b) does clause 23.2 alone apply in respect of an employee who is paid monthly?

(c) if only clause 23.3 applies to Coles, does it impose an obligation on an employer to pay an employee pursuant to the Retail Award (and not simply with respect to the timing of the payment of wages to an employee only)?

567    The FWO submits that Coles has failed to comply with cl 23.1 because it had not paid the salaried employees for their ‘actual hours worked’. Coles on the other hand, said that cl 23.1 was not applicable and that cl 23.3 was instead applicable and that, at any rate, the clauses were only concerned with frequency and not the actual amounts paid.

568    What the parties’ submissions do not attempt to explain is why this issue matters. Since the reasons why the debate matters have some bearing on its outcome some explanation is called for. It will be recalled from the section of these reasons dealing with set-off that I have concluded that an employer is only permitted to set off over-Award salary payments against obligations arising under the Award within the same pay period. Put another way, an obligation to pay overtime in one payment cycle cannot be set off against payments made in excess of Award obligations in a later (or earlier) payment cycle. Both Coles and Woolworths’ letters of employment sought to achieve this kind of set-off outside of a payment cycle. I have read down their letters of employment to limit any set-off to within the same payment cycle.

569    The payment cycle used by Coles for its salaried managers was a monthly one. The effect of my earlier conclusion is that in a single monthly payment cycle Coles is permitted to set-off its obligations under the Award against the total amounts paid by Coles in that month. In practical terms this will mean that the amount by which Coles’ pays a monthly salary to its salaried managers exceeds the monthly minimum wage, the total of the remaining monthly surplus will be available to be set off against any other obligations it has to make other payments under the Award.

570    I reached this conclusion about the operation of the employment contracts on the basis of s 323 which is set out above but is worth setting out again for the sake of convenience at this point:

323  Method and frequency of payment

 (1) An employer must pay an employee amounts payable to the employee in relation to the performance of work:

 (a) in full (except as provided by section 324); and

 (b) in money by one, or a combination, of the methods referred to in subsection (2); and

 (c) at least monthly.

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

Note 2: Amounts referred to in this subsection include the following if they become payable during a relevant period:

(a) incentive-based payments and bonuses;

(b) loadings;

(c) monetary allowances;

(d) overtime or penalty rates;

(e) leave payments.

 (2) The methods are as follows:

(a) cash;

(b) cheque, money order, postal order or similar order, payable to the employee;

(c) the use of an electronic funds transfer system to credit an account held by the employee;

(d) a method authorised under a modern award or an enterprise agreement.

 (3) Despite paragraph (1)(b), if a modern award or an enterprise agreement specifies a particular method by which the money must be paid, then the employer must pay the money by that method.

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

571    My reasoning was that s 323(1) requires the employer to pay amounts which are payable at least monthly (s 323(1)(a)), to do so in full (s 323(1)(a)) and to include in the payment loadings, overtime rates and penalty rates (note 2). Section 323(1) operates upon ‘amounts’ which it assumes are ‘payable’ and erects upon them a monetary obligation to pay those amounts in full and in cash by the methods specified in s 323(2). Further, Note 2 clarifies that amounts are to be paid in that manner if they become ‘payable during a relevant period’. The requirement imposed by s 323(1) for payable amounts to be paid in full was recognised and reiterated by the Full Court in the recent decision of Australian Workers’ Union v UGL Resources (Contracting) Pty Ltd [2025] FCAFC 107 at [81] per Raper, Dowling and Longbottom JJ.

572    The point for present purposes is that s 323(1) operates on amounts which are already payable, regulating only the timing and manner of their payment. It is, therefore, to matters outside of s 323(1) that one must look to find legal rules which operate to make amounts ‘payable’ and therefore susceptible to being picked by s 323(1).

573    Usually, it will be the contract of employment or any relevant industrial instrument which makes wages payable in this sense. In some cases (and in this case), the contract and the Award can make the same sum ‘payable’ for the purposes of s 323(1). For example, Coles had a contractual obligation to pay monthly salary payments which arose by the operation of the contracts of employment. But it also had an obligation to pay the minimum wage under the Award. In that sense, the minimum wage component of its salary payments was ‘payable’ for the purposes of s 323(1) both under the contract of employment and the Award. The amount by which the salary exceeded the minimum wage was probably payable under the contract and not under the Award (although it is not necessary to reach a view about that).

574    Because Coles erroneously approached the operation of its letters of employment on the basis that it could set-off its obligations under the Award against the annual amount by which its salary payments exceeded the minimum Award wage, this has the consequence that there will be employees who, in a particular payment month, will have been underpaid. As I have explained at the outset of the reasons, it will be necessary for one such individual to be identified in due course.

575    The current dispute about cl 23 takes place against that backdrop. The failure by Coles to pay overtime in the fashion indicated above will have constituted a contravention of cl 29.2(a):

29.2 Overtime

(a) Hours worked in excess of the ordinary hours of work, outside the span of hours (excluding shiftwork),or roster conditions prescribed in clauses 27 and 28 are to be paid at time and a half for the first three hours and double time thereafter.

576    Because the Award is a ‘modern award’ this also entails that Coles will have, on each occasion, failed to comply with s 45 of the FW Act which provides that ‘A person must not contravene a term of a modern award’. This has two consequences. The first flows from s 45’s status as a civil penalty provision. Each failure to pay overtime will potentially expose Coles to a civil penalty under s 545(1). The second flows from s 545(2)(b) which authorises the Court potentially to award compensation.

577    What the FWO now seeks is to increase the number of contraventions. This it does by submitting that each failure to pay overtime (or any other allowance) will also have resulted in a contravention of cl 23.1 (set out above). The FWO reads that clause as requiring a payment in each week or fortnight of the amounts actually due to the employee. It says this flows from the words in cl 23.1 ‘Wages will be paid…according to the actual hours worked each week or fortnight…’ The FWO says that those words show that cl 23.1 is not just about the timing or periodicity of the payments but about what is to be paid, that is to say, wages calculated ‘according to the actual hours worked’.

578    If this is correct – and Coles submits that it is not – it will entail that in addition to the primary contravention constituted by the failure to pay a particular entitlement in a given pay cycle under the Award – there will be a secondary contravention at the end of each pay cycle when Coles fails to pay on the pay day specified in cl 23.2 the full amount of the entitlements due to the employee for that pay cycle.

579    There are some points to make about this debate.

580    The first is that this issue is probably irrelevant to any issue of compensation under s 545(2)(b). If the employee has been underpaid in a pay cycle under cl 29.2(a) then he or she may well be entitled to be compensated for that under s 545. But it is difficult to see that he or she will be entitled to any more compensation just because the same amount was also not paid under cl 23.1.

581    It follows that the FWO’s contentions are likely limited in their relevance to the question of an appropriate civil penalty and, more proximately, to ascertaining the number of contraventions.

582    Secondly, in terms of assessing any relevant penalty, it is quite likely that any additional alleged contravention of cl 23.1 is likely to have little impact on the size of that penalty. For example, any additional contravention of cl 23.1:

(a)    does not increase the harm to any employee which did not already exist as a result of the failure to pay the actual entitlement involved (for example, overtime under cl 29.2(a)); and

(b)    does not throw additional light on the wrongdoing involved. The difficulties in the case from Coles’ perspective all flow from an overly ambitious effort to achieve set off outside a relevant pay period. I have concluded that this was prevented by s 323(1). On the FWO’s present argument, it may also have been prevented by cl 23.1. However, that the set-off arrangements were inconsistent not only with s 323(1) but also cl 23.1 does not seem to increase the objective wrongdoing involved.

583    Thirdly, if the effect of cl 23.1 is to create an additional contravention on each pay day where Coles has failed to pay an amount becoming payable during the relevant corresponding pay cycle, it seems highly likely that this will all form part of a single course of conduct. Whilst I would not go so far as to say that cl 23.1 is inevitably going to turn out to be of marginal relevance, there are good reasons to apprehend that it may be a small piece in the overall puzzle.

584    It is perhaps the modest relevance of this issue which explains why neither party sought to explain why it mattered.

585    Coles seeks to resist the FWO’s attempts to utilise cl 23.1. It makes three submissions:

(a)    first, cl 23.1 does not apply to Coles insofar as its salaried employees are concerned because its situation is expressly governed by cl 23.3;

(b)    secondly, unlike cl 23.1, cl 23.3 does not require the wages to be paid ‘according to the actual hours worked’. Thus cl 23.3 cannot make the monthly wages due an amount payable for the purposes of s 323(1); and

(c)    thirdly, alternatively, if cl 23.3 is subject to the same strictures as cl 23.1, then cl 23.1 construed imposes a timing obligation only and does not provide the source of the underlying payment obligations.

First submission: does cl 23.1 apply to Coles in relation to its salaried employees?

586    It is not in dispute that Coles paid its salaried employees on a monthly pay cycle prior to 1 January 2010. Literally, cl 23.1 does not countenance the payment of employees on a monthly basis. The situation is therefore governed by cl 23.3. Coles is therefore correct on the first issue.

Second submission: is cl 23.3 subject to the same limitations as cl 23.1?

587    There are three situations dealt with in cl 23 on the topic of monthly payments:

(a)    employees paid on a monthly cycle prior to 1 January 2010;

(b)    employees paid on a monthly cycle prior to 1 January 2010 who are classified at level 3 or below;

(c)    employees paid on a weekly or fortnightly cycle at any time not being (a) or (b).

588    The situations in (a) and (b) are governed by cl 23.3. The situation in (c) is governed by cl 23.1.

589    Coles draws attention to the fact that the payments contemplated by cl 23.3 are not subject to the same requirements as they are in cl 23.1. To be specific, there is missing from cl 23.3 any requirement that the wages be paid ‘according to the actual hours worked’. Thus, Coles submits that, whatever those words do in cl 23.1, any such effect is missing from cl 23.3.

590    I would reject Coles’ submission about this because it generates an unacceptably anomalous operation for cl 23.3 in the case of employees who are classified at or below level 3. Clause 23.3 requires that these employees must be paid on a fortnightly or weekly basis. But, unlike cl 23.1, it imposes no obligation upon a retailer that they should be paid ‘according to the actual hours worked’. If Coles’ submission is correct then it would appear that employees who have always been paid on a weekly or fortnightly pay cycle must be paid ‘according to the actual hours worked’ (under cl 23.1) but employees who were paid on a monthly basis prior to 1 January 2010 but who are classified at level 3 or lower must be paid on a weekly or fortnightly basis but this need not be ‘according to the actual hours worked’. This anomalous outcome arises because these employees are only subject to a weekly or fortnightly pay cycle by force of cl 23.3 and the words ‘according to the actual hours worked’ are missing from cl 23.3.

591    The anomaly can be avoided by reading cl 23.3 as a proviso to cl 23.1. Once that position is reached, the payments it is referring to are the same as the payments referred to in cl 23.1. As such, those payments are subject to the same limitations as those in clause 23.1 and, in particular, must be paid ‘according to the actual hours worked’.

592    The consequence of this is that whilst Coles is correct that its situation is governed by cl 23.3 this does not entail that the words ‘according to the actual hours worked’ are not to be applied. The question then becomes whether those words have the effect for which the FWO contends (and Coles denies).

Third submission: is cl 23.1 concerned with timing/periodicity only or does it instead make wages payable?

593    I have explained above in the section dealing with set-off that s 323(1) takes as its point of departure some pre-existing payable amount and that what makes that amount payable will either be the contract, the Award or both.

594    It is useful to begin with the obligation to pay the minimum wage. For adults the minimum weekly wage is set by cl 17.1 which is headed ‘Minimum weekly wages’. However, this is merely a table and does not require an employer to pay anything. Clause 28.1 requires a full-time employee to be rostered, on average, for 38 hours per week. Combining clause 28.1 with cl 17.1 it is possible to determine a daily wage for a full-time employee. Nevertheless, these provisions do not make anything payable because the concept of the employee having done any work has not yet arrived.

595    It is only at cl 23.1 that these concepts are joined together. Whilst Coles submits that this clause only regulates the timing of payments (or as I would prefer, their periodicity), it fails to identify any other clause in the Award where the amount of work done by an employee is used as the basis for calculating a wage.

596    Far from being peripheral, the words ‘according to the actual hours worked’ in cl 23.1 are the pivotal provisions which brings the actual hours worked by an employee into play. For example, if the employee only works for half the hours (and leaving aside for the sake of argument leave entitlements and so forth), the effect of cl 23.1 is that the employer is only obliged to pay for half the work done.

597    I therefore do not accept that cl 23.1 is only about periodicity. It is the provision of the Award which makes an actual amount ‘payable’ and on to which s 323(1) then attaches.

Conclusion

598    The FWO is correct that each time Coles failed to pay an entitlement under the Award in a pay period, it also contravened cl 23.1.

PART E: PART-TIME EMPLOYEES

E.1 FWO v Woolworths

599    Issues 18 to 20 in FWO v Woolworths relate to part-time employees:

Issue 18

Does clause 29.2(a) of the Retail Award apply to part-time employees?

Issue 19

Does clause 28 of the Retail Award, and, in particular, do clauses 28.5, 28.10, 28.11, 28.12, 28.13, 28.14, apply to part-time employees?

Issue 20

Is a part-time employee entitled to be paid overtime when they work hours which are different to, but not in excess of, the employee’s regular pattern of work or their rostered hours?

600    These issues do not arise in any of the other proceedings. The FWO contends that part-time employees are covered by cl 29.2(a) as well as cl 29.2(b) because the two clauses do slightly different things. The parties do not identify any part-time employees who are affected by this debate. The issue therefore does not arise. To the extent that it matters, the FWO’s position seems wrong.

E.2 FWO v Coles

601    The parties in FWO v Coles raised a set of issues relating to part-time employees:

Issue 46

(a) What constitutes an agreement in writing for the purpose of clauses 12.2 of the Retail Award?

(b) What constitutes an agreement made in writing for the purpose of clause 12.3 of the Retail Award?

Issue 48

For the purposes of clause 12.7 of the Retail Award, do the words “in excess of” refer to circumstances where:

(a) a part-time employee works more than the total number of hours agreed under clause 12.2 or as varied under clause 12.3 (the hours agreed under clause 12.2 or as varied under clause 12.3 being the “Part-Time Hours”); or

(b) a part-time employee works outside of (but not necessarily more than) the Part-Time Hours?

Issue 49

Do hours worked by a part-time Salaried Employee in excess of the Part-Time Hours if such hours are worked voluntarily without being directed by the employer, constitute hours worked in excess of the Part-Time Hours for the purposes of clause 12.7 read together with clause 29.2(b)?

Issue 50

Do hours worked by a part-time Salaried Employee in excess of the Part-Time Hours where one of the Relevant Work Circumstances exist, constitute hours worked in excess of the Part-Time Hours for the purpose of clause 12.7 read together with 29.2(b)?

602    There are only two part-time employees involved in FWO v Coles. These are Burramuku Manikanta Reddy and Sheryl Licastro.

603    Clause 12 of the Award deals with the position of part-time employees. A part time employee is an employee who works less than 38 ordinary hours per week (cl 12.1(a)) but nevertheless still has reasonably predictable hours of work (cl 12.1(b)). Part-time employees are paid at 1/38th the weekly rate (cl 12.7). When a part-time employee first begins to work, the employer and employee are to agree in writing on a number of matters (cl 12.2). The most of important of these matters are the days of the week which are to be worked and the numbers of hours to be worked each such day (cl 12.2).

First issue: the meaning of ‘in excess’ in cl 12.7

604    Clause 12.7 relates in part to the circumstance where a part-time employee works ‘in excess’ of the ordinary hours. When a part-time employee works ‘in excess’ of the ordinary hours agreed, there is no dispute that the employee is entitled to overtime: cl 12.7. There is a dispute, however, about the meaning of the words ‘in excess’. The dispute is whether hours worked outside a roster constitute hours worked in excess of the hours agreed. Clause 12.7 provides:

A part-time employee employed under the provisions of this clause will be paid for ordinary hours worked at the rate of 1/38th of the weekly rate prescribed for the class of work performed. All time worked in excess of the hours as agreed under clause 12.2 or varied under clause 12.3 will be overtime and paid for at the rates prescribed in clause 29.2—Overtime.

605    This is the same language as cl 29.2(a) which applies to full-time employees. It provides:

(a) Hours worked in excess of the ordinary hours of work, outside the span of hours (excluding shiftwork),or roster conditions prescribed in clauses 27 and 28 are to be paid at time and a half for the first three hours and double time thereafter.    

606    I have previously explained why ‘in excess of ordinary hours’ in cl 29.2(a) means more than the number of ordinary hours. The same approach should be applied to cl 12.7. This is because (a) this is the ordinary meaning of the words ‘in excess’ and (b) it would be anomalous for the position of part-time employees to be different to that of full-time employees.

Second issue: The nature of agreements under cll 12.3 and 12.3

607    Clause 12.2 provides:

At the time of first being employed, the employer and the part-time employee will agree, in writing, on a regular pattern of work, specifying at least:

•    the hours worked each day;

•    which days of the week the employee will work;

•    the actual starting and finishing times of each day;

•    that any variation will be in writing;

•    minimum daily engagement is three hours; and

•    the times of taking and the duration of meal breaks.

608    Clause 12.2 does not confer a power on the parties to vary a regular pattern of work although it requires the written agreement in cl 12.2 to include a term that the regular pattern of work may only be varied in writing. However, the power to vary a regular pattern of work is found in cl 12.3:

Any agreement to vary the regular pattern of work will be made in writing before the variation occurs.

609    The Award draws a clear distinction between a variation to a regular pattern of work under cl 12.3 and the variation of a roster which is dealt with in cl 12.8:

12.8 Rosters

(a) A part-time employee’s roster, but not the agreed number of hours, may be altered by the giving of notice in writing of seven days or in the case of an emergency,48 hours, by the employer to the employee.

(b) The rostered hours of part-time employees may be altered at any time by mutual agreement between the employer and the employee.

(c) Rosters will not be changed except as provided in clause 12.8(a) from week to week, or fortnight to fortnight, nor will they be changed to avoid any award entitlements.

610    Cl 12.8(a) shows that the employer may, unilaterally, change a roster but not so as to alter the agreed number of hours. Clause 12.8(b) suggests that the employer and employee may, by mutual agreement, not necessarily in writing, change the rostered hours. I do not read cl 12.8(b) as authorising a variation in the regular pattern of work which would render the writing requirement in cl 12.3 redundant. Rather, I read cl 12.8(b) as permitting by mutual agreement (not necessarily in writing) the kind variation that can be done in cl 12.8(a) by the employer unilaterally and subject to the required notice period. As such, cl 12.8(b) does not authorise a variation to the agreed number of hours.

611    It is important, I think, that variations to a roster under cl 12.8 need not be in writing but that variations to a regular pattern of work must be.

612    Where there is an agreement to vary a regular pattern of work, for reasons I have already given, there can be no such agreement unless the objective circumstances show that the parties to it understood that by entering into the employee was aware they were giving away entitlements (if that be the effect).

613    The FWO submits that a variation to a regular pattern of work must be in writing. Coles does not deny this but submits that the writing requirement is met in the case of Burramuku Manikanta Reddy and Sheryl Licastro. Neither gave evidence. However, the following documents were available:

(a)    A schedule at CB Tab 490. Coles submitted that this document was a schedule entered electronically into Coles’ systems by, inter alia, the two employees ‘pursuant to which the part-time employees set their own hours of work’. Having examined the document at CB Tab 490:

(i)    It records both Sheryl Licastro (at cells 523 and 524) and Burramuku Manikanta Reddy (cell 5587) as full-time employees, not part-time employees; and

(ii)    I am unable to extract from this document evidence that these two employees set their hours of work.

(b)    The document at Tab 349. This document is headed ‘Team Member Roster’ and is for Sheryl Licastro. It records her as a part-time employee (‘PT’) and sets out her days and hours of work. At the foot of the roster there appears a section in the following terms:

Coles submitted that this showed that Ms Licastro’s hours of work had been acknowledged and signed. It will be observed that the third tick box option concerns variations to a regular pattern of work for part-time employees. That box had not been ticked by Ms Licastro.

There is no evidence which would allow me to infer whether this roster differed from Ms Licastro’s regular pattern of work because the evidence does not allow me to form any view about what her regular pattern of work was. Assuming in Coles’ favour that this roster does differ in someway from her regular hours of work, I would infer that what had occurred was a roster variation under cl 12.8(b). The fact that the third box has not been ticked makes it impossible to infer that Ms Licastro was signifying her consent to a roster variation under cl 12.3. That this was not intended to be a variation under cl 12.3 is supported to some extent by the fact that there is no evidence that a copy of this document was provided to Ms Licastro under cl 12.4.

(c)    The documents at Tabs 350-355. These were further roster records for Ms Licastro. They do not materially differ from the roster at Tab 349 and I reach the same conclusions about them as I have about it.

(d)    The document at Tab 227. This is a roster record for Burramuku Manikanta Reddy. It shows that he was a part-time employee. It sets out a 4 week roster for him starting on 30 April 2018. Unlike Ms Licastro, he appears to have ticked all the boxes:

In particular, he has ticked the box concerning variations to his regular pattern of work. This includes the statement ‘Provide “standing consent” to vary my regular pattern of work’. It is unclear to me whether this roster did in fact alter his regular pattern of work. To know the answer to that question it would be necessary to know what his regular pattern of work was. I do not think that the reference to ‘standing consent’ allows a part-time employee to cease to have a regular pattern of work. The regular pattern of work is an essential element in part-time employment under the Award: cl 12.1(b).

On the assumption that this roster does differ from earlier rosters and thus is capable at a factual level of being a variation to his regular pattern of work, I would not accept that this document shows that he had agreed to a variation to his regular pattern of work. As I have previously explained in relation to roster variations for full-time employees, I do not accept that the employee can be taken to have reached the agreement under cl 12.3 without the objective circumstances indicating the employee knew that in doing so he or she was giving up the right to receive overtime under cl 12.7. A quick perusal of the Coles’ form shows that for all of the boxes which purport to record agreements, the fact that the employee is giving way overtime entitlements is not mentioned.

614    This was the universe of evidence.

The Constructional Issues

615    On this thin evidentiary basis, the parties launched significant debates about the requirements in cl 12.3. On the conclusions I have reached, none of these matter. It is not shown that Ms Licastro’s rosters involved any variation to her regular pattern of work; even if they did, she has not ticked the relevant box.

616    In the case of Burramuku Manikanta Reddy, it is not shown that the roster at a factual level did involve a variation to his regular pattern of work; even if it does, the document does not show that he was aware that by ticking the box he was giving up the right to an overtime entitlement. It is thus not shown that there was an ‘agreement’ under cl 12.3.

617    If all these problems were overcome, there is no evidence that a copy of the varied pattern of regular work was provided to him under cl 12.4 which suggests that it was not a cl 12.3 agreement.

618    If all of that were wrong, I would accept that the document was a written record for the purposes of cl 12.3.

PART F: EMPLOYEE-SPECIFIC ISSUES

619    Whilst factual matters, most tier 2 and all tier 3 issues are outside the scope of this initial trial, some discrete factual issues arose for determination in respect of specific employees: Ms Brown, Mr Baker and Ms Pabalan.

F.1 Calculation Employee 11

620    As I foreshadowed earlier, Issue 53 in FWO v Woolworths asks:

On 26 September 2018 did Calculation Employee #11 finish working at the end of her shift at:

(a) 5.17pm; or

(b) 5.39pm?

621    Calculation Employee #11 is Ms Violet Brown. Woolworths’ records indicate that she scanned her fingerprint at 5.17 pm and then scanned it again at 5.39 pm. The first scanning was recognised by the system as a ‘punch out’, that is to say, a scan done on Ms Brown’s departure at the end of her shift. The second scan was recognised by the system as a ‘punch in’, that is to say, a scan done on Ms Brown’s arrival at the start of her shift.

622    Woolworths made no submissions about this.

623    On the face of it, it would be useful to know whether Ms Brown did or did not work on 25 and 27 September 2025. If she did work on either of these days (and there are punch records) then this would throw light on the present question. However, I was not taken to that evidence and the FWO’s submissions do not descend into that level of detail.

624    Other matters not explained included, why this issue mattered and whether the onus provisions had any relevance to these issues.

625    I conclude that whatever this case is, it has not been advanced in a form sufficient to permit adjudication. I make no finding.

F.2 Time and attendance claims of Mr Baker

626    Mr Baker’s claims overlap with the issues in FWO v Woolworths and to that extent are dealt with in the rest of these reasons (apart from issues which are not part of the regulatory proceedings but are shared with Pabalan).

627    There is a limited dispute between Mr Baker and Woolworths about Mr Baker’s time and attendance claims. In FWO v Woolworths Mr Baker is one of the calculation employees. In his case, there are clocking records available. In FWO v Woolworths the parties are agreed that where clocking records are available they are to be used to calculate entitlements.

628    On the other hand, in Baker Mr Baker claims that his clocking records are not accurate and that he in fact worked longer hours than they imply. This opens up the possibility that the FWO may recover compensation for Mr Baker in FWO v Woolworths in respect of his clocked hours but that he might also recover further compensation from Woolworths in the class action on the basis that, in fact, he worked more hours than the clocking records showed.

629    The interrelationship between the class action and the regulatory proceeding is therefore somewhat involved. On 25 July 2022 the Court ordered that the issues to be determined in the trial of the class action in Baker were:

(i) all matters relevant to liability in respect of the issues common to group members; and

(ii) issues relevant as to the principles and methodology applicable to the quantification of any compensation (but not the calculation of the actual amount of any compensation owing) to the Applicants and group members.

630    On 7 December 2022, the Court amended (i) to read:

all matters relevant to liability in respect of the issues common to group members that are Tier 1 and Tier 2 issues (as these terms are used in the decision and orders of this Court made on 8 April 2022 (Fair Work Ombudsman v Woolworths Group Limited (Case Management) [2022] FCA 376), and Tier 3 issues only insofar as they are coextensive with the Tier 3 issues in proceeding NSD581 of 2021 (that is, Tier 3 issues relevant to the first applicant during the Calculation Period (but not addressing: (a) time and attendance claims of either applicant (including such claims falling within the Calculation Period concerning the first applicant); (b) Tier 3 issues concerning the first applicant outside the Calculation Period; or (c) any Tier 3 issues concerning the second applicant)).

631    It therefore appears not to be in dispute between the parties that the Court should not determine Mr Baker’s time and attendance claims, as such, in the initial trial of the class action but rather at some subsequent hearing. Further, the parties appear to agree that in the regulatory action Mr Baker’s position should be approached on the basis that he worked the hours which are recorded in his clocking records.

632    However, the routes by which the parties arrive at this position are different. Mr Baker seeks in the regulatory action to take advantage of Woolworths’ agreement that where clocking records are available they should be used to determine the hours worked by an employee. Since Mr Baker’s clocking records are available, so it goes, they should be used to determine the hours worked by Mr Baker.

633    This sounds straightforward. However, a complexity arises from the fact that Mr Baker gave evidence both for the FWO in the regulatory action and also on his own behalf in the class action. Part of his evidence was to the effect that he clocked on and off randomly so that the clocking records are of no use in calculating his actual hours of work. Leaving aside some detail for now, Woolworths cross-examined Mr Baker very extensively on his evidence including as to his credit. Woolworths now submits that Mr Baker’s evidence should not be accepted in general and that his evidence that his clocking records were the result of random activities on his behalf should also not be accepted.

634    If Mr Baker’s evidence that his clocking records were randomly entered by him were accepted this would have a significant implication. It would mean that despite Woolworths’ agreement that where clocking records were available they should be used to determine hours worked, in Mr Baker’s case it would be obvious that his clocking records were not in fact accurate. The consequence of that would be Mr Baker’s entitlements in the regulatory action would be calculated off the roster records (as discussed above).

635    Both Mr Baker and Woolworths therefore wish to see Mr Baker’s entitlements in the regulatory action determined on the basis of his clocking records. It will now be apparent that Mr Baker seeks to do so via Woolworths’ general agreement that the clocking records are the most reliable records and to ignore his own evidence that his clocking records were not accurate. Woolworths seeks to get to the same position by inviting the Court to conclude that Mr Baker is not a reliable witness and therefore rejecting his evidence that his clocking records are not accurate.

636    Mr Baker now submits that the Court should not make any adverse findings about him since it may impact on the future course of the class action. One obvious concern could be that if the Court now makes adverse credit findings about Mr Baker (and concludes that his clocking records are accurate), there may be a prejudgment issue when the Court at a subsequent hearing comes to assess the reliability of his evidence that he worked longer hours that those disclosed in the clocking records.

637    On the other hand, there is no doubt that it was Mr Baker, in the initial trial, who introduced the entire topic of whether he had worked more than the hours recorded in his clocking records and that those records were random (and hence inferentially unreliable). That evidence then elicited from Woolworths a determined attack on Mr Baker’s credit.

638    If those credit issues are not resolved now they will be resolved in the future in two possible ways. First, they could be resolved at the subsequent hearing when Mr Baker’s time and attendance claims are actually resolved (including all issues of credit). The difficulty with that approach is that by the time I come to write any judgment in the matter it will have been several years since I saw Mr Baker give his evidence. That creates the possibility that a submission will be made that any advantage enjoyed me as a trial judge viz a viz an appellate court will have been lost.

639    On the other hand, if I determine the issue of his credibility now (in the course of determining the more limited issue of whether his clocking records are reliable) then I run the risk that Mr Baker or Woolworths will submit at the subsequent trial that I have prejudged his credibility.

640    Having considered the matter, I have concluded that the least risky path is not to determine Mr Baker’s credibility in this initial trial. No doubt, when the time comes for the issue of Mr Baker’s credibility to be assessed, a considerable period will have by then passed. That is something which will need to be borne in mind in preparing any reasons for judgment.

641    In that circumstance, the appropriate course is not to embark upon any consideration of Mr Baker’s credit and to accept that his hours of work should be determined from his clocking records.

F.3 Factual matters relating to Ms Pabalan

642    Ms Pabalan is the lead applicant in the class action against Coles. She has brought her proceeding on behalf several thousand Coles’ managers or team leaders who were employed by Coles on a full-time or part-time basis between 24 July 2014 and 24 July 2024 and whose employment was governed by the Award.

643    There are a number of legal issues between Ms Pabalan and Coles which I have dealt with earlier in these reasons. There remains now for resolution Ms Pabalan’s factual allegations and then the ascertainment of her entitlement, if any, to compensation.

644    Ms Pabalan worked for Coles between 13 June 2016 and 30 September 2019 at four different stores. The four stores were as follows:

(a)    the Miranda store where she initially worked as a caretaker customer service manager but from 11 November 2016 as a customer service manager. Ms Pabalan worked at the Miranda store from 13 June 2016 to 6 August 2017.

(b)    the Roselands store where she worked as a customer services manager and, from August 2018, also as the online manager. Ms Pabalan worked at the Roselands store from 7 August 2017 to 4 November 2018.

(c)    the Kirrawee store where she worked a customer service manager. Ms Pabalan worked at the Kirrawee store from 5 November 2018 to 18 August 2019. Whilst working at the Kirrawee store, Mr Pabalan also did some work at the Engadine, Roselands and Sutherland stores.

(d)    the Sutherland store where she worked as the caretaker dairy manager. Ms Pabalan worked at the Sutherland store between 19 August 2019 and 30 September 2019 when she left Coles’ employ. During this time she also did some work, while training, at the Hurstville store.

645    It is then necessary to consider Ms Pabalan’s evidence about her work at each store.

The Miranda store: 13 June 2016 to 6 August 2017

646    Ms Pabalan’s contract of employment was dated 14 June 2016 and effective from 11 November 2016. She was contracted to work 40 hours per week and was rostered on a 6-day, 4-day alternating roster. Ms Pabalan was generally rostered on to work every day except Friday in the first week and Monday, Wednesday, Thursday and Friday in the second week. Her original agreed rostered hours were from 8am to 5pm. Ms Pabalan was in charge of about 50 to 70 staff in the customer service department. On a daily basis, the number of staff she supervised fluctuated from between 1 to 10. According to her manager, Mr Cruickshank, Ms Pabalan’s role was to be in charge of the customer service department, i.e., the checkout and tobacco section.

647    She was provided with a list of tasks which it was her responsibility to ensure were performed each day. She also received additional tasks through a messaging system. An important task of Ms Pabalan’s as a manager was the preparation of the rosters for the staff who she managed as well as her own roster. Her manager, Mr Cruickshank, observed that these tasks, including the drawing up of the rosters, could be delegated to other staff members so long as they were suitably qualified. Although Mr Cruickshank did not actually say this, I would infer from this aspect of his evidence that, generally speaking, it was not generally possible for Ms Pabalan to delegate her function of drawing up the rosters.

648    Ms Pabalan said that doing the rosters took her two hours each week and that she spent another one to two hours adjusting them. For his part, Mr Cruickshank could not see how this much time could have been needed. The base rosters were already in the system for the full time and part time employees and all that should have been involved for Ms Pabalan was really just the filling out of the rosters for the casual employees. Mr Cruickshank thought that this ought to have taken Ms Pabalan a maximum of 1.5 hours each week to do together with maybe five minutes each day to update them. It was his view that Ms Pabalan had sufficient hours in her roster to permit her to perform these functions.

649    There were a number of other areas of disagreement between Ms Pabalan and Mr Cruickshank. For example, Ms Pabalan said that Mr Cruickshank had told her that she needed to work every public holiday unless the store was closed and even if the day in question was not a day upon which she was usually rostered on to work. Ms Pabalan also made this claim in relation to most of the other stores at which she worked. I resolve this issue below.

650    Ms Pabalan accepts that her roster records are useful to the extent that they show upon which days she worked but that they do not reflect her hours of work accurately. She says the actual hours she worked were the hours she was told to work by the store manager.

651    In the third week of her employment, she says that she was told by her store manager, Mr Cruickshank, that she could not leave until she had checked in with him and everything was ‘100%’. Mr Cruickshank agrees that he did ask managers to check in with him before they left. He did not think that he would have told her than all her tasks needed to be completed before she left. This was because many of the tasks were not time critical on a particular day. He did agree however that business critical tasks would need to be completed before Ms Pabalan left for the day.

652    Ms Pabalan also says that she was told that she should be serving customers most of the time. Mr Cruickshank does not recall telling Ms Pabalan this and says that it would not have been his practice. On the other hand, he does accept that Ms Pabalan was required to prioritise serving customers over other tasks and that she would, in consequence, have been in the service area most of the time unless was doing a task which required her to be elsewhere (or on a break). Mr Cruickshank also accepted that sometimes there was an event known as a ‘priority one’ in which everyone had to work in the service area because there too many customers waiting for the registers. There was similar evidence in relation to an event known as a ‘rumble’.

653    Ms Pabalan’s explanation for why she was always serving customers was because Coles did not maintain a sufficient number of staff to permit the work to be done. The consequence of this was that she was not able to prepare the rosters within her rostered hours. Mr Cruickshank did not agree with this.

654    Ms Pabalan also says that she was told by Mr Cruickshank that her department was over the allocated number of hours and that she needed to cut back hours worked by her department. Mr Cruickshank does not recall this.

655    In April 2017, a new rostering system called OneTeam came into effect. The system displayed the staffing budget, expected customer sales and how many people should be rostered on for each 15 minute interval using a red line graph. This was called ‘the shape’. Ms Pabalan was not permitted to have more people rostered on than was permitted by the shape. Mr Cruickshank did not recall this but pointed out that sometimes departments were permitted to exceed their budgets.

656    Ms Pabalan observed that a difficulty with OneTeam system was that it did not permit the rostering of 15 minute paid tea breaks. This increased Ms Pabalan’s administrative burden because she had to ensure that her staff took their breaks. Another implication was that, for example, if there were four people working, effectively an hour of working time was lost (4 x 15”) which did not appear in the roster. This was an example of a general theme in Ms Pabalan’s evidence that Coles ran the store in a fashion which was understaffed. Other, similar problems, arose from OneTeam. However, I do not think they are material to the central issues which currently arise.

Hours of work

657    Ms Pabalan estimated that during the first couple of months she generally worked 8am-5pm according to her roster. She says that she was told that she did not need to clock on or off at the Miranda store and that she never did so. After this initial period, she says she began to work past 5 pm to about 7 pm. From around the third month of employment she began getting to work at 5 am and 6 am every Monday and Friday. She also began starting work at around 6am on the other days.

658    Mr Cruickshank has a different recollection about this. He recalls her leaving early to attend to her children perhaps up to three times per week. He says that he approved this on an ad hoc basis. On the other hand, he was aware that Ms Pabalan sometimes came back to work after hours. He says that no-one asked her to do this and that he recalled speaking to her a few times about ensuring that she did not work excessive hours. His impression from his discussions with Ms Pabalan was that she adopted this practice because she had some problems in her personal life. Ms Cruickshank also says that there was no reason for Ms Pabalan to have been working the hours she claimed to have worked. He said that her rostered hours were generally sufficient to permit her to do her job.

Weekends

659    Based on Ms Pabalan’s evidence about her roster and the schedule data in Exhibit MAP-3, she generally worked weekends in the first week of the roster as part of her 6 day/4 day rostering arrangement.

Time off in lieu

660    Ms Pabalan says that if she was asked to work on a day for which she was not rostered, she usually took a day off in lieu. Mr Cruickshank said that it was rare for him to ask Ms Pabalan to work on days she was not rostered on and this usually only occurred if the store was being visited by senior management. He thought that this might have happened once or twice whilst he was at the Miranda store.

Working from home

661    Ms Pabalan estimated that she did about 15 hours of work at home each week. These were the administrative tasks such as replacing shifts, processing refunds, filling check out observation forms and ensuring the roster rules were being implemented.

Breaks and meal allowances

662    She was informed that she could take a 60-minute unpaid meal break and two 15-minute paid breaks. But she says she only ever took a 30-minute unpaid meal break and she could only take a 30-minute meal break about once a fortnight. She took a smoke break three times a day for about 5 to 10 minutes. Mr Cruickshank did not think there was any reason why managers could not take their required breaks. I would observe that Ms Pabalan’s three smoke breaks a day would amount in total to 15 to 20 minutes.

Uniform

663    Ms Pabalan says that she was told by her predecessor that she was required to wear Coles-branded clothing every day which included white branded manager shirts. She purchased the following items:

(a)    two long sleeve white manager shirts with the Coles logo;

(b)    two brown jumpers with the Coles logo; and

(c)    two pairs of black pants.

664    The total cost was $219.34 which was deducted from her pay. There are subsequent deductions from her salary which were paid to Bizwear. These were for $26.84, $117.26 and $167.20. She does not recall precisely what these were for, but she thinks it likely that they were for replacements.

Some difficulties with Ms Pabalan’s evidence

665    As I have noted above, Ms Pabalan gave evidence that she had been directed to work every public holiday (and gave this evidence about most of the stores at which she worked). However, her mobile phone records showed that this could not be correct and that there were several occasions when she had not worked on public holidays (although one of these involved the taking of annual leave). However, when confronted with her phone records Ms Pabalan readily accepted that her evidence was not correct. Eventually it was put to her at T789.21 that her evidence that she had worked every public holiday at the four stores ‘just isn’t accurate’ and she conceded that this was so (‘Well, based on the data, yes.’)

666    It was then put to her that her evidence that she had worked from 6am to 7pm was also not accurate which she accepted at T789.26. The cross-examiner next sought to have Ms Pabalan accept that her recollection of public holidays was more likely to be better than her recollection of run-of-the-mill days. Ms Pabalan replied that all of the days apart from Christmas and Easter were ‘just a blur to me’, that each was ‘one after the other’ and that each ‘was just a day that you got up and worked’. She was pressed to accept that if she could not accurately remember what had happened on public holidays it was even less likely that she could remember what had happened on these ordinary days. Ms Pabalan seemed unwilling to accept this:

And so if you can’t accurately recall the days or the hours you worked on public holidays, it’s even less likely that you can do the same for ordinary run-of-the-mill days. You would agree with that?---Well, it’s because I remember leaving to pick up my kids at day care at specific times and coming back to the store. People were taking care of my kids that would work with me, leaving and grabbing them and then picking them up at the store. When I was leaving the store late, speaking to the supervisors that were left – and generally when there were supervisors left, there would be only one or two. Or it would be – after my store manager would leave, I would go out the front to fix things. So it was because of the things that I remember doing or who was on or – like, for example, like, a store manager was telling me that I needed to leave – the assistant store manager, Gary. And this was after I picked my kids up from a lady that was watching my kids, Effie, and she – he locked me out and told me to go home, and he would explain to Con why I hadn’t finished my work. So it’s those things that is what triggers my memory of I was there late, I was there early.

667    I accept that Ms Pabalan did have to make arrangements for her children but whilst I accept her evidence about this was sincere, I do not think that her recollection of her working hours is reliable to the extent that it suggests a more uniform working of additional hours than appears to have been the case. This is not to say that Ms Pabalan did not work additional hours or on public holidays. Rather, it is only to say that I do not accept that the practice was as universal as her evidence might otherwise suggest. I think Ms Pabalan probably did sometimes work long hours and it is likely that her recollection of the daily grind was that the days were long and hard. But I do not think that her evidence that this was how things generally were is reliable at the level of precision.

668    In her affidavit in reply, Ms Pabalan also gave evidence that she was not aware that she could take a day off in lieu for working a public holiday. Under cross-examination, however, it appeared that she had in fact taken a fortnight off work but that only seven days of this could be accounted for as annual leave (the implication being that the other days were days off in lieu). When this was pointed out to Ms Pabalan she appeared to be genuinely puzzled about it. The final form of her evidence was to say that if the people who processed pay had accounted for this week as time off in lieu she was not aware of it: T794.7. This episode does not alter my view of Ms Pabalan as an honest witness but it does underscore the point already made that her recollection of the fine detail of her working times is not as clear or accurate as her evidence may tend to suggest.

669    Ms Pabalan was then taken to several examples where:

(a)    her mobile telephone records showed that she had not gone to work on a rostered day;

(b)    the day had not been taken as sick leave or annual leave; and

(c)    the day did not correlate with working any public holiday.

670    To her credit, Ms Pabalan accepted across several pages of transcript that this was, indeed, what the evidence showed. She was then challenged on her in evidence in her affidavit in reply that she had only taken time off in lieu where she had worked on a public holiday. The question and answer were as follows:

I want to take you back to your evidence. If we go to paragraph 37 of your reply affidavit, court book tab 8, page 685. So you would agree that, based on all the examples I’ve put to you, the circumstances in which you took time off were not confined to where you had worked on a public holiday on a day that wasn’t your normal rostered day? You agree?---I don’t believe that I was taking it as time in lieu. 40 I believe some of those days might have been me calling in sick. And if payroll had entered it in differently, then it was entered in incorrectly. Or when there was the annual leave, I may have needed to extend my annual leave. And if they hadn’t put through annual leave, I’m not too sure why. I wasn’t under the impression that I had time in lieu, so I wouldn’t have been taking those days off as time in lieu.

But you accept that on none of the examples I took you to was there any deduction for sick leave or annual leave?---Yes, I can see that there’s no deduction, but that wasn’t an error on my end. That would have been something that payroll would have processed.

671    My impression of Ms Pabalan’s response when she gave it was that she was endeavouring to give her evidence honestly and as best she could. Nevertheless, it is difficult to accept that she did not take time off in lieu in situations other than where she worked public holidays. Ms Pabalan gave various explanations in each case but none of these had been mentioned in her affidavits.

672    As with her evidence about public holidays, my impression is that the realities of the situation are more complex than Ms Pabalan’s affidavit suggests. I am satisfied that, contrary to her evidence, Ms Pabalan did not work on every public holiday and I am also satisfied that she did indeed take days off in lieu.

673    In the same vein, Ms Pabalan also gave very general evidence about her days and hours of work. For example, at [24] of her first affidavit she gave evidence that from her second month of employment at the Miranda Store, she generally kept working on each shift past her rostered finishing time of 5 pm until between 7 pm and 8 pm so as to complete her duties. At [25] she then said that in her third month she started work early between 5 am and 6 am every Monday and Friday and on other days she started at 6 am. She was also taken to other examples where her evidence about her days and hours of work was expressed in these general terms.

674    However, her mobile records showed that, whilst the general statements were true sometimes, there were many days where they were not. Ms Pabalan, to her credit, accepted that the accuracy of her mobile phone records over her own recollection: T802.1-3.

675    Again, I accept that this aspect of Ms Pabalan’s affidavit evidence was an honest attempt on her part to describe with as much precision as possible just what her days and hours of work were. However, this evidence was prepared long after events which were inherently monotonous and without the benefit of independent records. And, as I have said, it was prepared in circumstances where it is not difficult to see why Ms Pabalan might not have regarded her relationship with Coles as having been a positive experience for her. However, it is clear from her mobile phone records that her general evidence about her days and hours of work is often enough not correct at the granular level.

Conclusions

676    I accept both Ms Pabalan and Mr Cruickshank as witnesses of truth. However, I reject Ms Pabalan’s evidence about generally working public holidays. More generally, whilst I accept that Ms Pabalan was an honest witness, I do not think her evidence about the actual hours and days worked is sufficiently reliable to make findings on the basis of it.

Days and hours of work

677    I think it is more likely than not that Ms Pabalan worked longer hours than for those for which she was rostered. I therefore find that general proposition proven at the civil standard. However, I do not accept that her estimate of what these additional hours were is reliable. I am not affirmatively satisfied that Ms Pabalan worked the additional hours she claims although I am sure she worked some.

Unpaid meal breaks

678    I think it is more likely than not that Ms Pabalan did fail to take some of her unpaid mail breaks. I find this general proposition proven at the civil standard. However, I am not able to make a finding on her evidence as to the extent of this practice.

Working from home

679    I think it more likely than not that Ms Pabalan did do some work from home and I find this general proposition proven. Mostly this is likely to have involved messaging staff members about shifts. I do not accept her estimate of 15 hours per week is reliable. I make no finding about the number of hours she worked from home.

Special clothing allowance

680    I have spent some time above construing cl 20.2(a) to determine whether it covers non-branded clothing. In line with those conclusions, Mr Pabalan is entitled to the allowance in respect of the branded Coles clothing but not the two pairs of black pants. She is entitled to the laundering allowance.

Weekend work

681    I accept that Ms Pabalan worked on the weekends to the extent indicated by the roster records.

Work on non-rostered days

682    The evidence of both Ms Pabalan and Mr Cruickshank permits me to find it more likely than not that Ms Pabalan did work on some days on which she was not rostered. However, the evidence does not permit me to make any finding about the frequency of this practice.

The Roselands store: 7 August 2017 to 4 November 2018

683    Ms Pabalan was employed at the Roselands store pursuant to a contract under which her salary was $70,000. There are two significant differences between the situation at Roselands and that at Miranda.

684    The first is that there was a different store manager, Mr Con Liveris. Unlike Mr Cruickshank, there were aspects of Mr Liveris’ evidence that were difficult to accept. He was cross-examined about an exchange of text messages with Ms Pabalan at 8.16 pm on 20 March 2018 which concerned rostering arrangements for another staff member. Ms Pabalan informed Mr Liveris that she had altered the roster. Mr Liveris responded ‘Thanks’. Under cross-examination Mr Liveris said that by the word ‘thanks’ he was expressing his surprise at her being at work so late; that he had intended by the use of the word ‘thanks’ to convey that she should go home; and, that he had an actual recollection of this text exchange.

685    It was an important aspect of Mr Liveris’ evidence that he rejected any suggestion that Ms Pabalan was working long hours. The answers given by Mr Liveris about his use of the word ‘thanks’ are consistent with that aspect of Mr Liveris’s evidence. However, I do not accept Mr Liveris’s evidence about what he meant by the word ‘thanks’ which is contrary to ordinary English and, with respect, not plausible. I also do not accept that Mr Liveris has any recollection of a text message sent 5 years earlier in a work context concerned with the roster of a single member of Mr Liveris’ (large) workforce. This evidence was implausible. These matters persuade me that I should approach the evidence of Mr Liveris with considerable caution.

686    Despite the frailties of the evidence of Mr Liveris, the same problem arises in relation to Ms Pabalan’s evidence as arose in the case of the Miranda store. Whilst I am satisfied on the balance of probabilities that in principle her broad claims are correct I am unable to ascertain the precise elements of her claims. I therefore make the same findings as I made in relation to the Miranda store in relation to the Roselands store. She is entitled to the clothing allowance for the items at [89](a), (b), (c) and (e) of her first affidavit. She is not entitled to the items claims at [89](d) or the suits referred to at [91]. She is entitled to the laundering allowance.

687    The second matter is that Ms Pabalan continued not to clock until the end of October 2017. According to Ms Pabalan she received an employee ID to clock on and off only in November 2017. She says that she clocked on and off inconsistently. She also gave evidence that she saw the store support manager, Gary Ackroyd, adjusting her recorded time and attendance data to match the roster records. On this basis, Ms Pabalan did not think that Coles’ clocking records from October 2017 were reliable. Ms Liveris offered no evidence about this and Mr Ackroyd was not called as a witness. In the circumstances, I accept Ms Pabalan’s evidence about this. I conclude that clocking records at Roselands are not generally reliable.

The Kirrawee store: 5 November 2018 to 18 August 2019

688    Ms Pabalan was employed at the Kirrawee store on a salary of $71,925. The store manager of the Kirrawee store was a man called Steven who was not called to give evidence. Whilst working at the Kirrawee store Ms Pabalan also did work at the Engadine Store, the Roselands store and the Sutherland store. With one exception, the situation in relation to Ms Pabalan’s claims is the same as in the case of the Miranda and Roselands stores and I make the same findings.

689    Ms Pabalan is entitled to the clothing allowance for the items at [125](a)-(c) and [128] except for the leather shoes. She is not entitled to the items at [125](d)-(e) or the suit in [126]. She is not entitled to the puffer jackets at [130]. There is no evidence for why the puffer jackets were purchased which allow me to conclude that they were special clothing (although perhaps it has something to do with working in fridges – still it is not my role to guess what Ms Pabalan’s case might have been). I am also not satisfied that the leather shoes referred to at [130] are safety boots. The invoice refers to them as ‘Ladies Leather Shoe’. Ms Pabalan’s evidence about the purchase of safety boots with her credit card is confused and makes no sense.

690    In relation to her clocking records, Ms Pabalan’s evidence was that she was not able to clock in or out until February 2019 when she began working some days at the Roselands store. During the period where she was working across multiple stores, she also says that she was told not clock on or off at any store apart from Kirrawee. The clocking data bears this out. It seems to start improving from June 2019 in terms of frequency. However, I accept Ms Pabalan’s evidence about its general reliability.

The Sutherland store: 19 August 2019

691    The store manager was Mr Peter Kyriazis. He was called and was cross-examined. Mr Kyriazis’ evidence concerning the stocktake shift which occurred on 25 and 26 August 2019 was unsatisfactory. He initially said that Ms Pabalan would only need to have a done an aisle and the fridge which would only have taken six hours. He was confronted with text messages from Ms Pabalan which showed that she had not even got to the fridges by 3.18 am despite commencing at 9 pm. Mr Kyriazis then said that his initial evidence had been premised on Ms Pabalan being assisted by 3 or 4 people. I do not accept this evidence. More generally, this incident persuades me that Mr Kyriazis’ evidence is not reliable on contestable matters.

692    At this time, Ms Pabalan also did some work at the Hurstville store. Ms Pabalan was initially told not to clock on or off at the Hurstville store due to her being still registered at the Kirrawee store. Ms Pabalan’s evidence was that her clocking events were unreliable. A review of the records shows that they are intermittent. I accept Ms Pabalan’s evidence that her clocking records are not a reliable guide to whether she was present at work.

693    I make the same findings as I have made in relation to the other stores. She is entitled to the clothing allow for the items at [155](a)-(c) but not (d). She is entitled to the laundering allowance.

PART G: CALCULATION ISSUES

694    The parties in each proceeding raised issues relating to the calculation of entitlements including whether a power of allocation was available to the employers.

G.1 Order in which Overtime Provisions are to be Applied

695    Issue 15 in FWO v Woolworths, which was adopted in Baker, asks:

Issue 15

If overtime is payable under different clauses of the Retail Award for work performed by an employee on particular hours:

(a) does the employer have a discretion to determine the order of application of the clauses concerning overtime under the Retail Award; or

(b) if not, in what preferential order should the following clauses concerning overtime under the Retail Award be applied:

(i) Clause 27.2 – span of ordinary hours

(ii) Clause 27.3 – maximum ordinary hours on a day

(iii) Clause 28.1 – 38 hour week rosters

(iv) Clause 28.5 – 19 days in each four week cycle

(v) Clause 28.10 – six and four day weeks

(vi) Clause 28.11 – consecutive days off

(vii) Clause 28.12 – six consecutive days

(viii) Clause 28.13 – regularly working Sundays

(ix) If the Court finds that clause 28.14 is a roster condition, clause 28.14 –

notification of rosters?

696    The FWO also contended for a further sub-issue in Issue 15:

(c) if the employer has a discretion to determine the order of application of these clauses does that discretion need to be exercised at a particular point in time, and, if so, when?

697    In FWO v Coles, Issue 72 asks:

What approach should be taken to sequencing of overtime under clauses 27.2(a), 27.3, 28.1, 28.5, 28.10, 28.11(a), 28.12, 28.13(a) and 28.14(a) of the Retail Award where overtime is payable under different clauses of the Retail Award for work within the same period?

698    Issue 34 in Pabalan was expressed to be equivalent to Issue 72 in FWO v Coles.

699    It is a feature of the Award that on a given day, the hours worked by an employee may result in more than one entitlement to overtime. For example, if an employee is rostered on a Monday for a 12-hour shift and works from 12pm to 12am, more than one entitlement arises:

(a)    From 9 pm the employee is working outside the spread of hours for 3 hours. An entitlement to three hours of overtime arises under cl 29.2(a) operating on the spread of hours in cl 27.2(a); but

(b)    From 11 pm the employee is working in excess of the maximum hours of 11 hours per day prescribed by cl 27.3(a) but does so for only one hour. The employee is entitled to one hour of overtime under cl 29.2(a) operating on the roster condition in cl 27.3(a);

700    The fact that the employee is entitled to one hour of overtime under via cl 27.3(a) but three hours of overtime via the spread of hours in cl 27.2(a) cannot have the effect that the employee receives only one hour of overtime. I accept of course (and I did not apprehend it to be in dispute) that the employer does not have to pay overtime cumulatively where this kind of overlapping occurs.

701    The fact that the parties agreed that this was so caused them not to inquire into why it was true and this, in turn, engendered shared misconceptions about the present issue. Why is overtime not cumulative once arising from more than one clause? Because once cl 29.2(a) is enlivened at a particular point in time on a day, all further work done after that time will be at overtime rates. That a subsequent overtime trigger also occurs (in the example above, event (b)) has no legal consequences because the employer was already bound to pay overtime at that point in time because the event (a) had already occurred.

702    It was in that context, that the parties debated what order the overtime provisions were to be applied. It will follow from what I have just said that this is misconceived. Clause 29.2(f) requires overtime to be calculated on a daily basis. The overtime entitlements are to be calculated on the basis that on any given day overtime is payable under cl 29.2(a) from the time at which any overtime trigger is enlivened on that day.

703    In the example above there were two intra-day triggers: one at 9 pm and one at 11 pm. In other cases, the doing of any work on a particular day will trigger an entitlement to overtime. Examples of day triggers of this kind can be found in cll 28.11 and 28.5. Where these whole day rules are breached that will occur on the day that breaches of those clauses becomes unavoidable. Once that position is reached all work done after that time will be done at overtime rates. To return to the example of cl 28.11 (two consecutive days off each week or, if not, three consecutive days off per fortnight), compliance with it will become unavoidable only when:

(a)    Two consecutive days were not taken off in the first week; and

(b)    By the third last day of the second week:

(i)    there have not been two consecutive days off;

(ii)    the fourth last day of the second week was not taken off either; and

(iii)    work is done.

704    Once work is done in (iii), overtime is triggered under cl 29.2(a) acting through cl 28.11. All hours worked thereafter will be worked at overtime rates on each day. This is because on each day, the work will occur outside the roster condition prescribed in cl 28.11.

705    The point for present purposes, is that day rules such as cl 28.11 are not governed by different principles. They merely result in a trigger on a particular day which always goes off before any other daily trigger once any work is done.

706    The same may be said about rules which operate more generally over longer periods of time such as fortnights and months. There is no question of overtime becoming payable retrospectively under these clauses. Rather, when these roster rules are breached (when it becomes no longer possible that they can be complied with) they result in triggers on the next day work. They are therefore the same in kind as the day triggers I have already mentioned.

707    Viewed that way, the parties’ debate about the order in which roster condition clauses are to be applied is misconceived. Overtime is to be calculated on a daily basis and is to be paid on all hours worked after the first trigger event on that day.

708    Turning then to the parties’ positions, the FWO’s position in FWO v Woolworths was that:

(a)    day triggers were to be applied first; and

(b)    after that, triggers were to be applied in order of time with the shorter triggers applied first.

709    Except that the use of the concept of ‘applying the trigger’ is wrong, I agree with this approach. The FWO did not advance any constructional reason for why its approach should be adopted. No doubt this is because one searches in vain in the Award for anything resembling the idea of applying overtime entitlements in any particular order.

710    However, although the FWO did not explain why the Award supported its position, in my view it is an inevitable corollary of overtime being required to be assessed each day under cl 29.2(f) and the proposition that once overtime is triggered at a point in time during a day under cl 29.2(a) all hours worked after that time are overtime.

711    Were it otherwise, overtime due after the first trigger would cease to be payable after a second. To return to the example above, although the employee worked three hours outside the span of hours, the fact that at 11 pm they worked one hour outside the 11 hour rule would then result in the employee losing three hours of overtime and getting instead one hour. In my view, such an approach would be absurd.

712    Turning then to Woolworths’ position, it submitted that:

(a)    in the absence of express provision to the contrary, an employer had a discretion to determine the order of application of these clauses; and

(b)    overtime that is triggered on a particular day is triggered first followed by overtime which is triggered on hours worked over a week, a fortnight and then overtime that is triggered on hours worked over a four week roster.

713    I do not accept proposition (a). No discretion is necessary for, or involved in, the operation of cl 29.2(a). Proposition (b) is inconsistent with (a). Woolworths cited Australasian Meat Industry Employees Union v Dick Stone Pty Ltd [2022] FCA 512; 314 IR 441 but it does not seem to be authority for this proposition. As it happens, proposition (b) is quite close to the FWO’s position. In any event, as I have explained no question of methodology arises.

714    Turning then to Coles’ position in FWO v Coles, the incoherence of the parties’ submission was tidily encapsulated by Coles’ submission at [736]-[737]:

The parties appear to agree that in such circumstances the applicable overtime rates do not compound or apply cumulatively.

But the question then arises as to the order in which particular overtime rules ought to be applied to a particular period of overtime worked, so as to avoid an outcome where entitlements might attach cumulatively.’

715    As I have explained, no question of overlap is involved. Once an overtime entitlement is first triggered on a day of work, overtime is payable for the rest of that day (or the period over which the entitlement extends such as cl 28.11). That subsequently in that period further overtime triggers have occurred has no relevance and overtime is payable for the hours worked across the relevant period.

716    As such Coles’ submission is wrong for the same reason that the FWO and Woolworths’ submissions are wrong.

717    Coles advanced what was apparently a different methodology to the FWO however it was not accompanied by any worked examples and limited explanation. In the result, the short of the matter is that I do not understand what Coles was trying to say. Not being able to understand the submission, it is inevitable that I cannot accept it. In any event, I have explained how the overtime entitlements are to be calculated.

718    Another feature of the present question, as I expressed at the beginning of this judgment, is that the debate between the parties took place in a vacuum divorced from any actual examples of the controversy the parties were discussing. It was by that means, that the parties proffered no worked examples of what they were trying to say resulting in the opacity I have referred to above. Before granting any declaratory relief about this, I will need to be satisfied that the above conclusions actually play out in this litigation in a way which is not merely advisory or hypothetical. The parties will therefore need to identify some persons for whom this debate – whatever it actually was – is material.

G.2 Order in which salary payments are to be applied to satisfy entitlements

719    Issue 42(a) and (b) in FWO v Woolworths, which was adopted in Baker, asks:

Issue 42

(a) Is it appropriate to allocate salary payments (and other benefits) paid to a Salaried Employee in a particular period to particular entitlements under the Retail Award?

(b) If so, how should the payments made to an employee be allocated to particular Retail Award entitlements?

720    Issue 73(c) in FWO v Coles also touched on the topic of allocation:

Issue 73

In relation to the contract clauses set out in the particulars under paragraph 12 of the Amended Defence:

(a) Should the clauses be construed as contrary to public policy, void and/or otherwise of no effect?

(b) If no to (a):

i. can payments of annual salary be used to absorb all or any entitlements arising under the Retail Award?

ii. if so, over what period may set off be applied (such as annual or monthly)?

(c) If yes to (b)(i), how should the payments made to a Salaried Employee be allocated to particular Retail Award entitlements?

721    The tail end of Issue 35 in Pabalan asks a substantively similar question to Issue 73(c) in FWO v Coles.

722    Woolworths paid its salaried managers on a fortnightly basis. The salary paid was in excess of the wages which would have been due if each employee had worked a standard 38 hour week. The amounts paid to the salaried managers were said to be paid in discharge of all obligations that Woolworths might have had under the Award. These included the obligations to pay the minimum wage for ordinary hours and other entitlements such as overtime and penalty rates.

723    The letters of employment also provided that this question was to be assessed over the whole year. Earlier in these reasons I have concluded that this could not be done over the whole year but could be done over the pay cycle (which was in this case two weeks).

724    The question which now arises is how the fortnightly instalments of salary are to be allocated as between the various monetary obligations which Woolworths had to pay each employee. Why this question matters is not immediately self-evident and is best to begin with an illustrative example.

725    Consider the situation of an employee who is paid fortnightly a salary of $1,000 expressed to be in discharge of wages due for working ordinary hours and all other entitlements under the Award and then imagine that this employee works their ordinary hours in a way which attracts penalty loadings (for example, weekend work) and works additional hours which constitute overtime:

726    It will be seen that the employee is underpaid by $300. But the precise nature of the underpayments is not revealed in this table, only their bottom line. If the only question in these proceedings was how much money Woolworths owed the employee, there would be little point in determining either the number of underpayments or their quantum. It would be enough to know that the employee was underpaid $300 in the fortnight.

727    But in this case, the FWO seeks the imposition of civil penalties on Woolworths in relation to each contravention. Contravention will occur each time an obligation to pay an entitlement is not discharged either in full or in part. Further, in gauging how serious any individual contravention is as part of the purpose of determining what penalty is appropriate, it may be necessary to have regard to, inter alia, the amount by which each entitlement was underpaid.

728    The actual allocations impact these matters. Consider the following variation to the above example involving an arbitrary allocation of the amount actually paid to the employee to the various payment obligations owed by Woolworths:

729    This allocation is arbitrary and has been chosen merely to illustrate the point. Allocated in this way, the salary payment to the employee of $1,000 results in only two contraventions consisting of underpayments of $50 and $250. On the other hand, the allocation could be done this way:

730    On this basis, there has only been one contravention. Obviously enough, the number of contraventions and the amount of the underpayments can be arbitrarily adjusted in this fashion in a large number of ways.

731    It is in that context that the parties are in dispute as to how Woolworths’ payments are to be allocated.

732    The question which arises for each employee is whether there has been an allocation of the salary payments between Woolworths’ various payment obligations under the Award. This could happen either as a matter of fact or as a result of the terms of each of letter of employment.

733    Woolworths submitted that as a debtor it had the right when making a payment to allocate the payment or part of it to whichever liability it chose before or at the time of payment: CMA Corp Ltd v SNL Group Pty Ltd [2012] NSWCA 138 at [7]-[8]. The evidence does not disclose that Woolworths has ever affected an allocation on a fortnightly basis and this is no doubt because of its erroneous view that it was entitled to approach the question on an annual basis.

734    In the event, the principle that a debtor may allocate which liability it will discharge by a payment yields to the terms of any contract. The contracts of employment provide by cl 6:

6)    Minimum entitlements

If at any time you are entitled to any payment or other benefit as a consequence of the Employment (whether under legislation, an industrial instrument, the National Employment Standards or otherwise) including, without limitation, minimum hourly rates, penalties, overtime, allowances such as meal allowances and loadings such as annual leave loading (Minimum Entitlements), you agree that:

(a)     as far as possible, the Remuneration and other benefits under this Agreement will be in satisfaction of the Minimum Entitlements over a 26 week period calculated at the applicable minimum rate: and

(b)    the Minimum Entitlements do not form part of this Agreement.

As part of this, your Base Salary and any allowance outlined in your Letter of Offer includes payment for:

(a)    all hours you work over a 26 week period (whether part of your ordinary working hours or not): and

(b)    public holidays and substitute public holidays (whether you work on those days or not).

735    Where the salary instalment in a fortnight was sufficient to discharge all of Woolworths’ monetary obligations arising under the Award in that fortnight, I would infer that the parties intended to allocate the salary payment between Woolworths payments obligations under the Award on a pari passu basis. This results in each payment obligation being discharged in full.

736    The question which then arises is whether an inference can be drawn from the letter about the parties’ intentions in relation to allocation where the fortnightly salary instalment was insufficient to discharge all of Woolworths’ monetary obligations arising under the Award in that fortnight. In my view, the same intention may be inferred; that is to say, an intention to apportion the salary payment between the payment obligations on a pari passu basis.

737    This result may also be seen to derive from the fact that the letter does not distinguish between any of the entitlements and therefore suggests that the parties approached them on the basis that they were to be treated equally.

738    The following example will illustrate this approach to a salary payment of $1000:

739    Not too much ought to be expended on this issue in my view, however. In terms of assessing the objective wrongdoing of Woolworths for the purposes of imposing a civil penalty, the present accounting and allocation exercise seems distant from issues of substance for the purposes of assessing penalty. To be clear about this, what is most likely to matter for civil penalty purposes in the above example is not the number of contraventions or the individual allocations. It is principally the facts which generated the situation in the first place (i.e. the origins of the letter of employment) and the fact that the employee has been underpaid $300.

740    The FWO advanced an allocation principle based on the order on which the entitlements were mentioned in the letter of employment. As I have indicated, my reading of the letter is that the parties to it wished to treat the entitlements under the Award equally. The FWO’s reading does have the virtue of leading to an allocation to the minimum wage entitlement first. However, attractive though that is the textual indicators (especially the defined term which lumps all of the entitlements together) suggest equality was the parties’ intention, not an order of ranking. The FWO also advanced a submission that its order was supported by the policies underpinning the entitlements. I do not think that this throws any light on the issue of allocation as between Woolworths and the employees.

741    Coles’ submissions proceeded on the assumption that its approach to the set-off clause had prevailed. The same results occur. Coles is entitled to set off within a payment period (here a fortnight). If sufficient payments are available to cover all of its obligations falling due in that fortnight, there will be no underpayment. If insufficient payments are available, the salary payment is to be distributed between its payment obligations on a pari passu basis.

G.3 Application of cl 27.3 to longest shift in the week

742    Issue 42(c) and (d) in FWO v Woolworths, which was adopted in Baker, ask:

(c) Can the employer reduce the number of hours that accrue overtime by attributing one day of the week as being rostered for 11 hours if the employer has not, in fact, published a roster for that week that has rostered the employee for more than 9 ordinary hours (and no more than 11 ordinary hours on one day in that week) as contemplated by clause 27.3(a) of the Retail Award?

(d) If the answer to (c) is “yes”, in circumstances where an employer has not designated in a roster the particular shift as the shift that can be rostered for up to 11 ordinary hours for the purposes of clause 27.3(a) of the Retail Award, should the shift of 11 ordinary hours be regarded as:

(i) the first shift in the week that is longer than 9 hours; or

(ii) the longest shift in the week?

743    In FWO v Coles, Issues 55 and 56 deal with the same question. Issue 56 asks:

Can the employer reduce the number of hours that accrue overtime by attributing one day of the week as being rostered for 11 hours if the employer has not, in fact, prepared a roster for that week that has rostered the employee for more than 9 ordinary hours (and no more than 11 ordinary hours on any day in that week) as contemplated by clause 27.3(a)?

744    The parties were unable to agree on the exact wording of Issue 55. The FWO’s preferred wording was:

If clause 27.3, read with clauses 29.2(a), (b) and (d), is triggered, is overtime calculated by:

(a) applying the 11-hour day to the first day in a week which is rostered more than 9 ordinary hours; or

(b) if there is more than 1 day in a week where a Salaried Employee is rostered more than 9 ordinary hours, attributing the 11-hour day to the day in the week on which the most hours are rostered for that Salaried Employee in that week?

745    Coles’ preferred wording was:

If clause 27.3, read with clauses 29.2(a), (b) and (d), is triggered, is overtime calculated by:

(a) applying the 11-hour day to the first day in a week on which is rostered more than 9 ordinary hours are worked; or

(b) if there is more than 1 day in a week where a Salaried Employee has worked is rostered more than 9 ordinary hours, attributing the 11-hour day to the day in the week on which the most hours were worked by are rostered for that Salaried Employee in that week?

746    Clause 27.3 provides:

Maximum ordinary hours on a day

(a) An employee may be rostered to work up to a maximum of nine ordinary hours on any day, provided that for one day per week an employee can be rostered for 11 hours.

747    Woolworths submits that in applying cl 27.3 it is entitled retrospectively to identify the day of the week that could be worked up to 11 ordinary hours and in doing so identify the longest shift in the week.

748    I have already explained how in the case of the Award the published roster is not itself a direct input into the calculation of overtime for it does not require an employee to perform the work in a published roster. In that regard, this Award differs from the award involved in United Voice. It is for this reason, as I have explained, that when employees under this Award flexibly adjust their own hours, this does not per se result in an overtime entitlement (contrary to the submissions of the FWO).

749    A corollary of this reasoning requires the rejection of Woolworths’ submission. The submission contemplates the drawing up, albeit retrospectively, of a published roster. However, for the reason given in the preceding paragraph, any such published roster would have no impact on questions of overtime which operates on actual hours worked rather than rosters.

750    In the case of cl 27.3 overtime will become payable under cl 29.2(a) once an employee has worked a single 11 hour day each time the employee thereafter works more than 9 hours in the same week.

751    Coles’ position was different. It submitted that it was straightforward to determine when overtime is triggered pursuant to cl 27.3. I agree for the reasons given in the preceding paragraph.

752    Coles then made two submissions. First, where an employee worked for more than 9 hours on at least two days of the week, Coles submitted it could choose which day was to count as the 11 hour day referred to in cl 27.3 which would then have the consequence that the other days on which more than 9 hours were worked would involve overtime after 9 hours.

753    This is best illustrated with an example. Consider an employee who works these hours:

754    The effect of Coles first submission is that it can select the 10 hour Tuesday as the 11 hour day in cl 27.3. This will have the consequence that the 11 hour day on Sunday is treated as overtime for the 2 hours after the first 9 hours. However, when that occurs the employee will not receive the Sunday loading. In effect, this is duplication of the result in United Voice and the point is the same: can the employer structure the roster to use overtime to trump penalty payments?

755    Coles’ second submission was that it was entitled to attribute the 11 hour day referred to in cl 27.3 to the day on which the most hours were worked by the employee. In the example above, the 11 hour day would be attributed to the Sunday and overtime would be payable for the Tuesday.

756    In any event, for the reasons I have given in relation to Woolworths, no question of allocation arises. The first time a day is worked which is more than 9 hours, the 11 hour day in cl 27.3 is enlivened. After that has occurred, all hours worked past 9 hours on a day in the rest of the week will be overtime.

G.4 Calculation of authorised leave and public holidays rostered but not worked

757    Issue 43 in FWO v Woolworths asks:

For the purposes of remediation calculations should authorised leave and public holidays not worked be calculated at:

(a) 7.6 hours each day, for up to 5 days in a week, at the employee’s contractual base rate of pay; or

(b) 7.6 hours for each day, for up to 5 days in a week, based on the employee’s ordinary rate of pay under the Retail Award?

758    Woolworths made a confined submission that the FWO had calculated the leave entitlements of the employees by applying the leave loading specified in cl 32.3(b)(i) (generally 17.5%) to the employees’ base (i.e. contractual) salaries.

759    On the assumption this is correct (I was not taken to any evidence about this), this is not what the Award requires. Woolworths is required to make two payments. First, it must pay each employee who takes annual leave pay at their base rate of pay: s 90(1) of the Act. Secondly, it must pay the loading specified in cl 32.3(b) (generally 17.5%) in the manner dictated in cl 32.3(a) (‘…an employee will receive a leave loading calculated on the rate of wages prescribed in clause 17 – Minimum weekly wages of this award’). Clause 32.3(a) is explicit that the loading itself is calculated by applying the penalty to the minimum wages under the Award. That loading is then added to the base rate of pay (paid under s 90(1)).

760    If the FWO did in fact apply the leave loading to the base rate of pay this will have been incorrect.

G.5 Hours worked methodology

The Problem

761    The FWO makes allegations against Coles in relation to 8,767 Salaried Employees across the Assessment Period which runs from 1 January 2017 to 31 March 2020. From that pool 42 Sample Salaried Employees were selected for the initial trial. Evidence was adduced from 15.

762    Whether Coles has contravened the Act by failing to pay the 42 Sample Salaried Employees in accordance with the Award involves an assessment of the position of each of those employees. Further, in determining what compensation is to be awarded under s 545 it will be necessary to determine the same matter.

763    Thus the FWO’s case against Coles requires a determination of the days and hours worked by the Sample Salaried Employees across the three year period. The reference to days and years is important. Some entitlements are partial functions of working on particular days whilst others are functions of hours of work on a particular day.

764    In some cases, there are sufficiently complete records for the days and hours worked by an employee to be determined. But in other cases, Coles’ records are insufficient. The evidence about days and hours worked comes from three sources:

(a)    Clocking records. A clocking record was created when an employee clocked on for work and when they clocked off. However, for most of the Sample Salaried Employees clocking was not available before September 2017. Thus, the clocking records are in many instances absent. In other cases, the clocking records are deficient; for example, an employee may have clocked on without clocking off or vice versa.

(b)    Roster records. These appear to be somewhat more complete. A complexity, however, is that the evidence shows that sometimes the employees did not work their rostered hours. For example, I have previously referred to the flexible approach some employees took to the starting and finishing times and there were other instances of shifts being swapped or TOIL being taken. These kinds of events were often enough not updated in the roster records. Thus, there were times when an employee was rostered but did not actually work and other times when they worked but were not rostered.

(c)    Evidence from or about the Sample Salaried Employees. In some cases, there was independent evidence either from or about particular employees about the hours and days they worked.

765    The FWO submits that the Court must adopt a methodology for determining the days and hours worked by the employees where the evidence is otherwise insufficient to permit its determination. In its closing submissions in this Court, Coles accepted that it would be necessary for the Court to determine a methodology and that the methodology selected would be applied to all 42 Sample Salaried Employees.

766    There is therefore no issue between the parties that, in this case, the Court should select an appropriate methodology. Some implications of this agreement should be noted:

(a)    The methodology will apply even where there is no evidence;

(b)    The methodology, once applied, will permit the determination of the amount of compensation each of the 42 Sample Salaried Employees is entitled to; and

(c)     The methodology, once applied, will permit the determination of the number and extent of Coles’ contraventions of the Award.

767    Propositions (a) and (b) are not controversial. The Court has adopted methodologies for determining compensation in an underpayments context before: Polan v Goulbourn Valley Health (No 2) [2017] FCA 30 at [75] per Mortimer J. Using a methodology is akin to the principle that a Court must do the best that it can to assess damages even if the evidence is not ideal (see, for example, Commonwealth of Australia v Amann Aviation Pty Ltd [1991] HCA 54 ; 174 CLR 64 at 83, per Mason CJ and Dawson J, 125 per Deane J, 153 per Gaudron J).

768    Proposition (c) is potentially more problematic. The findings of contravention will involve Coles being exposed to a civil penalty. Ordinarily, this would engage s 140 of the Evidence Act 1995 and, it being a serious conclusion that a corporation has breached a civil penalty provision, the Court would need to be correspondingly satisfied that the evidence was sufficiently cogent to justify such a conclusion.

769    In this case, Coles raises no such objection to adopting a methodology for assessing days and hours. Instead, it accepts that the Court should determine a methodology and the only dispute it raises is whether the methodology should be its or that of the FWO. Notwithstanding some misgivings about whether this is appropriate in a civil penalty context, the fact is that civil penalty proceedings are civil proceedings. If the parties, including the respondent, are content to approach the determination of civil penalty contraventions on this basis, then I see no reason for the Court to stand in the way.

The Methodologies

770    Although Coles’ submissions about this are very extensive the parties in fact agree on the appropriate methodology save for two matters. I now set out the FWO’s methodology and, where necessary, explain how Coles departs from that methodology.

(a)    Full Clocking Records Available. Where there is a complete clocking record on a day (i.e. both a clock-in and clock-out time), the employee is taken to have worked that day for the duration of the clocking period less one hour for an unpaid meal break. This is so regardless of whether the employee was rostered or not. Coles agrees with this approach.

(b)    Single-sided Clocking. If there is only a clock-in time the employee is taken to taken to have completed their shift at their rostered end time, or if not rostered, 9 hours after their clock-in time. Correspondingly, if there is only a clock-out time, the employee is taken to have commenced their shift either at the rostered start time or, if not rostered, 9 hours before their clock-out time. Coles in part disagrees with this approach. Where the FWO uses the available start or finish times in the roster to determine the missing clock-in or clock-out time, Coles suggests that it would be more sensible to use the shift length implied by the roster and to determine the missing clocked time in that fashion.

(c)    Roster Record Only. Where there is only a roster record and no clocking data or record of leave, the employee is taken to have worked the rostered day and the hours they were rostered to work. Coles agrees with this approach.

(d)    No clocking data and no roster record. The employee is taken not have worked for that day. Coles agrees with this approach.

(e)    Situations where in a roster cycle there are clocking records available but they do not account for the whole cycle. The FWO’s position is that the employee should be taken to have worked on the number of shifts obtained by summing the number of shifts implied by the clocking records with the number of shifts implied by the roster records. Coles accepts this in principle but says that the number of shifts thereby derived should not exceed the number of shifts in the roster. The same debate occurs at the level of hours. Although neither party really explained this, I took the FWO’s position to be that the hours worked by an employee would be taken to be the number of hours worked as revealed by the clocking records added to the number of hours of work in the roster. I take Coles’ position to be that this is acceptable but should be subject to a cap consisting of the total number of hours of work appearing in the roster.

(f)    Public holidays and annual leave. In the situations arising in (e), Coles also seeks to have deducted from the number of shifts in a fortnight any days on which a public holiday fell or on which leave was taken. It was not clear to me what the FWO’s position on this issue was. For the reasons I give below I prefer Coles’ position.

771    The issue in (f) has been determined already above at Part D.3. Days when an employee is rostered on but entitled not to be at work do count for roster purposes.

772    That leaves the two disagreements in (b) and (e). The parties’ submissions sought to vindicate their positions by reference to what the evidence showed about some of the Sample Salaried Employees. In my opinion, this enterprise is statistically pointless where the size of the sample is relatively small (<42). Whatever differences the parties are able to eke out of the evidence about this does not signify anything of sufficient significance to allow it to be used as a plausible basis for deciding a methodology.

773    Nevertheless, they agree a methodology must be applied. What is just therefore is to combine the parties’ methodologies. In (b), the missing clocked time will be that derived from averaging the output of the FWO and Coles’ methodologies. In (e), the same approach is to be taken.

G.6 Unrecorded Overtime Allegations

774    An issue arose in FWO v Coles regarding unrecorded overtime, though the parties were unable to agree on the exact wording. Coles’ version of Issue 9 asks:

(a) Should the Average Unrostered Overtime Hours approach (as pleaded by the FWO at ASOC [95] to [98] and as further particularised in the Applicant’s First FBP at Answers 30.1, 30.2, 30.3 and 31) be applied by the Court?

(b) If yes, is the FWO’s Average Overtime Figure to be used, or a Coles Average Unrecorded Overtime Figure?

775    FWO’s preferred wording was:

(a) Should the Average Unrostered Overtime Hours approach (as pleaded by the FWO at ASOC [95] to [98] and as further particularised in the Applicant’s First FBP at Answers 30.1, 30.2, 30.3 and 31) be applied by the Court?

(b) If yes, is the FWO’s Average Overtime Figure to be used, or a Coles Average Unrecorded Overtime Figure, and if s 557C applies, is Coles’ figure preferred because it has disproven the FWO’s allegation?

The FWO’s Position

776    It will be apparent from Part G.5 that the methodology to be used will result in employees for whom there is only a roster record being taken to have worked shifts on the days indicated in that roster and for the number of hours recorded in that roster.

777    Under the present heading, the FWO seeks to add to the hours worked for these kinds of employees a figure of 1.06 hours of overtime for each roster day.

778    That 1.06 hour figure has been calculated by examining the position of employees for whom there are both roster records and clocking records across the period 1 October 2017 to 31 March 2020. A comparison between the roster records across this period and the corresponding clocking records leads the FWO to submit that, on average, this class of employee worked for 1.06 hours more than the hours for which they had been rostered.

779    The FWO now seeks argue that this 1.06 hour average overtime figure should be applied to those employees for whom there are no clocking records and for whom there are only roster records (over the same period, 1 October 2017 to 31 March 2020).

780    As will be seen, despite some obscurity, Coles accepts that it is appropriate to extrapolate from the position of the employees with clocking records to the position of those without. The dispute it raises is whether the figure should be the 1.06 hours calculated by the FWO’s witness, Mr Klousia, or the 0.86 hours (or 0.87 hours for Full Time employees and 0.30 hours for Part Time employees) calculated by Coles’ expert, Ms Friend.

Coles Position

781    In the list of issues in the Coles proceeding, the question of extrapolation is Issue 9(a) which is in these terms:

‘(a)    Should the Averaged Unrostered Overtime Hours approach (as pleaded by the FWO at ASOC [95]-[98] and as further particularised in the Applicant’s First FBP at Answers 30.1, 30.2, 30.3 and 31 be applied by the Court?

782    Coles’ recorded formal position is in these terms:

‘Issue 9(a): If the Court concludes that it is appropriate (including for the purpose of achieving an efficient resolution of the proceeding within the meaning of s 37M of the Federal Court Act 1976 (Cth) (sic)) to depart from the orthodox approach of making findings about days and hours worked based only on the evidence adduced with respect to each of the Sample Salaried Employees, then Coles accepts that the FWO’s Average Unrostered Overtime Hours approach may be applied by the Court in this proceeding.’

(emphasis added)

783    As will be apparent from Part G.5 Coles is, in fact, content to ‘to depart from the orthodox approach of making findings about days and hours worked based only on the evidence adduced with respect to each of the Sample Salaried Employees’. Indeed, it agrees with the FWO that a methodology is to be applied in the case of employees for whom there are only roster records.

784    The antecedent in the first sentence of Coles’ response to issue 9(a) is therefore satisfied and the conclusion stated in that sentence follows. That conclusion is that Coles accepts that extrapolation is appropriate.

785    That Coles accepts extrapolation is appropriate therefore makes [372]-[436] of its submissions apparently pointless. In those paragraphs there are collected various criticisms of the extrapolation methodology and the evidence of one of the FWO’s witnesses, Mr Kemp. However, these all ended up at [437]-[439]:

437. The principal drivers of the different figures supplied by each of the experts were the definition of “overtime” and the question whether it is appropriate to apply the 7.75 Hour Filter. It is submitted that Ms Friend and Mr Klousia adopted the correct approach to the definition of “overtime” and that Ms Friend and Mr Kemp correctly eschewed the application of the 7.75 Hour Filter.

438. Coles submits that if the Court forms the view it is appropriate to use an average unrecorded overtime figure, then the Court should adopt the opinion of Ms Friend and use the figure of 0.86 hours (or 0.87 hours for Full Time employees and 0.30 hours for Part Time employees).

439. Alternatively, if the Court accepts all aspects of Ms Friend’s approach but considers that overtime should be set to zero for shifts where the clocked shift length was shorter than the rostered shift length, then adopting this approach would give rise to an average figure of 0.98 hours.666

786    Here it will be observed that Coles’ does not actually say what its position on extrapolation is. In her oral closing submissions on behalf of Coles Ms Doyle SC said this at T1338.25-.37:

Now, turning to that, which is item 10 on my list, this matter I have to deal with briefly. We substantially rely on our written submissions at 372 to 441. The regulator’s average unrostered overtime hours case concept is novel. There aren’t any previous cases where it has been done this way. Polan is an analogy, but a weak one at least in this sense, because your Honour will be aware what the regulator is doing is not divining an average amount of time that someone spent on a phone call doing call-out work, as Mortimer J was interrogating in that case; the Ombudsman is taking an average devised from the whole cohort, or at least a subset of data relevant to most of them, and urging this court to apply it to the shifts worked by everyone in the cohort.

If the court is minded to do that, then in that context Coles relies on the opinions of its expert and says, “Well, the regulator has the wrong number.”

787    This is, with respect, equally mysterious. The structure of Coles’ submissions therefore seems to be this:

(a)    In its answer to issue 9(a) Coles says that if the Court thinks it appropriate to use a methodology to determine hours worked then Coles does not disagree with extrapolation;

(b)    In its approach to the question of days and hours worked, Coles accepts that a methodology is appropriate;

(c)    In its written submissions on the present issue, it points out difficulties with extrapolation but does not submit in the conclusory section that it should not be adopted; and

(d)    In its oral submissions, a similar position is taken.

788    I propose to act on the formal answer Coles has given to issue 9(a) together with its agreement that a methodology is appropriate for assessing days and hours. In short, Coles accepts that extrapolation is appropriate.

The Correct Figure for the average hours

789    Before embarking on the evidence about this, it is worthwhile noting that Coles’ own internal documents suggest that it had calculated the average overtime hours worked by the salaried employees at between 1.0 hour and 1.5 hours per day. For example, in Slide 4 of a PowerPoint™ presentation entitled ‘Project Plum 2.0’ the author expresses the view that ‘Initial findings indicate that the average shift is an hour to an hour and a half over schedule per day’.

790    Mr Klousia assumed that it was sound to extrapolate from the employees for whom there were clocking records to those for whom there were not. Given that Coles’ accepts that extrapolation is appropriate, I proceed on the basis that Mr Klousia is correct about this.

791    Mr Klousia and Ms Friend both operated off the same data. This data was prepared from raw data out together by McGrathNicol and in its ‘cleansed’ form was known as the ’04 file’. Mr Klousia took the 04 file and did three things to it. First, he confined the relevant period to 1 October 2017 to 31 March 2020. Secondly, he applied certain filters to the data to remove certain shifts. Thirdly, he calculated the difference between the average rostered shift and the average clocked shift.

792    Using this method of calculation he derived the following:

Source        Hours         Shifts        Average shift length

Clock        14,239,097    1,564,875    9.099

Roster        8,315,680    1,033,896    8.043

793    He then subtracted 8.043 from 9.099 to arrive at the conclusion that the clocked shifts were 1.06 hours longer than the rostered shifts. It will be observed that Mr Klousia did not try to connect any given clocking record with a given roster record. Rather the approach was global and involved dumping all of the records into an unalloyed mass and performing the bulk calculation in the table.

794    Mr Klousia also assumed that overtime was not triggered merely because an employee worked outside their rostered shift but instead approached the matter on the basis that overtime was triggered when they worked in excess of those hours. It will be recalled that earlier in these reasons I have rejected the FWO’s submission that overtime was triggered merely by working outside roster hours. Mr Klousia’s assumption is consistent with that conclusion.

795    The only controversy concerns one of the filters applied in Mr Klousia’s second step, known as the 7.75 hour filter. This filter excluded from the data any shift which was less than 7.75 hours in duration. Mr Klousia’s reason for this in his initial evidence was that he did so in order to exclude part-time employees. In his subsequent evidence he changed his position on this. His final position was that he thought it appropriate to exclude shifts below 7.75 hours because they were anomalous for the salaried employees whose typical shift pattern was 8 hours. He thought the anomalies would include part-time employees who tended to work shorter shifts but also the effects of public holidays and split shifts.

796    This makes no sense to me and I do not understand it. The task at hand it to determine what the average number of overtime hours for those employees for whom there are both roster records and complete clocking records. A large proportion of these will be standard 8 hour shifts. But there will be employees who worked shorter and longer shifts than 8 hours. Since the apparent task is to calculate the average overtime worked by employees for whom there are clocking and roster records, I do not understand why shifts of any particular length should be removed from the data set.

797    Mr Klousia thought they were to be removed because they were anomalous. They are certainly anomalous in the sense that employees working less than 8 hours were not the usual situation. But I do not see why that kind of anomaly means that the overtime behaviour of employees working shifts shorter than 7.75 hours are to be ignored. Presumably, employees who worked shift of more than 8 hours are just as anomalous under Mr Klousia’s approach, but he did not suggest that their shifts should be removed from the data set. Further, as Ms Friend points out, the 7.75 hour filter tends to remove from the data set shifts where no overtime had been worked and therefore has an upward effect on the average figure.

798    I therefore agree with Ms Friend that the 7.75 hour filter is not appropriate. When Ms Friend removed the 7.75 hour filter and carried out the same calculation as Mr Klousia had above, the figure she arrived at was 0.87. I have set out Mr Klousia’s method of calculation above.

799    I have emphasised that Ms Friend carried out the same calculation as Mr Klousia to dispel the FWO’s criticism that Ms Friend had used the concept of negative overtime in her approach. When calculating the 0.87 figure, Ms Friend did not use a concept of negative overtime. She merely took the roster shift records and clocking records and performed the same calculation as Mr Klousia did. The only difference was that she did not apply Mr Klousia’s 7.75 hour rule to the data set.

800    It is true that she did refer to a concept of negative overtime in her (now irrelevant) debate with the FWO’s witness Mr Kemp illustrated in Table 2.2 in the Joint Expert’s Report dated 24 May 2023. But that table has nothing to do with the number 0.87 Ms Friend derived using Mr Klousia’s method (without the 7.75 hour filter). It is thus not necessary to enter upon the debate between the FWO and Coles about whether negative overtime is appropriate given that negative overtime has nothing to do with the manner in which Ms Friend derived the 0.87 figure.

801    For completeness, I do not think that the position of full-time and part-time employees should be distinguished.

802    I find that:

(a)    It is appropriate in assessing the overtime claims of employees for whom there are only roster records to extrapolate from the position of employees for whom there are clocking records and roster records in accordance with the methodology outlined by Mr Klousia.

(b)    It is not appropriate to apply Mr Klousia’s 7.75 hour filter to the data set.

(c)    The appropriate average overtime figure is Ms Friend’s figure 0.87 hours.

G.7 Pabalan Methodology

803    It will follow from my reasons above in Part F.3 that whilst I accept the broad thrust of Ms Pabalan’s case that she worked for longer hours than the rosters suggest, I do not accept that her evidence provides a sufficient basis for determining how much work she actually did.

804    This conclusion was not unforeseen by Ms Pabalan. She submitted that rather than relying upon her estimates (which I have not) the Court might instead utilise a methodology. In principle, I accept that if the evidence is sufficient it is permissible to utilise a methodology to overcome the difficulties which may inhere in incomplete time records.

805    However, Ms Pabalan’s submissions did not actually say what her methodology was. But she did indicate that the methodology was illustrated in an amply proportioned Excel spreadsheet attached to her submissions. Ms Pabalan submitted that the Court did not actually need to engage with this spreadsheet which was provided more for the information of Coles.

806    In that circumstance, I have not sought to determine what Ms Pabalan’s methodology is from the spreadsheet and, as I have said, Ms Pabalan’s submissions do not explain the methodology. Whatever the methodology was, it seems to rest on three sources of evidence:

(a)    Ms Pabalan’s rosters;

(b)    The clocking data; and

(c)    the location data from her phone records.

807    Ms Pabalan submits that the rosters do show which days she worked although they do not prove her working hours. The clocking data shows when she was certainly at work even if it does not show that the clocked times are when she arrived and left. On the other hand, the location data was said to show roughly where Ms Pabalan was at certain times. The phone records were also said to give some support to her evidence concerning working from home in the sense that it supported her case that she was at home texting or calling people about their shifts.

808    Since I do not know what the proposed methodology is, I do not accept it. On the assumption that Ms Pabalan has explained her methodology and that it is my deficiency in not being able to perceive that to be so, whatever that methodology is I do not think the available data is sufficient to provide a reliable estimate of when she worked. In particular, I do not think that I would be willing to find that Coles contravened the Act on the basis of this kind of material: Evidence Act, s 140. No doubt, using an Excel spreadsheet a number could be produced but I am not persuaded that this number would actually mean anything.

809    I therefore reject Ms Pabalan’s proposed methodology, whatever it was.

The Coles methodology

810    Coles submitted that I should find that Ms Pabalan failed to establish her case essentially for the reasons I have just given. Against the possibility that I might find that Ms Pabalan had a case but that I was not satisfied with her methodology, Coles proposed its own methodology in the alternative. I have considered whether it would be appropriate simply to impose Coles alternate methodology upon it. However, I do not think that it conceded that its methodology was appropriate. What it conceded was that if the Court thought that the evidence was sufficient to make findings then it proposed its own methodology. Since I do not accept the evidence is sufficient to justify findings I do not accept that Coles has accepted that its methodology is appropriate.

The FWO methodology

811    Neither party suggested that the FWO’s methodology in FWO v Coles should be utilised and I do not need to consider such a submission.

Section 557C

812    Prior to 15 September 2017 s 557C was not in force. For the reasons I have given, I would dismiss Ms Pabalan’s case prior to that date except in relation to clothing. Whilst I am satisfied that Ms Pabalan did work more than her rostered hours (and of her other claims in principle), the evidence is insufficient to quantify this. Repeated incantations of the word ‘methodology’ cannot resolve this problem.

813    After 15 September 2017, s 557C applies. I have explained how the provision works earlier in these reasons. Ms Pabalan gives evidence in her affidavits that:

(a)    she worked longer hours than she was rostered on;

(b)    she worked late nights and early mornings;

(c)    she frequently did not take unpaid meal breaks;

(d)    she worked from home on her phone; and

(e)    she sometimes had to come in and work on non-rostered days.

814    The effect of s 557C is that Coles must disprove these matters. I accept that the roster records show what days Ms Pabalan worked but I do not accept that they are evidence of the hours she worked. I accept that the clocking records can be used to show that Ms Pabalan was at a store between her clocking on time and her clocking off time. However, for reasons I have already given, I do not accept that they prove when she arrived at work or when she finished. I accept that Ms Pabalan’s mobile phone records may be used to demonstrate when she was at work.

815    As to (a), therefore, unless the phone records show for any particular day what her hours of work were, s 557C will entail that Coles has failed to discharge its burden of disproving the allegation.

816    The same reasoning applies in the case of (b) and (e).

817    In relation to (c), Coles fails to prove that Ms Pabalan took her unpaid meal breaks.

818    In relation to (d), Coles fails to prove that Ms Pabalan did not work from home as she alleges. This strikes me as a tough conclusion. However, Coles failed to operate an overtime system for these employees, and s 557C makes the ensuing evidentiary vacuum a calamity which belongs to Coles and not its employees.

819    The parties should apply these reasons to determine Ms Pabalan’s claims after 15 September 2017. To the extent that there is any further disagreement, the matter can be relisted.

PART H: COMPENSATION

820    The parties made submissions about the order in which overtime triggers should be approached. I have dealt with that issue above at Part G.1. They also made submissions about the FWO’s proposed general payment distribution order which I have dealt with above at Part G.2.

821    In FWO v Woolworths, Issues 44 and 47 ask:

Issue 44

(a) In circumstances where:

(i) the cumulative amount of the Contractual Entitlements paid to a Salaried Employee met or exceeded the cumulative amount of a Salaried Employee’s entitlements under the Retail Award in a particular 26-week period or other period; or

(ii) the cumulative amount of the Contractual Entitlements paid to a Salaried Employee’s entitlements was less than the cumulative amount of the Salaried Employee’s entitlements under the Retail Award in a particular 26-week period or other period (Contractual Shortfall) but Woolworths has made Remediation Payments to the Salaried Employee to meet the Contractual Shortfall; or

(iii) a Salaried Employee has a contract which provides that an annual salary will be paid in fortnightly instalments and the annual salary is expressed to have taken into account working 40 hours per week, overtime, weekends, public holidays and additional hours in setting the annual salary; or

(iv) a Salaried Employee has overall been paid amounts (including any Remediation Payment) in respect of a particular 12-month period or in respect of the whole of the Employment Period which were greater than the Salaried Employee’s entitlements under the Retail Award for the same period, then:

(b) has Woolworths contravened clause 23 (or any other term) of the Retail Award;

(c) if so, has Woolworths underpaid the Salaried Employee in respect of any Award Entitlements with respect to the particular 26-week period or other period; and

(d) has the Salaried Employee suffered any loss, or is there appropriate justification to invoke the Court’s discretion to make an order for compensation under s 545 of the FW Act?

(e) if the answer to issue 44(d) is yes, should the Calculation Employees be awarded compensation under s 545 of the FW Act to the extent that Woolworths paid them less than their minimum entitlements under the Retail Award for work performed in:

(i) a particular pay period; or

(ii) over a 26-week period, in accordance with the “Minimum Entitlements” clause in the employees’ contracts of employment; or

(iii) over a different period?

822    The issues between the FWO and Woolworths concerning compensation turn on s 545(1) and (2)(b) of the Act which provide:

545  Orders that can be made by particular courts

Federal Court and Federal Circuit and Family Court of Australia (Division 2)

(1) The Federal Court or the Federal Circuit and Family Court of Australia (Division 2) may make any order the court considers appropriate if the court is satisfied that a person has contravened, or proposes to contravene, a civil remedy provision.

Note 1: For the court’s power to make pecuniary penalty orders, see section 546.

Note 2: For limitations on orders in relation to costs, see section 570.

Note 3: The Federal Court and the Federal Circuit and Family Court of Australia (Division 2) may grant injunctions in relation to industrial action under subsections 417(3) and 421(3).

Note 4: There are limitations on orders that can be made in relation to contraventions of subsection 463(1) or (2) (which deals with protected action ballot orders) (see subsection 463(3)).

(2) Without limiting subsection (1), orders the Federal Court or Federal Circuit and Family Court of Australia (Division 2) may make include the following:

(a) an order granting an injunction, or interim injunction, to prevent, stop or remedy the effects of a contravention;

(b) an order awarding compensation for loss that a person has suffered because of the contravention;

(c) an order for reinstatement of a person;

(d) an order requiring a person to comply, either wholly or partly, with a notice (other than an infringement notice) given to the person by an inspector or the Fair Work Ombudsman.

823    This empowers the Court, in its discretion, to award compensation ‘for loss that a person has suffered because of the contravention’. The person must therefore suffer a ‘loss’ and that loss must be causally connected to the contravention. Whilst the ‘but-for’ test is unlikely to be the exclusive test by which causation is to be judged under s 545, it is a useful place to start. It is particularly useful, used carefully, as a criterion for excluding causation. Finally, s 545(1) is discretionary and the power may be used, in an appropriate case, to award less than full compensation for a loss.

824    There appear to be three issues between the FWO and Woolworths. These are:

(a)    The Bonus Payments Issue. Some Woolworths employees were paid bonuses under its Short Term Incentive Plan. Woolworths submitted, and the FWO denied, that these payments should be brought to account in assessing any loss that an employee suffered by reason of Woolworths’ contraventions of the Award.

(b)    The Salary Team Pay Review Issue. Woolworths has paid all of the Calculation Employees amounts intended to compensate them for underpayments of overtime (‘STPR payments’). The FWO accepts that these payments should be brought to account in determining the quantum of compensation. However, the FWO does not accept that the STPR payments have the effect of preventing the infringements to which they relate from arising.

(c)    The De Facto Set-Off Issue. Woolworths submits that even if its set-off clause is ineffective, nevertheless, in assessing whether an employee has suffered loss the Court should approach the question across the whole year of salary. For example, if the set-off clause is only effective within a pay period, then Woolworths seeks to bring to account to its credit in the assessment process for each fortnight where the salary payment exceeded the employee’s Award entitlement, the amount of that excess.

H.1 The Bonus Payments Issue

825    I do not accept that the loss suffered by an employee because Woolworths failed to pay that employee what the Award required to be paid is to be reduced because Woolworths made a bonus payment under the STIP. The relevant clause of the employment contract was as follows:

4) Short Term Incentive Plan [IF STIP ELEIGIBLE IN NEW ROLE]

In your current position, you are eligible to participate in the Woolworths Short Term Incentive Plan as varied from time to time (STIP). For the current financial year and in your current position, you have the potential to receive a payment under the STIP of up to a maximum of 20% of your Base Salary, less applicable taxation, based on the Company’s and your performance.

The Company will determine whether you are entitled to a payment under STIP, and the amount of any payment in its absolute discretion.

Any payments which the Company may determine to pay you under the STIP are:

(a) in addition to you Remuneration; and

(b) inclusive of the minimum level of superannuation contributions that the Company must make for you in respect of the amount of the STIP Payment under SG Legislation.

The Company may rescind, vary or replace the STIP at any time at its absolute discretion.

Nothing in this clause affects the right of either you or the Company to terminate this Agreement.

826    This is a separate contractual entitlement of the employee which is a function of the employee’s performance together with Woolworths’ performance. It is a payment in addition to the remuneration under the contract of employment and it is clear it is not a payment directly related to the performance of work. The terms of the agreement explicitly contemplate that if the superannuation guarantee levy charge is due on the STIP payment then Woolworths may deduct this from the STIP.

827    Woolworths will be entitled for a credit for a payment of STIP if it can show that the payment, or part of the payment, is causally connected to its contraventions. Put another way, if Woolworths can show that if it had paid the entitlements due in each payment period that it would have decreased the size of the STIP payments correspondingly, then I would accept that it would be entitled to a credit for the STIP payment. This would follow on orthodox principles of causation.

828    However, I was not taken to any such evidence. As such, Woolworths’ submission that it is entitled to a credit for the STIP payments rests on an unproved assumption of causality. There is no reason therefore to reduce its liability under s 545(1) by the amount of such payments.

829    To the extent that Woolworths reused the same submission to suggest that the discretion in s 545(1) should be exercised not to award this element, I do not accept that submission.

H.2 The Salary Team Pay Review Issue

830    It is not evident to me that there is any issue here. The FWO accepts that the STPR payments should be brought to account in determining compensation under s 545. What the FWO denies is that any such payment can have the effect of preventing the anterior infringement from arising.

831    I did not apprehend Woolworths to make such a submission. However, to the extent that any such argument was advanced I would not accept it. The question of contravention is to be assessed at the end of each pay period. What happens in that pay period cannot be retrospectively altered for contravention purposes.

832    Subsequent compensatory payments will be relevant for two purposes: (a) they are admissible in determining compensation under s 545; and, (b) they are relevant to the assessment of any penalty for contravention.

H.3 The De Facto Set-Off Issue

833    I have concluded that its annual set-off clause was not effective outside the fortnightly pay period. In that event Woolworths submitted that the Court should still assess an employee’s compensation across the whole year to determine whether loss had been suffered. In particular, the Court should bring to accounts to its credit each pay period where the employee was paid more than their Award entitlements. An example will illustrate the submission. Assume that:

(a)    an employee is paid $2,000 per fortnight;

(b)    the minimum Award wages for ordinary hours for a fortnight is $1,800;

(c)    for 21 fortnights of the year, the employee works only ordinary hours on weekdays and is entitled to no other payments or loadings under the Award;

(d)    for five fortnights of the year, the employee does overtime each fortnight to the value of $500; and

(e)    the employer makes no additional cash payment to the employee for the $500 payments in (d).

834    For the five fortnights in (d), Woolworths is entitled to set off the $200 it pays in excess of the wages for ordinary hours due under the Award (being the $2,000 in (a) less the $1,800 in (b)) against the $500 overtime it owes in each fortnight. But even with that set-off it was still obliged to pay the employee $300 in each of those fortnights. Its failure to make these five $300 payments is a contravention of the Award. The total underpayment is $1,500.

835    On other hand, across the 21 fortnights where it is only obliged to pay ordinary wages it pays $4,200 more than it was obliged to under the Award (($2,000)-$1,800)= $200 x 21=$4,200).

836    Woolworths’ submission is that in assessing the loss suffered by the employee because of Woolworths’ failure to pay $1,500 for the overtime for the five fortnights, the fact that he or she received $4,200 more than the Award required for the 26 fortnights should be set off against the $1,500 so that no compensation should be payable.

837    I do not accept this submission. The employee is to be restored to the position he or she would have been if the contraventions had not occurred. In that counterfactual, the employee would receive the $1,500 for overtime but they would still have received their full salary of $2,000 for the 26 fortnights. This is because Woolworths was always contractually obliged to pay the salary.

838    To the extent that the submission was advanced as invitation to reduce the compensation payable under s 545(1) by the exercise of the discretion, I reject the submissions for the same reasons.

839    A similar question was addressed by Issues 38 and 40 in Pabalan which ask:

Issue 38

If it is found that Coles has contravened s 45 of the FW Act as alleged, is Coles able to set off the cash salary component of the total financial compensation paid to any salaried employee against any liability it has to that employee under the FW Act?

Issue 40

Would it be appropriate within the meaning of s 545 of the FW Act to make an order for compensation which does not take into account the amount paid to an employee under the contract of employment that is over and above the minimum rate of pay in the Retail Award (the Over Award Amount) and should the Court exercise its discretion pursuant to s 545(2)(b) of the FW Act to reduce any compensation otherwise payable to a salaried employee by the Over Award Amount.

840    For the same reasons as above, Coles is not able to set off the cash salary component of the total financial compensation paid or ‘over-award’ amount against any liability it has to compensate any salaried employee under the FW Act.

H.4 FWO v Coles

841    Coles’ submissions were essentially the same as Woolworths although Coles did not advance an argument about bonus payments. In relation to the De Facto Set-Off Issue, Coles pursued the same result as Woolworths. However, it advanced an additional reason for doing so. It submitted that it was necessary so as to avoid double compensation. There is no double compensation. In the counterfactual where Coles paid the employee’s entitlements it necessarily continued to pay the employee’s salary since it was contractually obliged to do so. There would only double compensation if Coles elicited evidence (or the employment contract provided) that Coles was entitled to reduce its salary payments outside the payment periods. However, whilst this is what its contracts of employment provided for, this was not how they could lawfully operate. Coles’ double compensation submission only works when its erroneous understanding of the set-off clause is introduced into the counterfactual. However, for obvious reasons this cannot be done.

PART I: PLEADINGS AMENDMENT ISSUE

842    Lastly it is convenient to deal with an issue that arose in Pabalan in respect of amendments to the pleadings by the applicant. Issue 37 asks:

Is Coles able to rely on ss 544 and 545(5) of the FW Act in the manner set out at paragraphs 39A to 39C of its FAD?

843    Coles raises limitation defences in Pabalan. The relevant limitations periods appear in ss 544 and 545(5):

544 Time limit on applications

A person may apply for an order under this Division in relation to a contravention of one of the following only if the application is made within 6 years after the day on which the contravention occurred:

 (a) a civil remedy provision;

 (b) a safety net contractual entitlement;

 (c) an entitlement arising under subsection 542(1).

Note 1: This section does not apply in relation to general protections court applications, sexual harassment court applications or unlawful termination court applications (see subparagraphs 370(a)(ii), 527T(1)(a)(ii) and 778(a)(ii)).

Note 2: For time limits on orders relating to underpayments, see subsection 545(5).

545  Orders that can be made by particular courts

(5) A court must not make an order under this section in relation to an underpayment that relates to a period that is more than 6 years before the proceedings concerned commenced.

844    In answer to the whole claim, Coles pleads a limitation defence at §39A-39C of its Further Amended Defence. Neither the pleading nor the written submissions in support of that pleading are comprehensible and nothing is to be gained by burdening the reader with them except perhaps a useful comparison with Heironymus Bosch’s 1515 triptych The Garden of Earthly Delights.

I.1 The First Limitation Issue

845    The first issue (which arises from §39A of the amended defence) is straightforward. On 24 July 2020 Ms Pabalan filed an amended originating application which replaced the former respondent Coles Group Ltd with the correct and present respondent, Coles Supermarkets Australia Pty Ltd. That amendment took effect from 24 July 2020 as a result of order 3 made by the Court on 21 July 2020. The effect of s 545(5) is that no action is maintainable against Coles in relation to underpayments which occurred before 24 July 2014.

846    The next question is whether there are any claims being made for underpayments before 23 July 2014.

847    There are certainly group members who were employed before that date. That this is so emerges from the current group definition. It defines the group in certain ways but, relevantly, as including salaried managers employed by Coles in the six years prior to the original commencement date of the litigation. The original commencement date was 18 May 2020 and the six year period before that date commenced on 18 May 2014.

848    It is therefore possible that there is a group member who was employed between 18 May 2014 (six years before commencement of the proceeding) and 24 July 2014 (six years before Coles was joined as a party) who has a claim for underpayment relating to the short period between 18 May 2014 and 24 July 2014.

849    If such a person exists then I would accept that Coles is correct in its contention that s 545(5) would be an answer to any claim made by that person. I will return shortly to the question of whether it is appropriate to answer this apparently hypothetical issue.

I.2 The Second Limitation Issue

850    On three occasions the group definition has been changed. Coles submits that each time new group members were added to the group, the claims of those group members date from the date they were added to the group (i.e. it does not refer back to the start of the proceeding). It then says that the effect of s 545(5) is that those new members can only maintain claims in the six year period prior to the date of their addition to the group.

851    I am prepared to assume this is correct, although neither party discussed when amendments arising out of the same facts were to date from for the purposes of Division of 8.3 of the Federal Court Rules.

852    However, even making that assumption, Coles’ submission conceals further assumptions that the amendments which were made to the group definition resulted in additional group members being added to the group. The three occasions which are said to have resulted in additional members being added to the group are as follows:

853    Insofar as the Further Amended Originating Application is concerned, the amendments to the group definition appear in §4. It was in these terms:

4. The Applicant brings these proceedings

(1) for herself, and

(2) as the representative of a group constituted by all persons;

(a) employed by the Respondent (“Coles”) at any time within the period of 6 years ending on the date of the filing of the Originating Application herein (the “Relevant Period”),

(b) in a position

(i) in a supermarket in the “general retail industry” within the meaning of that phrase in the General Retail Industry Award 2010 (the “Award”),

(ii) the title of which was, or the title of which included the word, “manager”, “Coles Services Team Leader” or “Coles Services Team Leader Area Support” (a “Manager Position”), and

(iii) which was undertaken as a “full time employee” or “part time employee” as those terms are defined in the Award,

(c) who in any Pay Period in the Relevant Period worked a rostered hour

(i) which was on a Monday to Friday on what was for the purposes of the Award an evening,

(ii) outside the spread of hours from time to time prescribed in the Award for undertaking ordinary hours, or

(iii) on a Saturday, Sunday or Public Holiday; and

(d) to whom the Award applied in relation to their employment with the Respondent during the Relevant Period.

(the “Group” and a/the “Group Member/s”).

854    The insertion of ‘the Relevant Period’ potentially narrowed the group but it is true that the words added to §4(b)(ii) broadened the group. The other changes do not seem material to the number of persons in the group.

855    Insofar as the Second Further Amended Originating Application is concerned, it amended §4 so that it was in these terms:

4. The Applicant Ms Pabalan brings these proceedings

(1) for herself, and

(2) as the representative of a group constituted by all persons;

(a) employed by the Respondent (“Coles”) at any time within the period of 6 years ending on the date of the filing of the Originating Application herein (the “Relevant Period”), and

(b) who in the Relevant Period worked in a position:

(i) in a supermarket in the “general retail industry” within the meaning of that phrase in the General Retail Industry Award 2010 (the “Award”),

(ii) the title of which was, or the title of which included the word, “manager”, “Coles Services Team Leader” or “Coles Services Team Leader Area Support” (a “Manager Position”), and

(iii) which was undertaken as a “full time employee” or “part time employee” as those terms are defined in the Award;

(c) who in any Pay Period in the Relevant Period worked an rostered hour (or part thereof); and

(i) which was on a Monday to Friday on what was for the purposes of the Award an evening,

(ii) outside the spread of hours from time to time prescribed in the Award for undertaking ordinary hours, or

        (iii) on a Saturday, Sunday or Public Holiday; and

(d) to whom the Award applied in relation to their employment with the Respondent during the Relevant Period.

(the “Group” and a/the “Group Member/s”).

856    Apart from accidentally deleting the definition of ‘the Relevant Period’, it is difficult to see that this augmented the group except to the extent that the words ‘part thereof’ in (c) potentially add something. However, I think it almost impossible to imagine that there was an employee who had only worked a partial hour but who had not also worked a complete hour.

857    Insofar as the Third Further Amended Originating Application is concerned, §4 is as follows:

4. Ms Pabalan brings these proceedings

(1) for herself, and

(2) as the representative of a group constituted by all persons;

(a) employed by Coles at any time within the Relevant Period, and

(b) who in the Relevant Period worked in a position:

(i) in a supermarket in the “general retail industry” within the meaning of that phrase in the Award,

(ii) the title of which was, or the title of which included the word, “manager”, “Coles Services Team Leader” or “Coles Services Team Leader Area Support”, and

(iii) which was undertaken as a “full time employee” or “part time employee” as those terms are defined in the Award;

(c) who in the Relevant Period worked an hour (or part thereof); and

(d) to whom the Award applied in relation to their employment with the Respondent during the Relevant Period.

858    This did not make any changes to the group definition and one can therefore be confident that there are no persons who were added to the group on 8 March 2022 to whom the six year cut-off date of 8 March 2016 could be apposite. The last part of §39C of the amended defence which raises this issue is therefore misconceived.

I.3 Should This Issue Be Decided?

859    There is a significant likelihood that the present debates may be purely hypothetical. I was not invited to try any of the group members claims and I had understood that only Ms Pabalan’s claims were to be tried. I accept that the parties did formulate Issue 37 which can only relate to the limitation issues concerning group members. However, I think it unwise to resolve these issues in the absence of being pointed to a person who is affected by the outcome. I am also concerned that insufficient attention may have been paid to Division 8.3 of the Rules.

CONCLUSIONS

860    These reasons are sufficient for the very large number of questions posed by the parties to be answered although in some cases the answer will be that the question does not arise. I do not think however that their efforts should be directed at answering those questions based on my reasoning. The parties’ conflicting lists of issues have been a distinct hindrance in this litigation and it were best if perhaps the Full Court were not troubled by them. Rather, the parties should now do what I have indicated at the start of these reasons which is to identify for each conclusion a person for whom that conclusion has a concrete effect. There need only be a single such effect, i.e., the fact may be as narrow as the overtime entitlement on a single shift.

861    Subject to the views of the parties, the course I would propose to take is that once one such person is identified for each issue I have resolved, I will make appropriate declarations in respect of that person and their relevant entitlement. I do not see that there can be any disagreement about facts of this kind. That being so, the parties should agree the terms of the declarations. Those declarations will then provide a clear platform for any appeals or cross-appeals.

862    There will of course be other issues about the future conduct of the proceedings. These can be discussed at a case management hearing on Monday 27 October 2025 at 9.30am.

863    I would make these final observations. The conduct of two regulatory actions which are partially representative in nature alongside similar but not identical class actions raises unique procedural challenges. Whilst I would not wish to definitive about how litigation of this kind might be handled in the future I am confident that they should not be handled the way these four cases were. What the parties in this case substantively wanted was the resolution of construction issues in the Award. There should never have been sample employees. The construction issues should have been identified in a single list and facts should have been agreed about actual employees which made those questions real. No attempt should have been made to move beyond the construction issues. Had that been done, the case would have been heard much faster and judgment delivered more quickly. Armed with what the Award meant, the parties could coherently have moved to questions of quantification. By permitting quantification into the picture, the proceedings became unacceptably complex. This should not be done again.

Associate:

Dated:    5 September 2025