Federal Court of Australia

Qube Ports Pty Ltd v Construction, Forestry and Maritime Employees Union [2026] FCA 978

ORDERS

THE COURT ORDERS THAT:

1.    The appeal is dismissed.

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

REASONS FOR JUDGMENT

COLVIN J:

1    Mr Wayne Gordon worked for Qube Ports Pty Ltd at Dampier Port. By 2021, he was working as a 'Guaranteed Wage Employee'. From 1 November 2021, he worked as a 'Variable Salary Employee'. Although described as a 'Salary' position, it was remunerated on the basis of a guaranteed minimum payment each fortnight adjusted to reflect actual hours worked. This was akin to the arrangements for a Guaranteed Wage Employee. An employee of either status was entitled to payment for hours actually worked above 1820 hours per year at a specified 'overtime' rate.

2    From 24 January 2022, Mr Gordon became a 'Provisional Full Time Salaried Employee'. As such, he was entitled to be paid a fortnightly salary based upon a working week of 35 hours (1820 hours per annum) plus 'overtime'. In the case of a Provisional Full Time Salaried Employee, the 1820 hours were to be calculated on the basis that annual leave and certain other types of leave were to be counted. This was not the case for Guaranteed Wage Employees or Variable Salary Employees.

3    An issue arose as to the way in which Mr Gordon's overtime entitlements were to be calculated for the year commencing 1 July 2021 having regard to the different categories of employment that he undertook for Qube in that financial year.

Proceedings before the industrial magistrate

4    The Construction, Forestry and Maritime Employees Union commenced proceedings against Qube in the Industrial Magistrates Court in Western Australia alleging that Qube had failed to comply with the Qube Ports Pty Ltd Port of Dampier Enterprise Agreement 2020 (Enterprise Agreement). The Union alleged that Mr Gordon was entitled to be paid overtime when he reached 1820 hours in the year. It claimed that, for part of the year commencing 1 July 2021, Mr Gordon had not been paid overtime to which he was entitled. The Union sought compensation, interest and a civil penalty all to be paid to Mr Gordon. Qube denied the Union's claim.

5    The learned industrial magistrate upheld the Union's claim: Construction, Forestry and Maritime Employees Union v Qube Ports Pty Ltd [2024] WAIRC 01031. In doing so, her Honour differentiated between (a) 'Salaried Employees' (a term that was applied to Provisional Full Time Salaried Employees (or PFSEs)); and (b) 'Non-Salaried Employees', (a term that was applied to Guaranteed Wage Employees (or GWEs) as well as Variable Salary Employees (or VSEs)), noting that the Enterprise Agreement provided for both categories to be paid an 'overtime rate' after 1820 hours. The overtime rate was the hourly rate to be paid to a category of employee described as 'Supplementary Employees' in the Enterprise Agreement, being a composite rate that compensated for the casual nature of their engagement, referred to by the magistrate as the SE rate or SE hourly rate. I will adopt the same terminology.

6    The magistrate observed that there was a difference between the way Salaried Employees and Non-Salaried Employees qualified for overtime at the SE hourly rate, stating at [52]:

There is a difference between the payment of overtime as it relates to Salaried and Non-Salaried Employees…:

•    the 1820 hours for Salaried Employees comprise work undertaken, paid leave, training, public holidays and any other paid arrangement (that is; Worked Hours);

•    the 1820 hours for Non-Salaried Employees comprises work only.

7    Ultimately, the magistrate found that the preferred construction of the Enterprise Agreement was to the effect that 'Salaried and Non-Salaried Employees become entitled to overtime paid at the SE hourly rate at the time when they achieve or work the total of 1820 hours in a Year regardless of the category of employment during the Year'. On that basis, the magistrate concluded that liability on the part of Qube had been established. In reaching that conclusion, the magistrate described Mr Gordon as being in a position where he had been paid his salary during the disputed period 'just not at the SE rate': at [59].

8    A further hearing then took place as to quantum and any penalty.

9    It is tolerably clear that, at the time of the magistrate's decision on liability, the magistrate understood that the nature of the claim being made by the Union was that Mr Gordon should have been paid at the higher SE rate once he had worked 1820 hours in the year that commenced 1 July 2021 and that, instead, he had been paid his lower salary rate (at least for much of the period after he had worked 1820 hours in the year): at [47]-[51]. Her Honour's decision was to the effect that the hours worked in a year as a Non-Salaried Employee could be added to the 'Worked Hours' as a Salaried Employee for the purposes of determining whether the employee was entitled to payment for overtime at the SE rate as a Salaried Employee.

10    At the further hearing as to quantum and penalty, there was a focus upon the precise terms of the Enterprise Agreement concerning the amounts to be paid to employees, particularly the terms of cl 6 of Part B of the Enterprise Agreement which provided:

FSEs and PFSEs [described by the magistrate as Salaried Employees] are entitled to overtime paid at the Supplementary Employees hourly rate when they have achieved 1820 Worked Hours in a Year.

VSEs, PVSEs and GWEs [described by the magistrate as Non-Salaried Employees] who work more than 1820 hours in a Year will be entitled to be paid overtime at the Supplementary Employees hourly rate.

11    As has been indicated, the Enterprise Agreement defined the term 'Worked Hours' to include 'any period of paid leave, training, public holidays and any other paid arrangement contained in this Agreement'. Consequently, as was observed by the magistrate, in determining whether a Salaried Employee was entitled to overtime, periods of leave were to be counted as part of the 1820 hours required to qualify for overtime at the SE rate. However, in the case of Non-Salaried Employees, only hours that were worked were to be counted for the purpose of determining whether the employee qualified for overtime at the SE rate.

12    Also of significance was the way that Salaried Employees were paid. They were paid in equal fortnightly amounts over the year. The total salary amount paid in that way was for 1820 Worked Hours. There were provisions to the effect that Salaried Employees had an 'AAH requirement of 1820 hours, inclusive of all forms of approved leave'. The term AAH was defined to mean 'Annualised Accumulated Hours'. The 'achievement of AAH' was to be monitored monthly. There were provisions to 'avert' any shortfall in AAH and provisions concerning rollover of any shortfall that did occur. In short, Salaried Employees were paid fortnightly amounts in the expectation that their 'Worked Hours' would be at least 1820 hours in any year and, over the year, the fortnightly payments totalled what might otherwise be paid to an employee who was paid for 1820 hours of work.

13    Non-Salaried Employees, on the other hand, were paid for the hours that they actually worked (noting that they were entitled to a minimum payment each week which, for Guaranteed Wage Employees, was for 28 hours, or 80% of the amount they would be paid if they worked 35 hours each week, and for Variable Salary Employees was the higher of a set salary component or a composite hourly rate for each hour worked, with payment allowed for leave).

14    Consequently, at any point during a Year, on a given set of facts, the accumulated hours that would count towards the 1820 hours could be different for a Salaried Employee when compared to a Non-Salaried Employee.

15    More significantly for present purposes, disregarding the differences attributable to the taking of leave, it was quite possible that during the course of a year the payment made to a Salaried Employee would not correspond with the hours actually worked. For example, a Salaried Employee who was required to work what amounted to 40 hours per week on average for the first 12 weeks of the year would only be paid the fortnightly amounts (which would correspond to 35 hours per week on average). In a sense, the Salaried Employee would be underpaid by the end of the 12 weeks, but would know that the provisions of the Enterprise Agreement required, in effect, Worked Hours for salaried employees to total at least 1820 hours for the Year. So, by the end of the year, the Salaried Employee would receive payment for 1820 hours (and also be paid the SE rate for any additional hours). By that mechanism, the additional work undertaken in the first 12 weeks would be fully remunerated by the end of the year. This would be so because the fortnightly payments would cover 1820 hours and any additional hours would be paid as overtime. However, it was also possible for the AAH requirement to be met over the course of a year by requiring the Salaried Employee, after the first 12 weeks, to work less hours per week on average for the balance of the year so that the overall hours for the year were 1820 hours thereby producing a yearly salary (paid fortnightly) that covered all the hours worked.

16    In contrast, a Non-Salaried Employee who worked the same level of additional hours in the first 12 weeks would have been fully paid for all the work. That level of hours would be above the guaranteed minimum payments and, consequently, would be paid at the hourly rate. The same would apply for hours worked after the first 12 weeks that were above the level of hours covered by the guaranteed minimum fortnightly payments of Non-Salaried Employees. That is because any employee working 1820 hours in a year would work well above the hours covered by the guaranteed minimum. So, by the time a Non-Salaried Employee worked 1820 hours in a year, the employee would have been fully paid for all the hours worked. This might occur well before the end of the year.

17    As a result, in the case of the 12-week example, if the Non-Salaried Employee switched to being a Salaried Employee after 12 weeks then, on the construction adopted by the magistrate at the liability hearing, the following would apply for the purposes of determining when overtime payments were to be made. The switching employee could carry across to the new Salary Employee status all the hours worked (and paid for) and would also be paid the fortnightly salary amounts for the balance of the year. The switching employee could retain the hourly rate paid for the 480 hours worked in the first 12 weeks (40 hours per week for 12 weeks) and also receive, for the balance of the year, the benefit of a fortnightly salary calculated, in effect, on the basis that the switching employee had only been paid for 35 hours per week for the first 12 weeks. Just like a continuing Salaried Employee who had worked the 40 hours per week for the first 12 weeks, the switching employee could work less hours per week for the balance of the year (to reach the overall 1820 hours for the year) but still be able to keep the additional payments made for the first 12 weeks. By the end of the year, the switching employee would have worked 1820 hours and been paid the salary for working 1820 hours as well as being able to keep the additional amounts paid for the hours worked above 35 hours in the first 12 weeks (being the pay for 60 hours of work). This would be a form of double-payment whereby the switching employee would be paid in full for the hours when they were worked and also receive additional amounts for the work as part of the fortnightly payments. The switching employee would be paid more than a Salaried Employee to undertake work in the first 12 weeks of the year but both would be paid the same for the balance of the year. So, the switching employee would be paid more for undertaking the same work.

18    Further, both employees would be entitled to overtime for additional hours once they reached 1820 hours as well as their fortnightly salary (being a smoothed payment over the year for the 1820 hours). However, it is not the payment of these additional overtime hours at the SE rate that is the reason why the switching employee is paid more. Both the switching employee and the continuing Salaried Employee are paid the same for those hours. It is the fact that the continuing employee is paid in full for the hours in the first 12 weeks and then receives the fortnightly payment for the balance of the year that causes the switching employee to be paid more than the continuing Salaried Employee for doing the same work.

19    It appears that, in fact, Mr Gordon was paid on a form of pro-rata calculation undertaken by Qube. By that calculation, the required Worked Hours figure of 1820 for the year was used to calculate a pro rata Worked Hours figure for the part of the year for which Mr Gordon was a Salaried Employee and the SE Rate was applied on that basis. In effect, the AAH was adjusted to determine a pro rata figure of Worked Hours for the part of a year when Mr Gordon was a Salaried Employee. On that basis, Mr Gordon's entitlement to payment for overtime was calculated based upon his Hours Worked as a Salaried Employee. Hours worked before he switched were not counted, but his pro rata AAH was lower to reflect that fact that he was a Salaried Employee for only part of the year. Mr Gordon was paid his fortnightly salary plus overtime for Hours Worked above his adjusted AAH. This approach meant that the total of the fortnightly salary payments corresponded to payment for the adjusted AAH for the part of the year that Mr Gordon worked as a Salaried Employee. Consequently, the amount to be paid to Mr Gordon all depended upon the work that he did during the period that Mr Gordon was a Salaried Employee. Any additional hours worked above 35 hours a week before the switch would not be counted in determining overtime entitlements.

20    At the hearing before the magistrate as to quantum and penalty, the focus was upon the nature of the calculation to be made to give effect to the conclusion that had been reached by the magistrate as to the proper construction of the Enterprise Agreement concerning the payment of overtime at the SE Rate. It will be recalled that the conclusion reached by the magistrate was to the effect that, in the case of any employee who switches from being a Non-Salaried Employee to being a Salaried Employee in the course of a Year, the hours worked as a Non- Salaried Employee count for the purposes of determining whether the switching employee has reached 1820 Worked Hours in the Year. The liability judgment did not consider the significance of the possibility of the kind of 'double-dipping' that I have described.

21    In fact, in the year commencing 1 July 2021, Mr Gordon had worked 1,346.5 hours as a Non-Salaried Employee before switching to being a Salaried Employee on 24 January 2022. Accordingly, in round terms, he had been an employee for 57% of the year but had completed 74% of the figure of 1820 hours. Therefore, the potential for double dipping was considerable. Equally, the pro-rata methodology used by Qube to determine Mr Gordon's overtime payment required him to work more hours over the course of a year to qualify for overtime because his excess hours before switching were not counted.

22    In the result, on 15 April 2022, Mr Gordon completed 1820 hours of work in the year. Consequently, if Mr Gordon continued to receive his salary from that date and was also paid the SE Rate for all hours worked after 15 April 2022 then he would be double dipping. In short, by the end of the year he would be paid much more than a Salaried Employee who had undertaken the same number hours of work as Mr Gordon over the course of the whole year. On the other hand if the additional hours above 35 hours a week that he had worked as a Non-Salaried Employee in the beginning of the year were not counted, he would have to work more than 1820 hours in a year to qualify for overtime.

23    Calculations provided to the magistrate by Qube demonstrated the financial extent of the double dipping effect in the case of Mr Gordon. They showed that if Mr Gordon was paid both ongoing fortnightly salary amounts and the SE Rate for all hours worked after 15 April 2022 then he would be entitled to a further $18,750.32 over and above the total amount he had been paid for the year. However, Qube advanced an alternative set of calculations. They limited the period for which Mr Gordon was to be paid the fortnightly salary payments. The alternative calculation resulted in a conclusion that only $2,188.80 was to be paid to Mr Gordon over and above the amounts that he had already received for the year (bearing in mind he had been paid using the pro-rata calculation I have described above). The way the alternative calculation was done is as follows:

(1)    Qube began with the date from which it had commenced paying Mr Gordon his fortnightly salary amount, namely 24 January 2022;

(2)    Qube then calculated Mr Gordon's Worked Hours between 24 January and 15 April 2022 (being the date when he reached the 1820 figure calculated according to the construction of the Enterprise Agreement that had been determined by the magistrate), being 473 hours;

(3)    Qube then determined what were, in effect, the number of hours that had been paid for by the fortnightly salary payments to Mr Gordon between 24 January and 15 April 2022, which it determined to be 410 hours;

(4)    On the basis of the above calculations, Qube concluded that there were 63 hours (473 hours worked less 410 hours paid) that had not been covered by the salary payments made to Mr Gordon between 24 January and 15 April 2022;

(5)    Qube then made a calculation on the basis that the salary payments were only to be continued until those payments covered the 63 hours (which it determined to be until 28 April 2022);

(6)    On the basis that the salary payments had then been made for all the hours actually worked by Mr Gordon as a salaried employee between the date he commenced as a salaried employee (24 January 2022) and the date he reached the figure of 1820 hours (15 April 2022), Qube calculated the amount to be paid thereafter for hours worked on the basis that Mr Gordon was then to be paid the SE Rate (with no ongoing fortnightly salary payments).

24    Significantly, Qube presented the alternative calculation I have just described as one of two possible methods for giving effect to the construction of the Enterprise Agreement that had been found by the magistrate in the liability hearing. It supported its position by an affidavit deposed by Qube's 'National Labour and Systems Manager'. The affidavit included the following:

Having read the liability judgment, particularly at paragraph [56], it is not clear to me whether the Industrial Magistrate was contemplating the First Approach or Second Approach as the correct approach to calculating the Affected Worker's entitlements (and specifically, what account the Industrial Magistrate intended should be made for the base salary the Affected Worker continued to be paid throughout the Disputed Period), and for that reason I have modelled both alternatives.

25    Before the magistrate, Qube advanced the Second Approach (being the alternative calculation I have described) as the preferred method of giving effect to the construction of the Enterprise Agreement that had been determined by the magistrate in her liability decision. The magistrate accepted Qube's position and made orders for Qube to pay Mr Gordon $2,188.80 in respect of his entitlements under the Enterprise Agreement and a penalty of $3,000.

26    As will emerge, Qube now seeks to criticise the magistrate for having chosen Qube's own preferred method. It says that the decision by the magistrate effectively 'switched off' (being a clear entitlement on the part of Mr Gordon to the payment of the fortnightly salary amount for so long as he was a Salaried Employee). It seeks to rely on that aspect of its own proposed method of calculation (as accepted by the magistrate) as the basis for an appeal to this Court.

The nature of Qube's appeal

27    Qube now brings an appeal in this Court against the magistrate's orders. It seeks to invoke the jurisdiction conferred on this Court by s 565(1) of the Fair Work Act 2009 (Cth). In lieu of the magistrate's orders it says that there should be an order dismissing the proceedings before the magistrate.

28    Qube advances a single appeal ground. It is to the effect that the magistrate erred in the conclusion reached as to the proper construction of the relevant provisions of the Enterprise Agreement. Qube claimed that the magistrate ought to have concluded that the hours worked by Mr Gordon as a GWE and VSE (that is as a Non-Salaried employee – using the terminology of the magistrate) did not count for the purposes of determining whether Mr Gordon had achieved 1820 Worked Hours in the year. On that approach, Mr Gordon was not entitled to the payment of any hours at the SE Rate because he did not reach 1820 hours in the time that he worked as a Salaried employee.

29    Qube claims that the appropriate order on appeal is for the orders made by the magistrate to be set aside and for the claim to be dismissed with no order as to costs. Qube does not seek costs on the appeal.

The proper construction of enterprise agreements

30    The principles as to the proper construction of the Enterprise Agreement were not in dispute. They were expressed in the following terms in WorkPac Pty Ltd v Skene [2018] FCAFC 131; (2018) 264 FCR 536 at [197] (Tracey, Bromberg and Rangiah JJ):

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

(Citations omitted).

31    Industrial instruments in general are not always drafted carefully by lawyers or professional drafters, and hence the literal words of a provision might more readily be understood to have a meaning other than their ordinary meaning if the context so suggests: Ridd v James Cook University [2021] HCA 32; (2021) 274 CLR 495 at [17] (Kiefel CJ, Keane, Gageler, Gordon and Edelman JJ) citing City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union [2006] FCA 813 at [57] (French J).

32    The industrial purpose is to be derived from the terms of the instrument (and relevant surrounding matters of context). It is not correct to begin the construction task by positing some form of purpose: Construction, Forestry and Maritime Employees Union v Australian Industry Group [2025] FCAFC 187; (2025) 314 FCR 187 at [53] (Wheelahan, Jackson and Dowling JJ). 'A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award': Kucks v CSR Ltd (1996) 66 IR 182 (Madgwick J), approved and applied in Transport Workers’ Union of Australia v Coles Supermarkets Australia Pty Ltd [2014] FCAFC 148 at [39]-[41] (Siopis, Buchanan and Flick JJ).

33    No party claimed that there were any matters of context outside the terms of the Enterprise Agreement or matters concerning the history of the clause in issue that were relevant to the construction of the industrial instrument. As I will explain, of particular significance in the present case are the principles concerned with the use of the context provided by the terms of the industrial instrument itself and an understanding of what is implicit in the terms of the enterprise agreement in reaching a conclusion as to its proper interpretation.

34    It was submitted for Qube that the magistrate simply chose an outcome that was regarded as 'fairer' in the circumstances. I do not accept that characterisation. The magistrate was seeking to apply the terms of the Enterprise Agreement in a relatively complex set of employment circumstances of a kind that was not addressed expressly by the language of the Enterprise Agreement. The magistrate approached the case as one of construction of the Enterprise Agreement.

35    In order to address the case advanced by Qube on appeal, it is first necessary to refer to the relevant terms of the Enterprise Agreement.

The relevant Enterprise Agreement provisions

36    The Enterprise Agreement has two parts. Part A is a set of general conditions. Part B is a set of conditions for those employees whose primary location was Dampier. I have already explained the relevant categories of employment and the use of the concepts of 'Worked Hours' and 'Annualised Accumulated Hours' or AAH. These terms are defined in Part A.

37    Of some further relevance is the language of the definition of 'Permanent Employee' as defined in Part A. It is as follows:

means: a Full-time Salary Employee (FSE) paid a fixed salary in accordance with clause 9.1 of this Agreement, a Provisional Full-time Salary Employee (PFSE) paid a fixed salary in accordance with clause 9.2. A Variable Salary Employee (VSE) who is irregularly engaged to work and is paid a minimum salary in accordance with clause 9.5 of this Agreement and a Provisional Variable Salary Employee (PVSE) who is irregularly engaged to work and is paid a minimum salary in accordance with clause 9.6 of this Agreement.

38    The term Supplementary Employee is defined as follows:

means an Employee who is a non-permanent casually engaged person to supplement the use of other Employees in accordance with clause 9.8 of this Agreement.

39    Therefore, the categories of employment that are relevant for present purposes are all Permanent Employees whose employment will continue uninterrupted if they move from one category to another. Further, there is a progression towards greater certainty of work that is evident from the descriptions applied to each category of Permanent Employee. These aspects have significance for considering the extent to which entitlements which depend upon accruing hours of work in a year may be expected to be carried forward from one category of employment to the next.

40    The Statement of Intent in Part A of the Enterprise Agreement includes language to the effect that the parties recognise that it is essential to achieve a spirit of trust and cooperation as required by the overall objectives of Qube through the provision of various aspects of employment. One of those is: 'Reasonable career paths and job satisfaction embracing modern and flexible forms of work organisation, consistent with the optimum use of all [Qube's] resources'. No doubt, the ability to engage fulltime employees on the basis that they may have different levels of security as to full-time work assists Qube to optimise its operations.

41    Part A provides for the different categories of engagement for employees: cl 8.1. It includes the following (cl 8.2):

Each new Employee will be advised in writing of the status of employment to which they are appointed and their primary place of work. If employment status changes at any time, a new letter of appointment describing the new status will be issued to the Employee.

42    I note that the language of the above provision does not refer to the change in status as extinguishing entitlements accrued when working in a different employment status.

43    Clause 9.3 of Part A deals with 'Rollover of Hours - FSEs and PFSEs', that is Salaried Employees. It uses the defined term AAH (which is specified as 1820 hours for FSEs and PFSEs, see cl 9.1.1.a and cl 9.2.1.a). Clause 9.3 provides that 'Each yearly AAH requirement will stand alone' (cl 9.3.1) and that 'The parties agree to monitor the achievement of AAH on a monthly basis' (cl 9.3.2). There is provision for a meeting to discuss measures to avert any shortfall in a particular year (cl 9.3.3). A shortfall can be rolled over to the next year if those measures are implemented and there is still a shortfall (cl 9.3.4). However, if they are not implemented effectively then there is no shortfall in hours rolled over to the next year (cl 9.3.5). Taken together, these provisions manifest an intention that efforts will be taken to ensure that Salaried Employees are given sufficient hours of work to reach the AAH.

44    For GWEs and VSEs, Part A of the Enterprise Agreement provides for a form of guaranteed minimum payment. The concept of AAH is not applied to those categories of employment. Rather, in the case of a Guaranteed Wage Employee, there is to be a payment equal to 28 ordinary hours: Part A, cl 9.7.4. In the case of a Variable Salary Employee, it is a minimum annual salary paid fortnightly: Part A, cl 9.6.4. However, having regard to the terms of Part B, it appears that for both categories of employees whose primary place of work was Dampier, the minimum payment was based on an 'hourly rate of pay'.

45    The relevant remuneration rates that are applicable at Dampier are set out in Part B. However, there is an explanation provided in cl 11 of Part A as to the source of the figure of 1820 hours and the payment of certain allowances. Insofar as it may be relevant for present purposes, it is as follows:

The salaries and composite hourly rates set out in this Agreement are in full and final settlement of allowances, leave loadings, shift premiums, meal monies and any application of the irregular part of any roster, where a roster applies. Where additional payment arrangements are detailed in this Agreement payment for such arrangements will be made in addition to the salaries and composite hourly rates.

The salaries and composite hourly rates in this Agreement were implemented when the Stevedoring Industry Award 1999 applied. The composite hourly rate was based on a 35-hour week averaged over a 12-month period (which equates to 1820 Worked Hours per Year) inclusive of wage related allowances, shift penalties, overtime, public holidays, weekend penalties and a meal allowance. For the avoidance of doubt, a 35-hour week averages over a 12-month period e.g. an Employee may work 20 hours in one week and 60 hours in the following week. Over the course of 12 months, the average hours worked will be 35 hours per week.

The FSE and PFSE salaries set out in the table Part B of this Agreement continue to include the meal allowance that prior to its inclusion in the composite rate was non-taxable in accordance with Australian taxation laws. As at 1 August 2016, the notional meal allowance sum is agreed to be $1820 per year for FSEs and PFSEs. For VSEs, PVSEs, GWEs and Supplementary Employees, the notional meal allowance component is a pro rata (based on their hours worked) of $1820 per year for an FSE and PFSE.

46    Within Part A there is also provision in cl 13 for measures that may be taken by Qube in the event of specified adverse economic events. Those measures include downgrading the employment status of employees. The provisions contemplate the possibility that an employee may move from being a Salaried Employee (where that person is a PFSE) to a Non-Salaried Employee. Once the need for those measures comes to an end then there is provision for the downgrade to be reversed. These provisions do not deal with the effect of these changes upon the way in which the AAH will be calculated for those persons who have only been Salaried Employees for part of the year.

47    As to overtime, Part A has the following provisions:

(1)    Hours worked in excess of or outside 'ordinary hours' will be paid in accordance with overtime provisions of the applicable Award (cl 30.2);

(2)    Permanent Employees who work in excess if their AAH will be paid at double time for hours worked Monday to Saturday and double time and one half for hours worked on Sunday (cl 30.5);

(3)    For VSEs, PVSEs, GWEs and Supplementary Employees, overtime will be paid at one and one quarter times the composite rate for every hour worked above 1820 hours in a yearly cycle (cl 30.7.1);

(4)    For VSEs, PVSEs, GWEs and Supplementary Employees: 'The timeframe for determination [of overtime] will be the same as for the AAH accrual period for FSEs and PFSEs' (cl 30.7.2);

(5)    The provisions of cl 30 do not apply in Port Hedland and Dampier (cl 30.7.3).

48    It can be seen that the overtime payments provided for by Part A are very different for 'Permanent Employees' who have an AAH (that is, FSEs and PFSEs) compared to other categories of employees. However, for all employees the accrual of the overtime entitlement depends upon achieving 1820 hours in a yearly cycle (noting that the AAH accrual also includes periods of leave whereas, for other employees, the accrual is based on hours worked). However, these general provisions did not apply to Mr Gordon because he worked at Dampier.

49    There is the following provision in cl 45.8 of Part A concerning the accrual of leave:

Any irregularly engaged Employees (VSEs, PVSEs, GWEs or Supplementary Employees) appointed to a FSE or PFSE will preserve his/her leave accrued prior to the appointment.

50    This express provision makes clear that accrued leave entitlements are carried across when an employee moves from the status of a Non-Salaried role to the status of a Salaried Role. Qube relied upon the express provision as a contextual matter. As there was no equivalent express provision concerning accrued days worked in a Non-Salaried role when it came to counting AAH for a Salaried Role, it was said that, in context, it should be concluded that no such accrual was intended.

51    Part B of the Enterprise Agreement contains provisions that apply to Dampier. A Salaried Employee who is employed to work at Dampier will be remunerated in accordance with Part B even if called upon to work temporarily at another location (cl 1.3). However, Non-Salaried Employees will be remunerated according to the conditions that apply at their place of work (cl 1.4).

52    As to remuneration, Part B provides for minimum fortnightly payments to FSEs and PFSEs (that is, Salaried Employees) of one twenty sixth of a specified salary set out in a table which refers to 1820 'Annual Work Hours'. For Guaranteed Wage Employees and Variable Salary Employees, Part B sets out a separate table of composite hourly rates of pay. That table also states that 'fortnightly guarantee payments…are set out in Part A'.

53    As to overtime, Part B makes specific provision in cl 6. It has already been quoted but is repeated here for ease of reference:

6.1    FSEs and PFSEs are entitled to overtime paid at the Supplementary Employees hourly rate when they have achieved 1820 Worked Hours in a Year,

6.2    VSEs, PVSEs and GWEs who work more than 1820 hours in a Year will be entitled to be paid overtime at the Supplementary Employees hourly rate.

54    The 'Supplementary Employees hourly rate' is a composite hourly rate which incorporates 'a 20% loading in respect of leave etc., as well as shift premiums and allowances and meal monies': Part B, cl 2.3.1. The rates are specified in a table.

55    So, Part B provides for a different approach to remuneration for Salaried Employees on the one hand when compared to Non-Salaried Employees on the other hand. Salaried Employees are paid one twenty sixth of an annual salary each fortnight up until the PFSE has 'achieved 1820 Worked Hours'. Then, they are entitled to overtime paid at the 'Supplementary Employees hourly rate'. As has been mentioned, the term 'Worked Hours' is defined in Part A to include 'any period of paid leave, training, public holidays and any other paid arrangement contained in this Agreement'. So, in determining whether a PFSE is entitled to overtime, periods of leave are counted. Non-Salaried Employees are paid a guaranteed minimum of 28 hours per week and where those hours and more are worked in a week they are paid the hourly rate for the additional hours.

56    The final provision of relevance for present purposes is cl 16.1.3 of Part B. It concerns the payment of an allowance for reasonable remote living expenses. It is expressed in the following terms:

Employees who work in Port Hedland and Dampier will accrue an entitlement to claim [the remote living allowance] on the basis of 1820 Worked Hours each Year. Where an Employee accumulates fewer Worked Hours over a Year, they will accrue a pro-rata entitlement to claim. Accruals are cumulative over the Year.

57    The following explanation is given in Part B as to the application of cl 16.1.3:

Explanation: The maximum amount of the [remote living allowance] will occur where an Employee works 1820 hours in a Year or pro-rata of 1820 hours where their employment under this Agreement is for less than 12 months (e.g. nine months = 75% of the maximum [remote living allowance]) or where an Employee accumulates fewer Worked Hours in a Year (e.g. 910 Worked Hours equates to 50% of the maximum [remote living allowance]).

Note: the 1820 hours includes any Worked Hours.

58    Both the terms of cl 16.1.3 and the explanation are expressed as applying to 'Employees' in general. The definitions in Part A include the following definition of Employee:

means a stevedoring Employee who works in the classifications set out in clause 11.1 and Schedule 2 of this Agreement and is employed at the port of Dampier.

59    There are detailed provisions in Part B as to how the allowance may be claimed. It can be claimed as an allowance or as a reimbursement for actual expenses. Throughout these provisions they refer to 'Employees' and 'Hours Worked'.

60    So, it appears that in the detailed provisions concerning the remote living allowance, the reference to 'Worked Hours' is intended to also refer to the hours worked by Non-Salaried Employees. This is the only way to make sense of the provisions in what is their clearly intended application to all Employees.

61    Given that the nature of the remote living allowance is such that it does not give rise to the same issues as apply to the overtime issue, care must be taken in using these provisions as context to aid in the issues that arise concerning the payment of overtime. However, they do provide some general indication that qualification for the remote living allowance would be counted by treating Worked Hours during employment as a Salaried Employee as equivalent to hours worked as a Non-Salaried Employee. Therefore, an employee transitioning from a Non-Salaried position to a Salaried position in the course of a year would accrue the hours worked as a Non-Salaried Employee in calculating the entitlement to a remote living allowance for the year.

Qube's principal contentions

62    Qube's principal contentions on appeal were as follows:

(1)    it is cl 6 of Part B that must be construed because it must be the source of any entitlement to overtime on the part of Mr Gordon;

(2)    the correctness standard applies to the question of proper construction of the Enterprise Agreement;

(3)    the magistrate concluded that the hours worked by Mr Gordon as a GWE and VSE counted for the purposes of determining whether Mr Gordon qualified for any payment at the overtime rate in the relevant year;

(4)    the language of cl 6 does not accommodate or generate any overtime entitlement for an employee who was not an FSE or PSFE for the whole of the relevant year 'and/or' had not 'achieved 1820 Worked Hours' in the year;

(5)    'the hours of work and salary payment arrangements of an FSE or PFSE are inexorably tied to their status as such over the yearly period';

(6)    hours of work are not properly equated to Worked Hours;

(7)    if hours of work are equated to Worked Hours for the purposes of overtime then there is the prospect of double-claiming (of the kind I have already described);

(8)    matters of context indicate that where entitlements are accrued within a year when an employee moves from a GWE or VSE role to a FSE or PFSE role then there is express provision in the Enterprise Agreement for that accrual; and

(9)    the decision by the magistrate involved the adoption of a method of calculation which, on any view, cannot be sustained by reference to the language in cl 6 and involved an adoption of an outcome that the magistrate considered the fairest of the two alternatives presented.

The Union's principal contentions

63    The Union's principal contentions on the appeal were as follows:

(1)    the Enterprise Agreement establishes a form of hierarchy of employment;

(2)    it is to be expected that employees would move from one category of employment to another in the course of a year;

(3)    the provisions in Part A as to adverse economic events contemplate that the status of employees may move down and up the hierarchy in the course of a year;

(4)    the provisions of Part A refer to the annual figure of 1820 hours as being derived from the Award provisions which provided for a 35 hour week averaged over a 12 month period;

(5)    the entitlement to overtime hours based on Worked Hours is not expressed to be contingent upon a PFSE or FSE working 1820 hours as a PFSE or FSE and it would be a 'gloss' to impose such a requirement;

(6)    Worked Hours can be achieved for the purpose of calculating overtime when an employee is working as any form of Permanent Employee;

(7)    the prospect of some form of double-dipping where an employee is promoted during a year to the status of a PFSE or a FSE is speculative and would not apply in every case. Further, it is a matter that Qube would be expected to take into account in considering whether to offer what is a progression through the available hierarchy of employment provided for by the Enterprise Agreement;

(8)    employees would only work additional hours above 1820 hours per year where requested to do so by Qube and, according to applicable law, such requests could only be made where it was reasonable;

(9)    there would be a form of incongruency with the law that applies to overtime 'if Qube could request or require an employee to work in excess of 1820 hours in a…year (being in excess of 35 ordinary hours averaged over 52 weeks) and have hours excess to these classed as ordinary hours' that were not paid as overtime; and

(10)    the evident purpose of the Enterprise Agreement is to remunerate all employees at the applicable overtime rate once they have worked 1820 hours and it would be inconsistent with that purpose if employees who changed status during the year could work 1820 hours without having any entitlement to be paid overtime.

The proper construction of cl 6 of Part B

64    The construction issue arises because of the different ways in which remuneration is calculated for Non-Salaried Employees compared to Salaried Employees. Consequently, hours worked by a Non-Salaried Employee do not equate to Hours Worked by a Salaried Employee. For reasons that have been given, there is the real and likely potential for anomalous outcomes if hours worked as a Non-Salaried Employee simply can be accrued and counted as Worked Hours when a Non-Salaried Employee switches to being a Salaried Employee in the course of a year. The present case illustrates that potential. Ultimately, the magistrate accepted that anomaly and reached a conclusion as to the calculation of the overtime entitlements of Mr Gordon that involved an adjustment to the result that would flow if hours worked as a Non-Salaried Employee were simply counted as Worked Hours for the purposes of determining the overtime entitlement of an employee who had switched from being a Non-Salaried Employee to being a Salaried Employee in the course of a year.

65    Applying the principles of construction to which I have referred, the following matters of text and context assume significance:

(1)    Clause 6.1 deals with all categories of employees and provides for overtime to be paid to all of them based upon an annual calculation;

(2)    For all employees the annual hours figure is 1820 hours;

(3)    The overtime rate to be applied to all employees is the same;

(4)    The Enterprise Agreement provides for categories of employment of increasing certainty as to hours of employment and valued employees may be expected to be promoted from one category to the next during the course of a year;

(5)    The Enterprise Agreement explains the origin of the annual hours figure as reflecting an award entitlement based upon a 35 hour working week;

(6)    The Enterprise Agreement also provides for economic circumstances in which employees, for a time, may be moved to a category of employment that has less certainty as to hours worked;

(7)    Taking the above matters together, switching is expected and it would be most anomalous if employees who moved from one category of employment to another became disqualified from an entitlement to overtime;

(8)    The annual nature of the qualification for overtime is such that most employees who switched from one category to another without being able to accrue hours worked would be unable to qualify for overtime even though they had worked, on average, more than 35 hours per week over the course of a year;

(9)    The language of cl 6 does not manifest an intention that some employees would not be able to earn overtime even though they had worked 1820 hours over the course of a year, quite the contrary.

66    To construe the Enterprise Agreement in the manner contended for by Qube would be contrary to the intention evident from the express terms of the Agreement which, as I have explained, is to the effect that all employees should be entitled to overtime if they worked more than 35 hours per week on average over the course of a year. As the Enterprise Agreement states explicitly, in providing for overtime after 1820 hours of work, the Enterprise Agreement gives effect to an overall entitlement of that kind to be found in the Award. The construction advanced by Qube would deprive most employees who switched from being Non-Salaried Employees to Salaried Employees during the course of a year of an entitlement to overtime at the specified rate. That is because the hours worked as a Non-Salaried Employee before switching would not count for the purposes of determining entitlement to overtime. That is a most unlikely outcome in circumstances where it is evident from the terms of the Enterprise Agreement that it provides for a hierarchy of employment status through which faithful employees properly discharging their responsibilities may expect to be promoted over time.

67    Further, I do not regard cl 6 as manifesting an intention that switching employees must be able to point to an entitlement to overtime based solely on hours worked under cl 6.2 or Worked Hours under cl 6.1. Rather, reading the clause as a whole it manifests an intention that both Salaried Employees and Non-Salaried Employees will achieve or be entitled to overtime. The failure to deal expressly with the case of switching employees does not manifest an intention that switching employees will not be entitled to overtime. Given the importance of overtime in industrial agreements as well as the statutory provisions as to reasonableness of overtime requirements, it is most unlikely that there would be a group of employees who could be made to work very extensive hours on the basis that it did not amount to overtime because work for part of the year was not to be counted in determining whether the work amounted to overtime. It would be an unreasonable outcome that is a most unlikely in an industrial context.

68    Finally, I do not regard the provisions in the Enterprise Agreement that deal with some aspects of accrual of entitlements to indicate an intention that there could be no accrual of hours when switching between Non-Salaried and Salaried employment. There are many entitlements provided for by the Enterprise Agreement. Most are silent as to the way in which they might be accrued where there is a change in employment status. In those circumstances, I regard it to be more likely, in the context to which I have referred, that silence indicates that the entitlements can be accrued despite the change in status.

69    Having regard to all these aspects that arise from a consideration of the Enterprise Agreement as a whole, I regard it as being implicit in the terms of cl 6 of Part B that all employees accrue an entitlement to overtime if they complete, on average, more than 35 hours of work during a year. This includes employees who switch status during the year. Further, given the differences between the way employees are remunerated over the course of a year and the entitlement of Salaried Employees to count leave as part of their Worked Hours, I consider it to be implicit in the terms of cl 6 that there would be a reasonable adjustment made when determining overtime payments for the year for switching employees. The required reasonable adjustments are to be made on the basis that hours accrued while working in one capacity can be carried forward for the purposes of determining overtime payments to a period when the employee is working in another capacity with the adjustment to ensure that there was no additional financial benefit (or loss) for a switching employee compared to a continuing employee.

70    Each of cl 6.1 and cl 6.2 should be construed accordingly.

71    In the case of a Non-Salaried Employee who had switched to being a Salaried Employee, a reasonable adjustment would be an adjustment of the kind determined by the magistrate in the present case.

72    It was submitted for Qube that there could be no means by which the magistrate's approach could be reconciled with the language of cl 6 in Part B. The submission advanced was to the effect that the magistrate had 'turned off' the entitlement to be paid the fortnightly payment based upon 1820 hours and this was not provided for by the Enterprise Agreement. However, in substance, the calculation accepted by the magistrate was a method of adjusting to ensure that there was no additional benefit (or loss) to Mr Gordon as a switching employee compared to a continuing employee. The adjustment made was to deduct those payments that would amount to double payments for hours worked. The reasoning accepted that there is both an entitlement to the fortnightly payment during the period the person was a Salaried Employee (being a pro rata payment for 1820 hours worked in the year) and an entitlement to be paid at the overtime rate for hours worked beyond 1820 hours over the course of a year but not an entitlement to be paid both those amounts for any of the 1820 hours. Therefore, it was not implicit in the calculation that Mr Gordon's entitlement to the fortnightly payment was not being recognised. Rather, viewed as a whole, there was a reasonable adjustment made to ensure that Mr Gordon was paid at the overtime rate for hours worked over 1820 hours in the year but did not receive double payment for any of the hours worked up to 1820 hours. For reasons I have given, the making of an adjustment of that kind was implicit in the language of the Enterprise Agreement when it came to overtime to be paid to employees switching status during the year.

73    It follows that I do not accept that Qube has demonstrated any error in the relief granted by the magistrate. In particular, the magistrate was correct to conclude that Mr Gordon was entitled to be paid the difference between the fortnightly salary amount and the SE rate for overtime hours in the year above 1820 hours where Mr Gordon had already been paid for those hours as hours worked as a Non-Salaried Employee. He was entitled to that amount by way of reasonable adjustment to give effect to his implicit entitlement to be paid overtime based upon hours worked over the whole year even where he switched employment status during the year. Further, there was no error by the magistrate in not adopting a construction whereby the hours worked as a Non-Salaried Employee did not count at all in determining whether an employee was entitled to overtime under cl 6.1 of Part B.

Qube's reliance upon authority where case failed on basis that ambiguity could not be resolved

74    Qube advanced a submission to the effect that the magistrate should have dismissed the claim by the Union because it had concluded (correctly so it was submitted) that the Enterprise Agreement did not provide for what was to occur in the circumstances where an employee switched from being a Non-Salaried Employee to being a Salaried Employee during the course of the year, nor did it provide for the practice that had been adopted by Qube of adopting a form of pro-rata calculation based upon the part of the year that a person was a Salaried Employee. In those circumstances, it was said that the proper conclusion to reach was that the Union had failed to discharge its onus in a case where it had the burden of proving the contravention that it alleged.

75    The magistrate did describe the Enterprise Agreement as being 'silent on how employee overtime hours are treated when they transition through the employee categories' and that the silence extends to applying 'a pro rata formula to calculate overtime hours for hours achieved for part of a Year'. However, the magistrate went on to reach a conclusion as to how to construe the language of cl 6. The magistrate's conclusion was expressed in the following terms (at [56] of her Honour's reasons on liability):

Accordingly, the preferred construction of Part B, cl 6 of EA 2020 is that submitted by the claimant, namely that Salaried and Non-Salaried Employees become entitled to overtime paid at the SE hourly rate at the time when they achieve or work the total of 1820 hours in a Year regardless of the category of employment during the Year.

76    The magistrate did not simply adopt what was considered to be a fair approach. The magistrate made a finding as to how cl 6 of the Enterprise Agreement should be construed.

77    On appeal, the burden of Qube as appellant is not only to demonstrate error in the magistrate's construction but that there was error of a kind that had a consequence for the finding that Qube had contravened by not paying at least the amount awarded. There was no issue raised as to the appropriateness of the penalty in the event that the appeal by Qube as to the decision concerning the contravention was upheld.

78    Consequently, it is not enough for Qube to demonstrate error by the magistrate as to the construction of cl 6 of Part B of the Enterprise Agreement. Rather, it must establish that the error was of a kind that affected the relief granted by the magistrate. In order to do so, Qube had to demonstrate that, on the case advanced by the Union before the magistrate, there was no reasoning as to the construction of the Enterprise Agreement that would sustain that relief.

79    In issue before the magistrate was the proper construction of the overtime provisions of the Enterprise Agreement insofar as they applied to the circumstances of Mr Gordon in the year ending 30 June 2022. In those circumstances, it was open to the magistrate to have reached a conclusion as to the interpretation of the overtime provision that did not accord precisely with that contended by the Union that resulted in part of his claim being upheld. In that sense, it was not an all or nothing case. Likewise on appeal, there will be no demonstrated error if this Court reaches a conclusion as to the proper construction of cl 6 of Part B of the Enterprise Agreement that means that Mr Gordon was entitled, at least, to the amount of overtime that Qube was ordered to pay to him.

80    For reasons that have been given, on the proper construction of the Enterprise Agreement Mr Gordon was entitled to the amount that Qube was ordered to pay.

81    Qube relied upon the reasoning of North J in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Qantas Airways Limited [2001] FCA 547 where his Honour found that the relevant clauses were ambiguous and also that regard to background facts did not provide a basis to resolve the ambiguity. On the basis that the applicants bore the onus, his Honour found that, in those circumstances, the proceedings should be dismissed. Respectfully, I have some difficulty with the proposition that an issue as to whether the terms in an enterprise agreement that were ambiguous could not be resolved because there were no background facts that could bear upon the issue. In such circumstances, the agreement does not lack an objective meaning. It either has or does not have the meaning that would support the relief contended for by the applicants. In any event, for reasons I have given, this is not a case of that kind.

Conclusion and orders

82    For the reasons I have given, Qube's appeal ground has not been made out. It follows that the appeal must be dismissed.

Associate:

Dated:    23 July 2026