Federal Court of Australia

WorkPac Pty Ltd v Coal Mining Industry (Long Service Leave Funding) Corporation [2026] FCA 874

ORDERS

THE COURT ORDERS THAT:

1. The Separate Questions be answered as follows:

(a) For each of the 10 sample employees of the applicant listed in Schedule A to the Separate Questions, and during the period that their employment was subject to the relevant “Notices of Offer of Casual Employment”, including any general terms and conditions that applied to that notice of offer (Sample NOCE), their “eligible wages” were to be calculated for a reporting period, as follows:

(i) Each employee’s “base rate of pay” was the “flat rate” of pay specified in the relevant Sample NOCE less:

A. for the employees whose employment was subject to the Eighth to Tenth NOCEs, the casual loading as specified in those NOCEs;

(ii) Each employee’s “base rate of pay” (as identified in order (1)(a)(i)(A)) should have been multiplied by the hours worked by the employee in his or her employment, insofar as they corresponded with the rostered hours worked by the employee.

2. The parties provide minutes of proposed orders in accordance with the Court’s reasons for judgment for the Court’s consideration, and if not agreed, seek a relisting of the proceeding, by 4 pm on 29 July 2026.

3. If the parties do not reach agreement on the orders to be made as to costs:

(a) by 4 pm on 22 July 2026, each party is to file written submissions of no more than 3 pages; and

(b) by 4 pm on 29 July 2026, each party is to file any written submissions in response of no more than 3 pages.

4. The issue of costs is to be decided on the papers.

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

REASONS FOR JUDGMENT

YOUNAN J:

1. INTRODUCTION

1 The Coal Mining Industry (Long Service Leave) scheme is a federal statutory scheme established by three pieces of legislation. The Scheme mandates that “eligible employees” in the black coal mining industry are entitled to long service leave based on their total service in the industry, rather than their service with a particular employer.

2 The Scheme involves three steps: first, an employer pays a levy calculated with reference to the “eligible wages” of an “eligible employee”; second, when an employee takes long service leave, regardless of the length of their service to an employer, their employer at that time pays the entirety of the employee’s long service leave entitlements; and third, the employer is entitled to reimbursement from the Coal Mining Industry (Long Service Leave Funding) Corporation for the amount paid out to the employee for their long service leave.

3 The dispute concerns the calculation of a levy that the applicant, WorkPac Pty Ltd, is required to pay into the Scheme for eligible employees by reference to a “base rate of pay”. The calculation of the levy raises two broad issues of construction, referred to as the “rates issue” and “hours issue”: (a) how is the “base rate of pay” to be determined; and (b) by what number of hours is the base rate to be multiplied?

1.1 Claims

4 By originating application dated 11 May 2022, WorkPac seeks: first, a declaration under s 52C(1) of the Coal Mining Industry (Long Service Leave) Administration Act 1992 (Cth) (Administration Act) and s 21 of the Federal Court of Australia Act 1976 (Cth) (FCA Act) that the Corporation’s administration of the Scheme is contrary to law; second, an order under s 52C(1) of the Administration Act and s 23 of the FCA Act that the Corporation withdraw a Guidance Note regarding the same; third, a declaration under s 52C(1) of the Administration Act and s 21 of the FCA Act that WorkPac overpaid the levy to the Corporation (in the sum to be particularised after the close of pleadings); and fourth, an order under ss 48 and 52C(1) of the Administration Act and s 23 of the FCA Act that the Corporation reimburse WorkPac for those overpayments.

5 The Corporation, by its notice of cross-claim filed on 14 February 2024 (and as amended on 16 May 2025), seeks orders that WorkPac pay the levy, and an additional levy by way of penalty, on the basis that on a proper construction of the legislation, WorkPac had in fact underpaid the levy.

1.2 Separate Questions

6 On 1 May 2024, Justice Bromwich ordered that the Court determine separate questions submitted by the parties before determining other issues, pursuant to r 30.01 of the Federal Court Rules 2011 (Cth). The separate questions are intended to resolve the issues of statutory construction by reference to ten sample “eligible employees” of WorkPac, who are representative of a cohort of WorkPac’s eligible casual employees (sample employees).

7 On 25 June 2025, by consent, the Court ordered that (what was) question 1(a) to (e) be withdrawn on the basis that the propositions contained therein were agreed facts.

8 The separate questions are confined to the period commencing 4 July 2012 and ending 31 December 2023 (Claim Period).

2. BACKGROUND

2.1 The applicant and cross-respondent

9 The applicant and cross-respondent, WorkPac, employs workers in the coal mining industry, including on a casual basis. These casual employees are deployed to work for WorkPac’s clients as needed. WorkPac is an “employer” for the purposes of the Administration Act and Coal Mining Industry (Long Service Leave) Payroll Levy Collection Act 1992 (Cth) (Collection Act), as agreed by the parties.

2.2 The respondent and cross-applicant

10 The respondent and cross-applicant, the Corporation, is a federal statutory corporation which administers the Scheme and manages its funds: see Pt 2 of the Administration Act.

2.3 The Scheme

11 The Scheme is a unique, portable long service leave arrangement for the black coal mining industry and is created by the three statutes listed below. For the purposes of answering the separate questions, these statutes will be considered in the form subsisting during the Claim Period:

(1) the Administration Act (as at 1 September 2021);

(2) the Coal Mining Industry (Long Service Leave) Payroll Levy Act 1992 (Cth) (Levy Act) (as compiled on 12 January 2012); and

(3) the Collection Act (as at 1 September 2021).

12 The Levy Act and the Collection Act should be read as one Act, together with the Administration Act, so as to create a single harmonious Scheme: ENT19 v Minister for Home Affairs (2023) 278 CLR 75 at [87] per Gordon, Edelman, Steward and Gleeson JJ, citing Gageler J in SAS Trustee Corporation v Miles (2018) 265 CLR 137 at [41]; see also Hitachi Construction Machinery (Australia) Pty Ltd v Coal Mining Industry (Long Service Leave Funding) Corporation (2024) 306 FCR 486 (Hitachi Construction) at [2] and [197].

13 The history and key features of the Scheme have been set out by the Full Federal Court in Coal Mining Industry (Long Service Leave Funding) Corporation v Commissioner of Taxation (Cth) (1999) 85 FCR 416 at [2]-[5], and more recently in Hitachi Construction at [12]-[14] and [17]-[18]. Certain key aspects of the Scheme, as it has operated since amendments in 1992, should be reiterated.

14 An eligible employee’s long service leave entitlement is calculated by reference to the number of “working hours” that they worked for one or more employers: ss 39A and 39AA of the Administration Act. An employee retains their entitlement as they move between employers in the industry, as they are granted long service leave by reference to the length of their “qualifying service”: s 39A of the Administration Act.

15 As a result, when an employee uses their entitlement, their employer at that time is financially liable regardless of the length of the employee’s service to that particular employer: ss 39AC and 39AD of the Administration Act. Thus, to distribute the financial burden amongst employers in the industry, the Scheme requires an employer to pay a levy to the Corporation, which is calculated based on the service of its employees: ss 3, 4 and 5 of the Levy Act.

16 The levy payments are pooled and invested by the Corporation: ss 7, 40 and 42 of the Administration Act. These funds are then used to reimburse an employer for payments made to an employee taking long service leave: ss 44 and 45 of the Administration Act. The possibility of shortfall or excess in the Corporation’s fund is addressed at ss 40-43 of the Administration Act in the following way:

(1) the levy amount can be adjusted from time to time;

(2) the Corporation has the power and obligation to invest the funds prudently; and

(3) the Corporation has the power to distribute excess funds to the industry.

17 The levy was adjusted during the Claim Period; it was set at 2.7% both prior to 1 July 2018 and after 1 July 2023, and 2% from 1 July 2018 to 30 June 2023.

2.4 Legislative Framework of the Scheme

18 The Levy Act imposes the levy on employers as follows:

4 Imposition of levy

Levy is imposed on eligible wages paid to eligible employees after the commencement of this Act.

5 Rate of levy

The rate of the levy is the prescribed percentage of the eligible wages paid.

6 Person liable

Levy on eligible wages paid to eligible employees is payable by the person who paid those wages.

19 Section 3 of the Levy Act provides that the Collection Act is incorporated, and is to be read as one, with the Levy Act. The Collection Act provides the definition of “eligible wages” in s 3B:

3B Meaning of eligible wages

…

(3)     If an eligible employee is a casual employee, the employee’s eligible wages are the base rate of pay paid to the employee, including incentive-based payments and bonuses.

…

20 Section 3 of the Collection Act defines “base rate of pay” as having the same meaning as in the Fair Work Act 2009 (Cth), which provides at s 16:

16 Meaning of base rate of pay

General meaning

(1)    The base rate of pay of a national system employee is the rate of pay payable to the employee for his or her ordinary hours of work, but not including any of the following:

(a)    incentive-based payments and bonuses;

(b)    loadings;

(c)    monetary allowances;

(d)    overtime or penalty rates;

(e)    any other separately identifiable amounts.

2.5 Enterprise Agreements

21 Two relevant Enterprise Agreements were applicable to the eligible employees at WorkPac during the Claim Period:

(1) the WorkPac Pty Ltd Mining (Coal) Industry Enterprise Agreement 2012 (2012 EA), from 4 July 2012 to 4 July 2019; and

(4) the WorkPac Coal Mining Agreement 2019 (2019 EA), from 5 July 2019 to 31 December 2023.

22 Under the 2012 EA, employees were referred to as “Field Team members” (FTM). This nomenclature was replaced in the 2019 EA with “Coal Mine Workers” (CMW).

23 In each EA, an employee could be designated as either a “Base Rate” FTM/CMW or “Flat Rate” FTM/CMW (for ease of reference, Base Rate employee or Flat Rate employee). Whether an employee was a Base Rate employee or Flat Rate employee dictated the applicable remuneration structure. The sample employees were engaged as Flat Rate employees during the Claim Period.

24 A Flat Rate or Base Rate employee was further categorised based on their status of employment, viz., full-time; part-time; casual; on a limited/fixed term or assignment; or, under the 2012 EA, employed for a specific project or task. The sample employees were engaged as (Flat Rate) casual employees during the Claim Period.

25 The Flat Rate and Base Rate employee remuneration structures shared a common classification structure, which was based on an employee’s skills, qualifications and experience, and the business needs of an assignment.

26 Base Rate employees were entitled to the minimum hourly base rate for their classification set out in Sch 2 of each of the EAs, as well as any additional allowances, overtime or other loadings. Flat Rate employees were entitled to the flat rate for their classification, as prescribed in Schs 3 to 7 of both EAs. The rate included loadings such as overtime, annual leave and allowances.

27 In the 2012 EA, Schs 3 to 7 set out the minimum rates that applied to Flat Rate employees according to a number of variables such as when the employee worked; their classification; their status as permanent or casual; the maximum average number of hours and days that they worked in a given roster period; as well as the type of shifts that they worked.

28 The 2019 EA simplified the minimum pay structure related to Flat Rate employees. Schedules 3 to 7 set minimum flat rates for an average “35-45 hour week”, and provided for a fixed rate for “non-rostered overtime”. The minimum rate also varied according to when the employee worked; their classification; their status (i.e., permanent, casual, trainee); and the types of shifts they worked.

29 Both EAs contemplated Flat Rate employees working varying rosters or work patterns. For example, a Flat Rate employee may work for five days on, with two days off; or four days on, with four days off, amongst other options.

30 The 2012 EA stipulated at cl 9.1.1 that the ordinary hourly wage rate for Base Rate and Flat Rate employees was as follows:

9.1.1     At the election of the Company an FTM will be paid either:

Base Rate FTMs

(a)     The base rate as prescribed in Schedule 2 for each classification. Base rate FTMs are also entitled to allowances (except as specifically incorporated), overtime and any other entitlements as set out in this Agreement.

Flat Rate FTMs

(b)     The flat rate of pay as prescribed in Schedules 3, 4, 5, 6 and 7 for each classification. Flat rates are provided as compensation for all work (including overtime, weekend penalties, public holiday loadings, shift penalties, annual leave loading (where applicable), casual loading (where applicable), any industry and special allowances that apply to all FTMs covered by this Agreement and any industry and special allowances specifically incorporated that may not apply to all FTMs covered by this Agreement. Flat Rate FTMs shall also be entitled to any applicable allowances (which have not already been specifically incorporated) provided for by this Agreement unless such allowance is identified as applying only to Base Rate FTMs.

31 Clause 9.1.1 of the 2019 EA was in materially the same terms.

32 Clause 6.4.5 of the 2012 EA specified the way in which casual employees were to be paid based on their designation as Base Rate or Flat Rate employees:

6.4.5 Casual FTMs will be for a minimum of four (4) hours:

(a) A person engaged as a base rate casual, as defined in clause 9.1.1, will be paid a casual loading of 25% on the rates prescribed herein. The casual loading is in lieu of all paid leave entitlements (with the exception of long service leave).

(b) A person engaged as a flat rate casual, as defined in clause 9.1.1, will not be paid an additional amount as the casual loading has been incorporated into the flat rate of pay.

33 The 2019 EA outlined the same at cl 6.4.6, but expanded on subcl 6.4.6(b) as follows (emphasis added):

6.4.6 Casual CMWs will be engaged for a minimum of six (6) hours (subject to the inclement weather provisions set out in clause 26.2);

(a) A person engaged as a Base Rate casual, as defined in Clause 9.1.1, will be paid a casual loading of 25% on the base rates prescribed herein. The casual loading is in lieu of all paid leave entitlements to which a Full Time or Part Time or Fixed Term or Assignment CMW are entitled to (with the exception of long service leave).

(b) A person engaged as a Flat Rate Casual CMW, as defined in Clause 9.1.1, has the casual loading referred to in clause 6.4.6 incorporated into the flat rate of pay (i.e. the casual loading of 25% on the base rate of pay for the applicable classification is incorporated into the flat rate of pay).

34 Schedule 2 of both EAs identified the ordinary hourly rate for Base Rate employees, applicable to different classifications of employees, with delineated yearly increases. The table identified the base rate with and without casual loading. Schedules 3-7 identified the flat rate for different categories of Flat Rate employees – i.e., permanent or casual – depending on inter alia the time of day the hour is worked.

35 In both EAs, “ordinary hours of work” was defined to mean a maximum of 35 hours per week.

2.6 Industry Awards

36 WorkPac submits that each of the sample employees was covered by either the Black Coal Mining Industry Award 2010 (2010 Award) or the Black Coal Mining Industry Award 2020 (2020 Award), and that both Awards continued the pre-existing standard that employees’ ordinary hours of work were to be 35 hours per week, averaged over a roster cycle.

37 This was the subject of contention (although the parties agreed that a determination as to award coverage was not a necessary component of answering the Separate Questions, as described below).

2.7 Contracts of Employment

38 WorkPac’s sample employees were contracted under a Notice of Offer of Casual Employment (NOCE). Some sample employees were also provided with Terms and Conditions of Employment.

3. SEPARATE QUESTIONS

39 Following the hearing, by order made by consent on 25 June 2025, the following facts were agreed:

(1) The 10 sample casual employees of the applicant listed in Schedule A were:

(a) covered by the 2012 EA and/or 2019 EA;

(b) “Flat Rate FTMs” under the 2012 EA and/or “Flat Rate CMWs” under the 2019 EA;

(c) a party to a contract with the applicant in the form of one of the applicant’s template “Notices of Offer of Casual Employment”, including any general terms and conditions that applied to that notice of offer (Sample NOCE);

(d) “eligible employees” for the purposes of s 4 of the Administration Act; and

(e) persons for whom the applicant was required to pay “levy” under the Levy Act, with respect to “eligible wages” as defined in section 3B(3) of the Collection Act.

40 These agreed facts are in addition to the Statement of Agreed Facts filed on 18 December 2024.

41 The remaining separate questions are concerned with the proper construction of “eligible wages” in s 3B of the Collection Act, which in turn informs the levy to be paid into the Scheme for long service leave entitlements, calculated as a percentage of “eligible wages”. The questions are as follows (Separate Questions):

(1) For each of the 10 sample employees of the applicant listed in Schedule A [to the Separate Questions], and during the period that their employment was subject to the relevant Sample NOCE, how were their “eligible wages” to be calculated for a reporting period, and specifically:

(a) was each employee’s “base rate of pay”:

(i) the “flat rate” of pay specified in the relevant Sample NOCE;

(ii) the minimum “ordinary hourly rate” of pay contained in Sch 2 of the 2012 EA or 2019 EA (as applicable) that applied to the employee’s equivalent classification; or

(iii) the “flat rate” of pay specified in the relevant Sample NOCE less a casual loading of:

(A) for each of the 10 sample employees, 25% of the minimum “ordinary hourly rate” of pay contained in Sch 2 of the 2012 EA or 2019 EA (as applicable) that applied to the employee’s equivalent classification; or

(B) for the employees whose employment was subject to the Eighth to Tenth Sample NOCEs, as specified in the relevant Sample NOCE; or

(iv) for the employee whose employment was subject to the Tenth Sample NOCE, the amount described as the “base rate of pay” in the Tenth Sample NOCE (i.e., excluding what the Sample NOCE describes as the “All Purpose Loading” amount, the “casual loading” amount and the “Flexible Reward Scheme” amount); or

(v) another “base rate of pay” not specified above?

(b) should each employee’s “base rate of pay” (as identified in answer to 1(a) above) have been multiplied by:

(i) the hours worked by the employee in his or her employment;

(ii) the “ordinary hours” worked by the employee, and if so, were those “ordinary hours”:

(A) a maximum of 35 hours per week, or an average maximum of 35 hours per week over a roster cycle;

(B) the rostered hours worked by the employee;

(C) the hours within the usual or standard spread of hours worked by the employee;

(D) those hours for which the employee was paid the “flat rate” of pay specified in the relevant Sample NOCE;

(E) for the employees whose employment was subject to the First and Second Sample NOCEs, 38 hours plus any additional reasonable hours worked in the employee’s rostered arrangements;

(F) for the employees whose employment was subject to the First and Second Sample NOCEs, 38 hours per week; or

(G) 35 hours per week; or

(iii) a sum of hours derived from the application of a methodology not specified above?

(c) were the employees paid any “incentive-based payments” or “bonuses” for the purposes of ss 3B(3) and (4)(c) and (d) of the Collection Act, and if so, how should those amounts have been incorporated into the calculation of “eligible wages”?

42 In order to answer the specific questions presented, it is necessary to address two fundamental issues, noting that the questions are confined to the Claim Period.

3.1 Hours issue

43 The first issue arises on consideration of question 1(b) of the Separate Questions: viz., for the purpose of calculating an eligible employee’s base rate of pay, what is the number of hours by which the base rate should be multiplied?

44 As stated at paragraph [19] above, s 3B(3) of the Collection Act provides the definition of “eligible wages”. Relevantly, for a casual employee, the “eligible wages” are “the base rate of pay paid to the employee, including incentive-based payments and bonuses”.

45 Section 3B of the Collection Act refers to the base rate of “pay paid” (emphasis added). The parties agree that to determine an amount paid requires that the base rate of pay be multiplied by the hours worked.

46 However, s 3B does not address whether the base rate of pay paid ought to be calculated by reference to the number of hours actually worked or to the employee’s ordinary hours (and if the latter, how ordinary hours should be construed in the context of the Scheme).

47 WorkPac contends that the answer is a maximum of 35 hours per week, or an average maximum of 35 hours per week over a roster cycle (para 1(b)(ii)(A) of the Separate Questions). The “ordinary hours of work” referred to in s 16(1) of the Fair Work Act should accord with the number of hours used to calculate the amount of long service leave accrued and given.

48 The Corporation contends that eligible wages paid means the base rate of pay paid for actual hours worked (para 1(b)(ii)(B) of the Separate Questions). The reference to “ordinary hours of work” in s 16(1) of the Fair Work Act speaks to the category of time or hours to which the base rate applies, as distinct from, e.g., overtime. In the alternative, the Corporation submits that if the calculation is referable to ordinary hours, there is no cap at 35 hours per week.

3.2 Rates issue

49 The second issue arises on consideration of question 1(a) of the Separate Questions: viz., for the purposes of calculating “eligible wages”, what is an employee’s “base rate of pay”?

50 The crux of the issue is the identification of a “base rate” within a flat rate, which is a “loaded” rate that encompasses elements of remuneration, such as casual loading and allowances.

51 WorkPac contends that the base rate is the minimum “ordinary hourly rate” of pay contained in Sch 2 of the 2012 EA or 2019 EA (para 1(a)(ii) of the Separate Questions). This corresponds with an understanding that the flat rate should be assessed on the assumption that the “base rate” (or other minimum rate identified in the tenth NOCE) constitutes the base rate of the flat rate, upon which the other entitlements are loaded.

52 The Corporation contends that the “base rate” is the flat rate in the relevant Sample NOCE (para 1(a)(i) of the Separate Questions). This corresponds with an understanding that the flat rate cannot be disaggregated into constituent parts, such that entitlements such as casual loading can be stripped away to reveal a base rate.

4. HOURS BY WHICH THE BASE RATE IS MULTIPLIED

4.1 Policy of the Scheme

53 WorkPac submits that the Scheme is predicated on a direct connection between the amount that an employer is levied and the amount that is reimbursed by the Corporation, such that the methodology for the calculation of the levy correlates with the methodology for the calculation of reimbursement. It is said that the purpose of this correlation is to promote equity and efficiency.

54 This approach is informed by an assumption that, as at 1992, the relevant industrial instruments were uniform in relation to long service leave entitlements.

55 WorkPac submits that s 44(1) of the Administration Act, which stipulates the method to calculate an employer’s reimbursement from the fund, is the “fulcrum” of the Scheme, citing the comments on the section in the Explanatory Memorandum, Coal Mining Industry (Long Service Leave) Funding Bill 1992:

To promote horizontal equity between contributors to the Fund, the clause limits the amount that may be reimbursed in respect of each claim. Contributors are prevented from entering into artificial arrangements with eligible employees which may result in inflated and disproportionate claims being made on the Fund.

A claim for reimbursement may only be in respect of “eligible wages” as defined in the Payroll Levy Collection Act 1992.

56 The amendments to the Administration Act brought about by the Coal Mining Industry (Long Service Leave) Legislation Amendment Act 2011 updated the Scheme in the form it took during the Claim Period. In the second reading speech, the then Minister for Infrastructure and Employment, Mr Anthony Albanese, stated:

A key imperative of the working party proposals was to improve the operation of the scheme so that the amounts that employers are reimbursed from the Coal Mining Industry Long Service Leave Fund in respect of long service leave payments more closely correspond to the amounts that they have paid into the fund by way of levy.

57 The Corporation submits that the 1992 Explanatory Memorandum should be understood in terms of the change from an excise on production to wages as the basis of the imposition of the levy, and that the reference to horizontal equity is concerned with equity between contributors to the fund, and not a correlation between input to, and output from, the fund. The mischief is identified in the Explanatory Memorandum: viz., artificial arrangements that may result in inflated and disproportionate claims being made on the fund (beyond 35 hours).

58 WorkPac says that one way of avoiding inflated and disproportionate claims is to apply the same methodology to every employer as to input and output.

59 However, that is not the change of which the Explanatory Memorandum speaks. The salve to which the Explanatory Memorandum makes reference is the claim for reimbursement “only” in respect of “eligible wages” as defined in the Collection Act. WorkPac seeks to prescribe a further limitation on how “eligible wages” should be construed. Support for that limitation is not found in the Explanatory Memorandum.

60 Furthermore, inherent in any objective of “closer correspondence” between the amount paid into the fund and the amount reimbursed, is an acknowledgement that correspondence may not be complete. As Raper J recognised in Coal Mining Industry (Long Service Leave Funding) Corporation v Hitachi Construction Machinery (Australia) Pty Ltd (2023) 322 IR 129 at [39]: “the quantum of levy that an employer may have contributed for a particular eligible employee is not the same as the quantum of reimbursement that is made to the employer that grants and pays the leave. The amounts of levy contributed and the amounts which are reimbursed do not correspond”.

4.2 Significance of “ordinary hours of work”

61 The definition of “eligible wages” in s 3B of the Collection Act makes no reference to ordinary hours of work. The concept arises through the reference to the “base rate of pay” in s 3B of the Collection Act, which is defined in s 16(1) of the Fair Work Act as “the rate of pay payable to the employee for his or her ordinary hours of work”.

62 The Fair Work Act does not provide a general definition of “ordinary hours of work”. Under s 147, an industry award must include terms specifying the ordinary hours of work for each classification of employee. Section 20(2) sets out the meaning of “ordinary hours of work” for an employee that is not covered by an award or agreement. For an employee who is not a full-time employee, this is capped at 38 hours: s 20(2)(b) of the Fair Work Act.

63 “Ordinary hours of work” is not defined in the Levy Act.

64 WorkPac relies on s 4 of the Administration Act, which defines “ordinary hours of work” variably as follows:

ordinary hours of work of an eligible employee means:

(a)     if an industrial instrument that covers the employee specifies, or provides for the determination of, the ordinary hours of work of the employee—those hours; or

(b)     otherwise—the hours agreed by the employee and his or her employer as the employee’s ordinary hours of work;

regardless of the number of hours actually worked by the employee.

65 The absence of a general definition in the Scheme suggests that the concept of “ordinary hours of work” is mercurial. It has no fixed content, but rather alters according to its context.

66 This accords with the term “ordinary hours” as it is employed in industrial instruments, which does not have a single, objective meaning. The meaning depends on the context in which it has been used: Target Australia Pty Ltd v Shop, Distributive and Allied Employees’ Association (2023) 324 IR 304 at [10]-[11] (Bromberg J). Ambiguity may arise where the employee regularly works additional regular hours (i.e., beyond that prescribed by the industrial instrument or contract), in which case those hours may be referred to as the usual or ordinary hours of the employee: Target Australia at [13].

67 WorkPac submits that the definition in s 4 of the Administration Act presents certain constructional choices, all of which lead to the same outcome in the present case, viz., a maximum average of 35 ordinary hours per week. This is because each of the sample employees was covered by either the 2010 or 2020 Award, both of which contained the industrial standard that ordinary hours of work were to be 35 hours per week, averaged over a roster cycle.

68 The phrase “ordinary hours of work” is employed once in the Administration Act at s 39AA(2)(b)(i), in the calculation of the number of hours of long service leave a part-time employee is entitled to accrue per week, where the total number of “ordinary hours of work” of the employee is presented as an alternative to “35 hours” in s 39AA(2)(b)(ii). This suggests that there is no necessary association in the statute between “ordinary hours of work” and “35 hours”.

69 It is also telling that s 39AA(2)(c) of the Administration Act, which pertains to casual employees, makes no reference to “ordinary hours of work”, but rather to the “hours worked” by the employee (again, as an alternative to “35 hours”). I return to this point further below.

70 Nevertheless, WorkPac relies on the 2012 EA, as the industrial instrument to which para (a) of the definition of “ordinary hours of work” in s 4 of the Administration Act refers, which provided that “[o]rdinary hours of work shall mean a maximum of 35 hours per week”. WorkPac submits that this should be read consistently with the 2010 Award so as to contemplate an averaging arrangement. WorkPac submits that this arrangement aligns with cl 14.2 of the 2012 EA, which contemplated Flat Rate employees working varying rosters, and is consistent with averaging arrangements provided for in respect of Base Rate employees. The 2019 EA was in materially the same terms.

71 Accordingly, as WorkPac argues, the concept of “eligible wages” does not include amounts paid for hours of overtime worked in excess of that maximum (of an average of 35 hours of work over a roster period), which allows for consistency in the way that eligible wages are levied for full-time and part-time employees in ss 3B(1) and (2) of the Collection Act.

72 However, the reference to “ordinary hours of work” in s 16(1) of the Fair Work Act is used to identify the relevant rate of pay. It does not import a restriction on the calculation of the levy to a certain number of hours. As the Corporation submits, the rate payable for ordinary hours is used in contradistinction to a rate for overtime hours, defining the meaning of the base rate, rather than imposing a limit on eligible wages to “ordinary hours”.

73 The reference in s 3B of the Collection Act to the base rate of pay “paid” to the employee (cf. “payable” in s 16(1) of the Fair Work Act), reinforces a construction whereby the rate is paid for hours worked (being the hours for which the employee is rostered, as outlined at paragraph [88] below).

74 As the Corporation submits, this interpretation can be applied consistently across subs 3B(1) and (2) of the Collection Act, in relation to employees who are not casual employees:

3B Meaning of eligible wages

(1)    If an eligible employee is paid a base rate of pay and is not a casual employee, the employee’s eligible wages are the greater of:

(a)    the base rate of pay paid to the employee, including incentive‑based payments and bonuses; and

(b)    75% of the base rate of pay paid to the employee, including:

(i)    incentive‑based payments and bonuses; and

(ii)    overtime or penalty rates; and

(iii)    allowances (other than those for reimbursement of expenses).

(2)    If an eligible employee is paid an annual salary, the employee’s eligible wages are the annual salary paid to the employee, including incentive‑based payments and bonuses but excluding:

(a)    overtime or penalty rates; and

(b)    shift‑loadings.

…

75 Section 3B(1) calls for a comparison in determining whether eligible wages calculated per para (a) or (b) are greater. Such a comparison requires the integer (i.e., hours worked referable to the base rate of pay) to be applied consistently, albeit in different circumstances of employment. As s 3B(1)(b) expressly includes overtime and penalty rates, it contemplates hours worked that are not “ordinary”. This corresponds with the express exclusion of such rates in s 3B(2)(a) in relation to eligible employees who are paid an annual salary.

76 This interpretation also maintains consistency between the meaning of “base rate of pay” in s 16 of the Fair Work Act (which excludes certain amounts) and the meaning of “eligible wages” by reference to the base rate of pay in s 3B(3) of the Collection Act (which includes certain amounts otherwise excluded under s 16 of the Fair Work Act). First, s 3B(3) of the Collection Act is not concerned to define the base rate of pay, which is the remit of s 16 of the Fair Work Act. What is included in s 3B(3) of the Collection Act is referable ultimately to the employee’s “eligible wages”. Second, in any event, the reference to “including” in subs 3B(1), (2) and (3) of the Collection Act signifies an addition in circumstances where the “base rate of pay… payable to the employee” in s 16 of the Fair Work Act otherwise excludes the amounts sought to be included in s 3B of the Collection Act. The effect of this is to reinstate incentive-based payments and bonuses as part of an employee’s base rate of pay for the purposes of the Collection Act: Association of Professional Engineers, Scientists and Managers Australia v Bulga Underground Operations Pty Ltd [2019] FCA 1960 at [56].

77 The terminology “but not including” in s 16(1) of the Fair Work Act suggests that the separately identifiable amounts in paras (a) to (e) (Bulga at [74]) might otherwise be included. The wording is superfluous if the reference to the rate payable for the employee’s “ordinary hours of work” could not include such rates, payments and amounts. It follows that the concept of “ordinary hours of work”, as it is used in s 16(1), contemplates, e.g., overtime or penalty rates. They are not antithetical.

78 That analysis reinforces the view that what is “ordinary” is referable to the employee (and the nature of his/her work), and not the workplace. The reference to “his or her ordinary hours of work” in the definition of the “base rate of pay” in s 16(1) of the Fair Work Act is to be construed as a reference to the ordinary hours of work of the employee in question (as distinct from the ordinary hours of the workplace). As such, the hours (to be) worked by the casual employee are counted (i.e., leviable), even if the employee is paid at an overtime rate for those hours. While there is usually a synergy between the rate payable and the hour worked, the rate does not necessarily dictate the complexion of the hour. In this case, the payment of an overtime rate does not make the hours worked by the casual employee non-ordinary for the employee. The overtime rate is referable to what is standard for the workplace. As such, the hours for which an overtime rate is paid to the sample employees is included, albeit at the base rate of pay.

4.3 Is there a cap on hours?

79 Inherent in WorkPac’s argument is the acceptance that the method of calculation of the levy is based on the hours actually worked by the casual employee if less than 35 hours. This is to be inferred from the argument that: (a) the 2010 and 2020 Awards, which covered the sample employees, promulgated the “industrial standard” of ordinary hours of work as 35 hours per week, averaged over a roster cycle; (b) the 2012 EA provided that “[o]rdinary hours of work shall mean a maximum of 35 hours per week” (averaged over a roster cycle) (cll 1.6; 14.2; 15.2.1)); and (c) the 2019 EA was in “materially the same terms”, and so applied the standard in the 2010 and 2020 Awards.

80 I do not accept that the hours of work by which the base rate of pay “paid” (in s 3B(3) of the Collection Act) is multiplied for the purposes of calculating the levy, are capped at 35 hours.

81 First, as explained above, the cross-reference to “ordinary hours of work” in the general meaning of “base rate of pay” in s 16 of the Fair Work Act serves the purpose of identifying the base rate of pay, rather than qualifying the hours by which the rate is multiplied.

82 Second, casual employees may not have a regular pattern of hours, or advance notice of the work they are to perform. This lends itself to variability, and therefore flexibility, in the hours they agree to perform (e.g., “Daily Working Hours” in the Third to Ninth NOCEs, “Working Hours” in the Tenth NOCE).

83 This potential irregularity is reflected in the note to s 116 of the Fair Work Act regarding absence on public holidays, which highlights that an employee may not have ordinary hours of work, such as a casual employee who is not rostered on for the public holiday, and is therefore not entitled to payment under the section. While the note did not form part of the Act at the relevant time (s 13(3) Acts Interpretation Act 1901 (Cth) as at 25 June 2009; s 40A Fair Work Act), it may be used as a secondary constructional aid, in conjunction with other provisions of the Act.

84 That an employee may not have ordinary hours of work is underscored by the fact that entitlements that accrue by reference to ordinary hours of work (such as paid annual leave and paid personal/carer’s leave) are not available to casual employees: see ss 86 and 95 of the Fair Work Act.

85 It is also reflected in s 39AA(2) of the Administration Act, which draws a distinction between “ordinary hours of work” for part-time employees in s 39AA(2)(b) (which may exceed 35 hours per week), and “hours worked” in relation to casual employees.

39AA Amount of long service leave

(1)    The number of hours of long service leave that an eligible employee is entitled to for a week of qualifying service completed by the employee is worked out using the formula in subsection (2).

(2)    The formula is:

where:

working hours means:

(a)     if the employee is a full-time employee at all times during the week—35 hours; or

(b)     if the employee is a part-time employee at any time during the week—the lesser of the following amounts (or either of them if they are equal):

(i)     the total number of ordinary hours of work of the employee as a part-time employee for the week;

(ii)     35 hours; or

(c)     if the employee is a casual employee at any time during the week and paragraph (b) does not apply—the lesser of the following amounts (or either of them if they are equal):

(i)     the total number of hours worked by the employee as a casual employee during the week;

(ii)     35 hours.

86 Third, the industry awards, EAs and employment contracts do not support a general cap of 35 hours on the statutory concept of “ordinary hours of work” for the sample employees.

(1) The sample employees are not necessarily limited to the average 35 hours per week prescribed under the 2010 and 2020 Awards for ordinary hours of work in relation to “staff” classifications: cl 10 of the 2010 Award; cl 8 of the 2020 Award.

(2) The sample employee may be covered by another Award considered “most appropriate” to the work performed by the employee and the environment in which the employee normally performs the work (cl 4.8 of the 2010 Award; cl 4.6 of the 2020 Award, e.g., the Manufacturing and Associated Industries and Occupations Award 2020), which does not prescribe an average of 35 hours per week for ordinary hours of work: see Bis Industries Ltd v Construction, Forestry, Maritime, Mining and Energy Union [2021] FCA 1374 at [317].

(3) Under some WorkPac contracts, e.g., the First and Second NOCEs, “ordinary hours” are expressly set at 38 hours.

(4) The 2012 EA required casual Flat Rate employees to work longer than 35 hours within the standard work week, in accordance with a roster to meet business operational needs, with no separate provision (or rate) for overtime (see cl 14). Clause 14.2 requires Flat Rate employees to work reasonable additional hours within a “standard work week” as prescribed in certain schedules averaged over the particular work cycle being worked, which schedules start with a 45-hour work week. A similar conclusion may be drawn in respect of the operation of cl 14 of the 2019 EA, by reference to the payment schedules for Flat Rate employees.

87 This does not mean that the number of rostered hours for a casual employee cannot be limited by agreement. However, it is not a limitation born of a necessary correlation between payment and accrual of the levy.

88 At times, the Corporation drew a distinction between hours worked by the employee and the rostered hours worked by the employee. It is not a necessary distinction, but one that may arise in practice. As the Corporation submits, a casual employee’s “ordinary hours” will be those for which they are rostered: see e.g., subs 106BA(1)(b) and (3) of the Fair Work Act, which underscores that the casual employee’s entitlement to pay is referable to the hours for which the employee is rostered to work. As such, in calculating the levy, the rostered hours of work – i.e., the hours of work in respect of which an entitlement to pay arises – are multiplied by a base rate pay, excluding any overtime loading.

5. BASE RATE OF PAY

89 In order to identify the “base rate of pay” in s 16(1) of the Fair Work Act, it is necessary to identify the express exclusions (aside from incentives-based payments and bonuses, which are reinstated in s 3B(3) of the Collection Act), which comprise loadings, monetary allowances, overtime or penalty rates and “any other separately identifiable amounts”.

90 Describing an entitlement as a penalty rate, loading or allowance in a contract does not render it so: Maughan Thiem Auto Sales Pty Ltd v Cooper (2014) 222 FCR 1 at [24] (Katzmann J, with whom Greenwood and Besanko JJ agreed).

91 In Maughan, the Court was tasked with determining a base rate of pay for the purposes of s 16(1) of the Fair Work Act in the context of a redundancy payment. The respondent was paid a weekly salary, which was inclusive of an 18% penalty rate for permanent afternoon shift work: Maughan at [17]-[18]. Justice Katzmann found the penalty to be separately identifiable, noting that “[t]he position would doubtless be different if the contract had been silent as to a shift allowance or had simply stated that the remuneration was inclusive of any or all penalties or allowances”: Maughan at [24].

92 In Bulga, the relevant contract and Enterprise Agreement identified a “Notional Base Salary” (NBS) which was 80% of the employee’s “Total Employment Compensation” (TEC) (less superannuation). The TEC was described as being paid “in lieu of all entitlements, Award, Agreement, over award or legislative [sic]”: [13]. In some cases, the employee, Mr Mayhew was paid a shift or roster allowance in addition to the TEC, and both parties agreed that these amounts were not elements of the base rate of pay: [83].

93 The analysis in Bulga is instructive. Justice Wigney identified the NBS as a contractual construct, and determined that the 20% difference between the NBS and the TEC was not separately identifiable for the purposes of the definition of the base rate of pay (at [77]-[78]). His Honour held (at [78], with emphasis added):

The payments and amounts which s 16(1) of the Fair Work Act excludes from the determination of an employee’s base rate of pay are actual identifiable amounts which are paid or payable to an employee and which are separate from, or payable in addition to, the rate of pay payable to the employee for his or her ordinary hours of work. They are not notional amounts or contractual constructs. Nothing in the Agreement or Contract suggests that Mr Mayhew was ever paid or entitled to be paid a separately identifiable amount comprising 20% of his salary or Total Employment Compensation. Rather, the proper construction of the Agreement and Contract was that Mr Mayhew was to be paid a total or single amount to fully compensate him for fulfilling all of the requirements of his position.… The “Notional Base Salary” as defined in the Agreement and Contract was a construct to be used to compute payments on termination of employment. It was not reflective of the actual payments made to Mr Mayhew for the ordinary hours of his work.

94 His Honour noted that the description of the NBS as the base rate did not determine its character, at [80]:

There is also no basis for Bulga’s contention that the Agreement “prescribes” the Notional Base Salary as the base rate of pay for the purposes of the Long Service Leave Act. It may be accepted that the interpretation of an enterprise “turns upon the language of the particular agreement, understood in the light of its industrial context and purpose”: Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 at [2] (per Gleeson CJ and McHugh J). Even so, neither the Agreement nor the Contract can properly be construed as providing that Mr Mayhew was to be paid the Notional Base Salary for his ordinary hours of work, and then entitled to receive, in certain circumstances, an additional separately identifiable amount, or additional separately identifiable amounts, for or representing loadings, monetary allowances, overtime or penalty rates, or any other form of additional compensation or allowance. There were no circumstances, under the terms of the Agreement and Contract, in which Mr Mayhew could be paid only the Notional Base Salary.

95 His Honour distinguished the contract before him from that in Maughan, and concluded that the entirety of the TEC was, in fact, the base rate, at [90]:

The circumstances in Maughan are also distinguishable from Mr Mayhew’s case. In Maughan, it was clear that, if the employee was not required to work the longer afternoon shift, he would not have received the 18% penalty rate. In Mr Mayhew’s case, he was entitled, under the terms of the Contract and Agreement, to receive the Total Employment Compensation notwithstanding the hours he worked, or the shifts he was required to work on, or the circumstances in which he was required to perform his work. There was no circumstance in which he would only receive the Notional Base Salary or only 80% of the Total Employment Compensation.

5.1 Identifying the base rate of pay in the NOCEs

96 It is to be remembered that the sample employees were engaged as Flat Rate employees during the Claim Period. As noted above at paragraph [51], WorkPac submits that the flat rate of pay identified in each NOCE can be disaggregated, and its constituent components identified by reference to the EAs.

97 The methodology of disaggregation is not straightforward. The premise of this methodology is that the sample employee’s “base rate of pay” for the purposes of calculating the levy is derived from the figure prescribed for an equivalent Base Rate employee under the EAs. WorkPac points to correlations between the NOCEs and the applicable EAs to suggest that the Flat Rates in the NOCEs were derived from the Flat Rates in the EAs, which in turn were derived from the base rates contained therein, thereby demonstrating an “objective regard” to the base rates that applied in Sch 2 of each EA.

98 It is not evident why a base rate for a Flat Rate employee for the purposes of s 16(1) of the Fair Work Act should be ascertained from the rate of pay assigned to a separate category of employee (the Base Rate employee). If the argument is one of (desired) consistency, that (imperative) has not been demonstrated.

99 In support of this proposition, WorkPac relies on Secretary, Attorney-General’s Department v Warren (2022) 292 FCR 498, which concerned the calculation of an employee’s unpaid employee entitlements (namely, annual leave and redundancy pay) pursuant to s 14 of the Fair Entitlements Guarantee Act 2012 (Cth) (the FEG Act): Warren at [1], [7], [11]. Relevantly, s 19(2) of the FEG Act operated such that the amount payable to the employee for a particular employment entitlement was to be reduced by the total amount “attributable to the entitlement” that had been paid to the employee: Warren at [17]-[18]. The employee’s letter of employment provided that he was to be paid an all-inclusive flat rate for all hours worked, which included a 25% casual loading (and further loading to compensate for other loadings, penalty rates and allowances): Warren at [3].

100 The central question before the Court in Warren was, in working out the advance to which the employee was entitled, whether any part of the loadings paid to the employee was to be taken into account in reducing the advance, on the basis that it was “attributable” to the annual leave or redundancy pay entitlements: Warren at [18]. WorkPac drew the Court’s attention to the letter of employment (which made reference to the employee’s “base rate” of pay and included a “25% casual loading” (Warren at [3]), and emphasised that this was construed by the Court to be a reference to the “base hourly rate as provided in the Award” (and the relevant award being the 2010 Award): Warren at [5]. WorkPac contends that the same approach should be followed in this case.

101 However, Warren is not instructive in this respect. That case construed the contract of employment in light of the 2010 Award, which sets out minimum rates of pay. This case requires the NOCEs to be construed in light of the 2012 and 2019 EAs which, unlike the 2010 Award, establish a remuneration model with two separate categories of employees (i.e., Flat Rate and Base Rate employees). It is here that the difficulty with WorkPac’s argument arises.

102 It does not appear to be in contest that the calculation of an employee’s base rate of pay ought to be based on the methodology provided by contractual remuneration provisions to the extent that they are not inconsistent with the relevant EA. However, while WorkPac may have derived the contractual flat rate from the 2012 EA, it does not follow that the flat rate is to be disaggregated by reference to (the payment structure for a Base Rate employee as provided for in) the 2012 EA. WorkPac relies on an inference drawn from the fact that in each of the Third to Tenth NOCEs, the flat rate less any “Flexible Reward Scheme” or “Performance Incentive Bonus” either “matched”, or in one case “corresponded closely” to, a minimum flat rate prescribed in the relevant Schedule of the EA that applied at the time.

103 Two aspects of this argument undermine a conclusion of the incorporation of the EA: (i) a partial comparison with the NOCEs; and (ii) the absence of complete correspondence between the contractual and EA rates. For example, in the Sixth NOCE, the difference between the flat rate of pay and the “Flexible Reward Scheme”, on the one hand, and one of the minimum flat rates payable under one of the Schedules to the 2012 EA, on the other, was one cent. WorkPac relies on similitude, but that cannot be assumed to affirm the asserted comparison; it may deny it. WorkPac does not explain the disparity.

5.1.1 First NOCE

104 The First NOCE applied to Employee A, who was a Flat Rate employee and Mineworker Level 3 under the 2012 EA (listed in Sch 1). Employee A was entitled to a flat rate of pay of $50 per hour. Under the 2012 EA, a Base Rate employee in the same classification was entitled to a minimum hourly payment of $21.85 and a casual loading of $5.46.

105 The First NOCE described the flat rate as follows:

Your flat rate of pay includes the payment of overtime, weekend penalties, public holiday loadings, shift penalties, casual loading (refer to Schedule 2 for more information on your casual loading) and any industry and special allowances that may apply.

Your flat rate may also include one or more of the following allowances or penalties; crib, meal breaks or special allowances including site allowances if not specified below.

106 Schedule 2 to the First NOCE specifies that:

Your ordinary rate of pay is your hourly rate less your performance incentive bonus where applicable. Refer to the appropriate Agreement contained in Schedule 1 to determine your casual loading.

107 WorkPac submits that, bearing in mind cl 9.1.1 of the 2012 EA, which prescribes the base rate and flat rate of pay for Base Rate and Flat Rate employees, respectively, the entitlements comprising the flat rate in the First NOCE must be those entitlements that are payable to an equivalent Base Rate employee in addition to their minimum rate of pay. Therefore, any entitlements in excess of the minimum sum payable to an equivalent Base Rate employee are not leviable by virtue of the exclusions in s 16(1) of the Fair Work Act.

108 I agree with the Corporation that the flat rate of pay as described in the First NOCE is akin to a payment “inclusive of any or all penalties or allowances” (per Katzmann J in Maughan at [24]), and that the entitlements described as constituting the flat rate were not separately identifiable for the purposes of s 16(1) of the Fair Work Act.

109 The all-inclusive payment compensates the employee for the entitlements that are listed in the clause, including amounts “that may apply”, and which “may also include” certain (and uncertain) allowances.

5.1.2 Second to Ninth NOCEs

110 The same analysis applies to the Second to Ninth NOCEs, which are in relevantly similar terms to the First NOCE. Indefinite or variable inclusions (signified by the use of “may include”,  “may apply” or “may have”) do not support an argument that the flat rate can be disaggregated into “separately identifiable” amounts.

111 The Corporation attributed significance to the description of the “flat rate” in the Third and Fifth NOCEs as the “base rate of pay”. I did not. As WorkPac contends, the reference to “base rate” in the NOCEs is not determinative of the character of the payment made to the employee. As indicated above, describing an entitlement as one thing does not make it so: Maughan at [24].

5.1.3 Tenth NOCE

112 WorkPac relies on the Tenth NOCE as specifying “in the clearest terms” what the parties objectively intended as the employee’s “base rate of pay” for the purposes of the Scheme:

Your flat rate of pay per hour is an aggregate rate made up of the following components:

113 The Tenth NOCE includes specific dollar amounts for the “base rate of pay”, “casual loading”, and an “All Purpose Loading”, which is described as:

an amount incorporated into the Flat Rate which compensates you for all loadings and penalty rates which are or might be applicable to your employment including but not limited to, any overtime, loadings (including public holiday loadings), penalty rates, allowances, shift penalties and any other entitlement that you may have under: the Fair Work Act 2009 (Cth) (and its successors) and/or any other State or Federal legislation or subordinate law, and the Relevant Industrial Instrument (together “the industrial laws”).

114 The first two sums in the table at paragraph [112] above match the minimum base rate and the casual loading for a Base Rate employee in Sch 2 of the 2019 EA. The first three sums match the minimum rate for a Flat Rate employee (working a “35-45 Hour Week”, “Afternoon & Night”, “Mon-Sun” roster). WorkPac submits that the Tenth NOCE identifies Employee F’s base rate of pay for the purposes of calculating the levy, noting that the “Flexible Reward Scheme” (described as payment in addition to the rates of pay prescribed by the relevant industrial instrument) would also be leviable.

115 I agree with the Corporation that the “All Purpose Loading” is a contractual construct in that it comprises any and all entitlements (other than a casual loading) such that it is not possible to identify any separate components of the payment. It is not suggested by WorkPac that the relevant (Flat Rate) employee would be paid the so-called “base rate of pay” (which matches the minimum rate of pay for a Base Rate employee). In relation to the Tenth NOCE, the
“base rate of pay” for the purposes of calculating the levy is identified by subtracting any separately identifiable amounts from the flat rate.

5.2 Whether to deduct the casual loading?

5.2.1 First to Sixth NOCEs

116 The Corporation contends that the First to Sixth NOCEs describe the flat rate as an all-inclusive amount to compensate the employee for all matters listed in the clause, including matters that “may apply”: cf. Bulga at [78]. The Corporation accepts that the Seventh to Tenth NOCEs differ with reference to the casual loading.

117 WorkPac’s primary submission is that the base rate is identified by reference to a figure in which the casual loading is disaggregated. In the alternative, WorkPac submits that an employee’s base rate is the flat rate in the NOCE less the casual loading applicable to an equivalent Base Rate employee in the applicable EA. WorkPac makes the same argument in relation to the Seventh to Tenth NOCEs.

118 WorkPac argues that the casual loading that applied to the rates prescribed for Base Rate employees was absorbed into the flat rates of pay applicable under the EAs. This is on the basis that:

(a) the definite article in cl 6.4.5(b) of the 2012 EA – “the casual loading” – refers to the casual loading of 25% for Base Rate employees in cl 6.4.5(a); and

(b) this is made clear by the subsequent clarification in cl 6.4.6 of the 2019 EA, which provides that “the casual loading of 25% on the base rate of pay for the applicable classification is incorporated into the flat rate of pay”.

119 WorkPac argues that it is not surprising that the First to Sixth NOCEs did not identify the base amount by which 25% was to be multiplied, as it “went without saying” that it was the applicable base rate set by Sch 2 of the 2012 EA, and that the Seventh NOCE expressly referred to the “corresponding base rate of pay” in the 2012 EA as setting the casual loading incorporated in the contractual flat rate. However, this argument is in the nature of an assumption. The inference sought to be drawn from the express provision in the Seventh NOCE is equally consistent with the proposition that it was necessary to expressly refer to the base rate of pay in the 2012 EA.

120 The Corporation’s primary submission is that the casual loading is not separately identifiable. This is said to be the case even where a casual loading rate is identified as 25% of the base rate (as in the Seventh to Tenth NOCEs) or as a dollar amount (as in the Eighth to Tenth NOCEs). This is because a base rate cannot be identified, and it is therefore impossible to apply the rate and ascertain a casual loading figure. This submission, as it applies to the Seventh to Tenth NOCEs, is considered separately below.

121 The crux of the Corporation’s argument is that if an amount is referable to something that is not separately identifiable (here, the base rate of pay by which the casual loading is to be multiplied), then the amount is not separately identifiable (in the context of the payment structure adopted by WorkPac, which bundles entitlements together).

122 However, the fact that the amount is not presently able to be calculated does not mean that it is not an amount that is identified or identifiable separately. The base rate of pay is not (separately) identifiable where it is not evident what the base rate comprises.

123 In that regard, I accept that, in circumstances where the casual loading cannot be calculated (as the base amount by which 25% is to be multiplied is not identifiable), and there is no other identification of the dollar value of the casual loading amount, it cannot be said to be a separately identifiable amount for the purposes of s 16(1) of the Fair Work Act.

5.2.2 Seventh NOCE

124 WorkPac submits that the reference in the Seventh NOCE to the “corresponding base rate of pay” is a reference to the rate payable to a casual Base Rate employee of the same classification under the 2012 EA.

125 While the Corporation accepts that the Seventh NOCE stands in a different category from the preceding NOCEs, in that it expressly provides that the flat rate “incorporates a casual loading of 25% of the corresponding base rate of pay for your classification, in accordance with the Enterprise Agreement and/or Industrial Instrument”, and thereby identifies a way in which to calculate a casual loading amount, the Corporation does not accept that the reference is to the “Base Rate” employees in Sch 2 of the 2012 EA, as opposed to a figure in Schs 3 to 7 of the EA that pertains to Flat Rate employees.

126 The Corporation submits that in relation to the Seventh to Ninth NOCEs, the reference in the contract to 25% of the base rate does not reflect any identifiable amount that is separate from, or payable in addition to, the rate of pay for the employee’s ordinary hours of work. On that basis, the Corporation argues that it is a notional amount or contractual construct. The Corporation makes the same argument in relation to the other NOCEs.

127 Presumably, the Corporation seeks to impose an additional limitation on the identification of “separately identifiable amounts” in s 16(1) of the Fair Work Act, being amounts that are payable in relation to the employee’s ordinary hours of work. As the analysis above demonstrates, that is not an effective or useful limitation in relation to casual employees for whom ordinary hours of work equate simply to (rostered) hours of work. On the Corporation’s argument, there can be no “additional amount” for Flat Rate employees whose flat rate of pay is all-encompassing. That presents an insuperable difficulty in calculating the levy for casual employees in s 3B(3) of the Collection Act, as it must, by reference to a base rate of pay.

128 The Corporation’s second alternative argument is that the base rate is constituted by the flat rate in the NOCE less the casual loading figure in the EAs for an equivalent Base Rate employee. I accept that “the casual loading” referred to in cl 6.4.5(b) of the 2012 EA and cl 6.4.6(b) of the 2019 EA refers to, as clarified (“i.e.”) in the latter EA, the casual loading of 25% on the base rate of pay for the applicable classification, which is incorporated into the flat rate of pay.

129 I also accept that whilst the Seventh NOCE provides a methodology to calculate the casual loading amount, it remains the case, as with the First to Sixth NOCEs, that the “corresponding base rate of pay” by which 25% is to be multiplied, is not identifiable. Consequently, the casual loading amount is not separately identifiable for the purposes of s 16 of the Fair Work Act.

5.2.3 Eighth to Tenth NOCEs

130 The Eighth and Ninth NOCEs specify that the “flat rate of pay includes a casual loading of 25% of the base rate of pay set out in the Relevant Enterprise Agreement and is incorporated into your flat rate of pay”. Importantly, they specify the “value of this loading” as a dollar figure. The Tenth NOCE, as set out at paragraphs [112]-[113] above, similarly provides a dollar figure for casual loading, which is stated to be “25% of your base rate of pay”.

131 This differs from the previous NOCEs, which did not specify a dollar figure.

132 The Corporation contends that, as is the case for the previous NOCEs, the casual loading is not separately identifiable, and further, that the prescribed casual loading figure is a contractual construct. These arguments are set out at paragraphs [120]-[121] and [125]-[126] above.

133 WorkPac contends that, as is the case for the other NOCEs, an employee’s base rate is the flat rate in the NOCE less the casual loading applicable to an equivalent Base Rate employee in the applicable EA. In relation to the Eighth to Tenth NOCEs, WorkPac submits that this sum is the same as the casual loading figure stipulated in the NOCE.

134 The Corporation’s first alternative argument is that only the prescribed casual loading figure in the Eighth to Tenth NOCEs should be deducted from the flat rate.

135 In circumstances where the casual loading figure is specifically identified as a dollar amount, it is identifiable for the purposes of s 16 of the Fair Work Act, even if (as the Corporation contends) it is not separately calculable (as the base amount by which 25% is to be multiplied is not “identifiable”). It is to be remembered that the reference to the “base rate of pay” in the NOCE is not to be assumed to correspond to the statutory concept. WorkPac accepted that the sample employees (as casual employees) were entitled to receive the casual loading. In that regard, they are not to be seen as “contractual constructs” in the sense described in Bulga (at [78], [89]-[90]).

5.3 Leviable bonuses

136 Question 1(c) poses a question that is ultimately answered by the concession of the parties, and is, in essence, an agreed fact.

137 It is accepted by the parties, and reflected in the Statement of Agreed Facts, that the sample employees the subject of the Third to Eighth and Tenth NOCEs received “incentive-based payments and bonuses”, either by way of a so-called “Performance Incentive Bonus” or “Flexible Reward Scheme” payment.

138 What follows is that those identifiable amounts insofar as they qualify as “incentive-based payments” or “bonuses” should be excluded from the identification of the base rate of pay in s 16(1) of the Fair Work Act, but ultimately reinstated in the identification of “eligible wages” in s 3B(3) of the Collection Act, for the purposes of calculating the levy as per ss 4 and 5 of the Levy Act.

6. ANSWERS TO SEPARATE QUESTIONS

139 The remaining Separate Questions are answered as follows:

(1) For each of the 10 sample employees of the applicant listed in Schedule A, and during the period that their employment was subject to the relevant Sample NOCE, their “eligible wages” were to be calculated for a reporting period, as follows:

(a) Each employee’s “base rate of pay” was the “flat rate” of pay specified in the relevant Sample NOCE less:

(i) for the employees whose employment was subject to the Eighth to Tenth NOCEs, the casual loading as specified in those NOCEs;

(b) Each employee’s “base rate of pay” (as identified in answer to 1(a)(i) above) should have been multiplied by the hours worked by the employee in his or her employment, insofar as they corresponded with the rostered hours worked by the employee.

140 Noting the parties’ objective in posing the Separate Questions, as indicated at paragraph [6] above, it is appropriate that the parties confer with a view to agreeing on the orders to be made, including as to the disposition of the proceeding, and costs, in light of the Court’s answers to the Separate Questions. Orders will be made accordingly.

Associate:

Dated:    8 July 2026