CONTRACTUAL BENEFIT CLAIM

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

CITATION : 2024 WAIRC 00132

DELIVERED : TUESday, 26 March 2024

FILE NO. : B 2 OF 2023

Applicant

AND

Bowra and O'DeA PTY LTD

Respondent

CatchWords : Industrial Law (WA) - Interpretation of Award and contractual entitlements - Funeral Industry Award 2010 - Dispute over payment of a penalty rate on public holidays - Whether an employee was entitled to payment at double time and a half under his contract of employment in addition to payment at the ordinary rate of pay for work on a public holiday - No entitlement found in Award or Contract - Application of ss 114 and 116 of the Fair Work Act 2009 - Application dismissed

Legislation : Industrial Relation Act 1979 (WA)
Fair Work Act 2009 (Cth)

Result : Application dismissed

Representation:

Applicant : Mr A Johnson

Respondent : Mr S R Pack (of counsel)

Case(s) referred to in reasons:

Agricultural and Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570

Black Box Control Pty Ltd v Terravision Pty Ltd [2016] WASCA 219

Brett Arthur King v Griffin Coal Mining Company Pty Ltd [2017] WAIRC 00102, 97 WAIG 527

Civil Service Association of WA Inc v Commissioner of Police, WA Police Service [2018] WAIRC 00414

Fazio v Fazio [2012] WASCA 72

Martin Fedec v The Minister for Corrective Services [2017] WAIRC 00828, 97 WAIG 1595

Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603

Jo Anne Stones v Director Troy Barbagallo The Horologist Pty Ltd [2019] WAIRC 00885

Kestell v Davey (No 2) [2022] WASC 383

Mak Industrial Water Solutions Pty Ltd v Doherty (No 2) [2023] WASC 279

Moama Bowling Club Limited v Armstong (No 1) (1995) 64 IR 238

S&K Investments Pty Ltd v Cerini [2016] WASC 233

WorkPac Pty Ltd v Skene (2018) 264 FCR 536

Decision

1         This matter involves a dispute over the interpretation of the terms of a contract, regarding the payment of penalty rates for work performed by an employee on public holidays (dispute).

2         The dispute was raised in a denied contractual benefit claim Stephen Pengelly (applicant), filed with the Commission under s 29(1)(b) of the Industrial Relations Act 1979 (WA) (IR Act), on 2 February 2023 (application).

3         In the application, the applicant, who works as a Funeral Director’s Assistant (FDA), claims his employer, Bowra and O’Dea Pty Ltd (respondent), breached the terms of his contract of employment (contract) by not paying him at the rate of double time and a half for all the hours he worked on a public holiday.

4         The applicant alleged this occurred on two dates; the WA Day Public Holiday on 3 June 2019 and on the Public Holiday in lieu of Boxing Day Public Holiday on 27 December 2021 (public holidays).

5         The applicant alleged that under his contract, the respondent should have paid him at the rate of double time and half (a penalty of 250%) on each of the hours on a public holiday that he would have ordinarily been rostered to work. The applicant however received payment at the rate of time and a half.

6         The parties agree the applicant received payment for the public holiday at his ordinary rate of pay on those hours he would have normally been rostered to work.

7         On 9 February 2023, the respondent filed a Form 3A – Employer Response to a Contractual Benefit Claim (response). In its response, the respondent denied that it had breached the applicant’s contract.

8         The respondent contended that because the applicant was already being paid for his days off on the public holidays at his ordinary rate of pay, the respondent was only required to pay the applicant at the additional time and a half during his usual rostered hours.

9         The respondent says this resulted in the applicant being paid at the rate of double time and half for those hours on the public holidays the applicant would have normally been rostered to work.

10      The parties do not dispute that for the hours the applicant worked on a public holiday that fell outside his normal rostered hours, the applicant was paid at the rate of double time and a half.

11      In this decision, I have considered the parties’ respective arguments on the interpretation of the applicant’s contract, regarding the entitlement it provides by way of an additional payment for work on a public holiday.

12      My conclusions regarding the applicant’s entitlement to be paid penalty rates for working on public holidays under this contract, are set out in the paragraphs that follow.

Contract of employment

13      The applicant commenced employment with the respondent as an FDA on 29 August 2013. He continues to be employed in this role.

14      The applicant signed a letter of engagement, dated 13 August 2013 (contract). The contract describes the position the applicant is employed in, his responsibilities and additional duties.

15      Next to the heading ‘Policies and Procedures’, the contract states:

 ‘All employees are required to abide by the company’s current and future policies and procedures which are generally set out in the enclosed Bowra & O’Dea Pty Ltd Policies and Procedures Manual and through the practising of occupational safety and health requirements.’

16      Beside the heading ‘Individual Flexibility’ the contract says:

Individual Flexibility

 ‘The terms and conditions of this contract may be varied by mutual agreement by the signing of a Flexibility Agreement between an individual staff member and Bowra & O’Dea Pty Ltd. The Flexibility Agreement may be terminated by the giving of four (4) weeks’ written notice by Bowra & O’Dea Pty Ltd or the individual employee.

 Flexibility Agreements generally relate to variances in:

(a) arranged hours for performing work; and/or

(b) rates for overtime, penalties and/or allowances; and/or

(c) leave loading.’ 

17      There is no evidence the applicant at any stage ever entered into a ‘Flexibility Agreement’ that was separate to or different to the contract.

Hours of work and additional duties

18      Beside the heading ‘Conditions of Employment’, the contract relevantly states the applicant’s hours of work are:

 ‘38 ordinary hours per week within the range of 7.00 am to 7.00 pm (as set out in the NES and Funeral Industry Award 2010).’

19      The contract also states:

 ‘You are required to work 38 hours per week, the hours to be determined by the Operations Manager or Assistant Operations Manager and generally to be worked between the hours of 7.00 am and 7.00 pm (less a 30-minute unpaid lunch break at an opportune time between the hours of 11.00 am and 2.30 pm).’

Out of hours work and call outs

20      In his role as an FDA, the applicant is required to attend aged care facilities, private residences, and the like, for the purposes of transporting a deceased to a mortuary at the respondent’s premises (removals).

21      As the timing of a person’s death is unpredictable, the requirement to perform removals will not only arise during a FDA’s ordinary hours of 7.00 am to 7.00 pm Monday to Friday, but outside this span, at times that are unplanned (out of hours work).

22      FDAs may also be called out to perform a removal after they have gone home or on their days off, which includes Saturdays, Sundays and Public Holidays (call outs).

23      The requirement to perform removals that occur out of hours and to attend to call outs, is contemplated in the contract. Next to the heading ‘Additional Duties,’ the contract says:

‘Bowra & O’Dea seek to have a flexible and skilled workforce to meet the needs of its clients. You will be required to work after hours rosters (e.g. one weekend in six) and be able to work additional overtime as negotiated.’

The applicant’s salary

24      The contract contains terms regarding the applicant’s salary, hours of work and additional duties. Beside the heading ‘Salary’, the contract says the Base Salary is per annum for a full time equivalent (FTE), plus overtime and allowances as outlined in the ‘attached information sheet’.

25      The information sheet is titled ‘Bowra & O’Dea – Funeral Directors – Overtime and Allowances Funeral Director’s Assistant’ (overtime and allowances sheet).

26      Like the contract, the overtime and allowances sheet sets out the ordinary hours of work to be performed. It states that a full-time equivalent workload is 38 ordinary hours per week (Mondays to Fridays) calculated over a one-week period within the range of 7.00 am to 7.00 pm, as set out in the NES and Funeral Industry Award 2010.

27      More importantly, the overtime and allowances sheet describes the various penalty rates that apply to overtime and the out of hours work FDAs may be required to perform. The overtime and allowances sheet describes each of the penalty rates that apply for working on Saturdays, at Saturday funerals, Sundays and for work on public holidays. For all work done on a public holiday, the overtime and allowances sheet states that employees are to receive 250% at the appropriate rate, with a minimum of two hours for each callout. 

28      The parties agreed the overtime and allowances sheet has been updated and amended from time to time, during the course of the applicant’s employment. It has also been applied to all of the respondent’s relevant employees including FDAs. The version of the overtime and allowances sheet, which the applicant submitted as an attachment to the application, was current as at 1 July 2016.

29      The most recent version of the overtime and allowances sheet, which was attached to the Witness Statement of Justine Louise Best (Best Statement), was current as at 1 July 2019. While it continues to apply, the overtime and allowances sheet has not been revised since.

30      Regardless of the version referred to, the parties agreed that for all work done on a public holiday, the overtime and allowances sheet provides for employees to be paid 250% (2.5x) the ordinary rate, with a minimum of two hours for each callout. 

The Award

31      Under s 47 of the Fair Work Act 2009 (FW Act) the applicant’s employment has at all material times been covered by the terms of a modern award.

32      Initially the applicant’s employment was covered by Funeral Industry Award 2010, (2010 Award), which is referred to in the overtime and allowances sheet.

33      On 1 November 2020, the 2010 Award was replaced by the Funeral Industry Award 2020 (2020 Award). Despite the issuance of the 2020 Award, the relevant conditions regarding work on public holidays and the penalty rates that were contained in the 2010 Award have not changed. In the circumstances, it is reasonable to collectively refer to the 2010 Award and the 2020 Award together, as the Award.

34      The Award prescribes a minimum set of wages and working conditions, which apply across the Funeral Industry.

Work on Public Holidays

35      The relevant provisions regarding payment for work on public holidays that appear in the Award are extracted below.

36      In so far as it has application to work on Public Holidays, cl 19.4 (Removals) relevantly provides as follows:

(a) Where an employee is called to undertake removals between the hours of 7.00 pm and midnight and work is completed at or prior to midnight:

(i) a full-time or part-time employee will be paid 150% of the minimum hourly rate for the first 3 hours of work and 200% of the minimum hourly rate thereafter; and

(ii) a casual employee will be paid 175% of the minimum hourly rate for the first 3 hours of work and 225% of the minimum hourly rate thereafter.

(b) Where an employee is called to undertake a removal, any portion of which occurs between the hours of midnight and 7.00 am:

(i)  A full-time or part-time employee will be paid 200% of the minimum hourly rate; and

(ii)  A casual employee will be paid 225% of the minimum hourly rate.

(c) If a removal starts between the starting and finishing times as prescribed in clause 13.2, the employee will be paid at the rate prescribed in clause 19.1. If a subsequent removal is requested after 7.00 pm, although the original removal started before that time, the employee will be paid at the rate as prescribed in clause 19.4, for the subsequent removal.

37      Clause 21 (Penalty Rates) describes the penalties that are to be paid for work on Public Holidays as follows:

Work on Saturday, Sunday or public holidays

With the exception of removals, payment for work performed on a Saturday, Sunday or public holiday (or day or part-day substituted for a public holiday) will be as follows:

 (c) Public holidays

  (i) 200% of the employee's minimum hourly rate will be paid for all work performed on a public holiday.

  (ii) The rates prescribed in clause 21.1(c) for shiftworkers are in substitution for, and not cumulative on, the shift penalty prescribed in clause 20.5.

  (iii) Hours of work performed immediately before or after a part-day public holiday, that form part of one continuous shift, are counted as part of the minimum payment/engagement period in clauses 10.5 and 11.3.

38      Also relevant is cl 27 of the Award (Public Holidays) which states:

Public holidays

27.1 Public holiday entitlements are provided for in the NES.

27.2 An employee who works on a public holiday will be paid in accordance with clause 21.1(c).

NES and Public Holidays

39      In relation to clause 27.1 of the Award, the National Employment Standard (NES) is contained in the FW Act. There are two elements to the entitlement to paid time off on a public holiday in the NES. They appear in ss 114 and 116 of the FW Act.

40      The entitlement to be absent from work on a public holiday is under s 114 of the FW Act which provides:

 Employee entitled to be absent on public holiday

 An employee is entitled to be absent from his or her employment on a day or part-day that is a public holiday in the place where the employee is based for work purposes.

41      The entitlement to paid time off is contained in s 116 which says:

 Payment for absence on public holiday

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

 Note: If the employee does not have ordinary hours of work on the public holiday, the employee is not entitled to payment under this section. For example, the employee is not entitled to payment if the employee is a casual employee who is not rostered on for the public holiday, or is a part-time employee whose part-time hours do not include the day of the week on which the public holiday occurs.

42      Despite providing for an entitlement to paid time off on public holidays, the NES does not contain an express provision for payment at a particular penalty rate, where an employee may be required to work on a public holiday. The payment of penalty rates on public holidays is instead left to provisions that may be contained in modern awards, enterprise agreements or employees’ contracts of employment.

Dispute over payment

43      Ms Best’s statement, which was admitted into evidence by agreement, provides some context as to how the dispute arose.

44      In her statement, Ms Best explained the respondent uses a payroll system known as Chris21. She said the system was introduced in or about 2011 or 2012.

45      Ms Best said that until recently FDAs completed hard-copy timesheets at the end of each week. These timesheets were submitted to the respondent’s operations team and once approved, were forwarded to payroll for inputting into Chris21. On payment, a payslip was generated and provided to an employee.

46      Ms Best said the timesheets the FDAs completed distinguished between 'standard hours' and 'non-standard hours'. She explained that standard hours are those worked as part of the 38 ordinary hours per week within the range of 7.00 am to 6.00 pm. The ordinary hours are recorded on the payslip as (1x).

47      Ms Best said that non-standard hours are worked outside of employees' ordinary hours and include overtime performed on a normal workday or out of hours work on a day where an employee is not rostered to work.

48      Ms Best said that when completing a timesheet, an FDA, in columns on the timesheet was required to record whether the non-standard hours were to be paid at the rate of time and a half (1.5x), double time (2.0x) or double time and a half (2.5x) for hours worked on a public holiday.

49      In her statement, Ms Best said that if an FDA normally worked on a day which was a public holiday and did not work, the standard 7.6 hours (being 1/5 of the 38 ordinary hours) were entered on the timesheet as standard hours. She said employees commonly wrote 'public holiday' next to these days on their timesheets, to distinguish days off for public holidays from the days an FDA actually worked.

50      Ms Best said that for a period prior to July 2016, FDAs who worked on public holidays were paid for both the public holiday at their ordinary rate of pay, plus 2.5x their ordinary rate for any hours worked. Ms Best claimed that this was due to an error in the respondent’s payroll system.

51      Ms Best stated that because of the error, FDA’s, which included the applicant, received the equivalent of (3.5x) the ordinary rate for work performed on a public holiday, for those hours FDAs would have normally been rostered to perform ordinary hours.

52      Ms Best said that in July 2016 the respondent notified FDAs that they had been overpaid but the respondent would not be seeking to recoup any past overpayment.

53      Ms Best stated that since July 2016, the payslips the respondent has issued to FDAs have itemised payment for public holidays in the following way:

(a)    If an FDA was normally rostered to work on a public holiday and did not work, their payslip would show they received payment for 7.6 hours for a public holiday at the 1x rate.

(b)    If an FDA was normally rostered to work on a public holiday and worked less than 7.6 hours during what was their ordinary rostered hours their payslip would show they received:

1. payment for 7.6 hours for a public holiday at the 1x rate; plus

2. for the hours the FDA worked on the public holiday they would have been normally rostered to work ordinary hours, payment at the 1.5x rate.

(c)    If the FDA was normally rostered to work on a public holiday and worked either more than 7.6 hours or at times worked outside their normal rostered hours, their payslips would show they received:

1. payment for 7.6 hours for a public holiday at the 1 x rate; plus

2. for the hours the FDA worked during their normal rostered hours up to 7.6 hours, payment at 1.5x rate; and

3. any time beyond 7.6 hours or that was worked outside their normal rostered hours would be paid at the 2.5x rate.

54      Ms Best said that for each of the hours the FDAs worked on a public holiday, they were in effect paid the equivalent of 2.5x for each hour worked.

55      Ms Best gave evidence about the applicant’s timesheets and payslips for the public holiday he worked on 3 June 2019 and 28 December 2021. These payslips were attached to the Best Statement. The information contained in both payslips is consistent with the method of payment Ms Best described.

Principles to be applied when interpreting contracts

56      This case not only involves interpreting the terms of the applicant’s contract, but it also requires me to have regard to the construction of the Award.

57      The relevant principles to be applied when interpreting contracts of employment were described in Brett Arthur King v Griffin Coal Mining Company Pty Ltd [2017] WAIRC 00102, 97 WAIG 527 (Griffin Coal), where Senior Commissioner Kenner (as he then was) at [10] noted that the interpretation of a contract, like any other instrument is a 'text-based activity'.

58      At [11] the Senior Commissioner set out the relevant principles which the Court of Appeal summarised in Black Box Control Pty Ltd v Terravision Pty Ltd [2016] WASCA 219 at [42].

59      These principles were recently restated by Quinlan CJ in Mak Industrial Water Solutions Pty Ltd v Doherty (No 2) [2023] WASC 279 at [53]. They relevantly include by way of summary:

(a) The construction of a contract involves a determination of the meaning of the words of the contract by reference to its text, context and purpose. The starting point for the proper construction of a clause is the language used in the clause. In particular, one starts by identifying the possible meanings that the words chosen by the parties can bear.

(b) Ascertaining the meaning of terms in an instrument requires a determination of what a reasonable person would have understood those terms to mean. That inquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract, and the commercial purpose or objects to be secured by the contract. The instrument must be read as a whole.

Principles to be applied when interpreting awards and industrial instruments

60      The relevant principles to be applied when interpreting an award or industrial agreement were set out by the Full Bench of the Western Australian Industrial Relations Commission in Martin Fedec v The Minister for Corrective Services [2017] WAIRC 00828, 97 WAIG 1595 at [21] - [23].

61      In summary (omitting citations), the Full Bench stated:

The general principles that apply to the construction of contracts and other instruments also apply to the construction of an industrial agreement;

(1) the primary duty of the court in construing an instrument is to endeavour to discover the intention of the parties as embodied in the words they have used in the instrument;

(2) it is the objectively ascertained intention of the parties, as it is expressed in the instrument, that matters; not the parties' subjective intentions. The meaning of the terms of an instrument is to be determined by what a reasonable person would have understood the terms to mean;

(3) the objectively ascertained purpose and objective of the transaction that is the subject of a commercial instrument may be taken into account in construing that instrument. This may invite attention to the genesis of the transaction, its background and context;

(4) the apparent purpose or object of the relevant transaction can be inferred from the express and implied terms of the instrument, and from any admissible evidence of surrounding circumstances;

(5) an instrument should be construed so as to avoid it making commercial nonsense or giving rise to commercial inconvenience. However, it must be borne in mind that business common sense may be a topic on which minds may differ;

(6) an instrument should be construed as a whole. A construction that makes the various parts of an instrument harmonious is preferable. If possible, each part of an instrument should be construed, so as to have some operation; and

(7) industrial agreements are usually not drafted with careful attention to form by persons who are experienced in drafting documents that have legal effect.

62      While there is a synergy between the approach to be applied on the interpretation of contracts and the principles to be applied to the construction of awards and industrial instruments, what his Honour Bromberg J stated in WorkPac Pty Ltd v Skene (2018) 264 FCR 536 at [197] is also relevant:

The starting point for interpretation of an enterprise agreement is the ordinary meaning of the words, read as a whole and in context: City of Wanneroo v Holmes (1989) 30 IR 362 (Holmes) at 378 (French J). The interpretation “… turns on 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 (Amcor) at [2] (Gleeson CJ and McHugh J). The words are not to be interpreted in a vacuum divorced from industrial realities (Holmes at 378); rather, industrial agreements are made for various industries in the light of the customs and working conditions of each, and they are frequently couched in terms intelligible to the parties but without the careful attention to form and draftsmanship that one expects to find in an Act of Parliament (Holmes at 378–9, citing Geo A Bond & Co Ltd (in liq) v McKenzie [1929] AR (NSW) 498 at 503 (Street J)). 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: see Kucks v CSR Limited (1996) 66 IR 182 at 184 (Madgwick J); Shop Distributive and Allied Employees’ Association v Woolworths SA Pty Ltd [2011] FCAFC 67 at [16] (Marshall, Tracey and Flick JJ); Amcor at [96] (Kirby J).

Applicant's submissions

63      The applicant submitted the language used in the contract and in the overtime and allowances sheet, provides for the payment of an entitlement for work on public holidays, that is additional to the 38 ordinary hours pay an employee is entitled for each week of work.

64      The applicant said that if the contract in its written terms had intended to apply a substituted rate of 2.5x in substitution for payment at ordinary rates, the contract would have spelt this out in its plain terms.

65      The applicant submitted the terms of the contract provide for a guaranteed minimum payment of ordinary time for a public holiday and that payment at the rate of 250% for any hours worked on a public holiday was additional to this entitlement.

66      The applicant also submitted the payment at the rate of the 2.5x rate he received for hours he worked on public holidays, in addition to payment for the public holiday, in the period 2013 ‑ 2016 was evidence of the parties’ agreement as to the terms that apply under the contract for work on public holidays.

Respondent's submissions

67      The respondent in its outline of submissions, submitted the applicant's claim is contradictory in that he contends the hours he works on a public holiday are both ordinary hours and public holiday hours, for which he is entitled to both his ordinary pay and public holiday pay.

68      The respondent submitted that public holiday hours are not ordinary hours and there is no basis in the contract for any other conclusion. The respondent said the question the Commission needs to consider is whether on its proper interpretation, the contract required the applicant be paid a total of 350% of his ordinary rate for the hours he worked on a public holiday.

69      The respondent argued the contract does not specifically deal with public holidays, absences on a public holiday, or payment for such absences. The respondent said the contract instead notes the applicant's 'general conditions of employment' are in accordance with the Award which provides for work on a public holiday to be paid at 200% of the employee's ordinary rate of pay.

70      The respondent submitted that under the contract, the applicant is ordinarily required to and would work, 38 ordinary hours per week, for which he was paid his base rate for working 38 ordinary hours. The respondent said that by reason of s 114(1) of the FW Act, the applicant is entitled to be absent from work on a public holiday, which overrides the applicant's contractual obligation to work 38 ordinary hours for that week.

71      This means the applicant is not entitled to be paid for 38 ordinary hours because he is not required to work 38 ordinary hours for that week and does not in fact work 38 ordinary hours for that week. The respondent submitted that this is consistent with the well-established industrial principle of 'no work no pay', where on the proper construction of a contract of employment, the payment of wages or salary is conditional on the employee's performance of work; Civil Service Association of WA Inc v Commissioner of Police, WA Police Service [2018] WAIRC 00414 [47] (Kenner SC) citing Automatic Fire Sprinklers v Watson (1946) 72 CLR 435.

72      The respondent submitted there is nothing in the contract that expressly states the applicant must be paid when he is absent from work on a public holiday. However, if the applicant would have ordinarily been rostered to work on the day on which a public holiday falls, s 116 of the FW Act provides the applicant is entitled to receive his ordinary pay.

73      The respondent argued the applicant’s entitlement to payment at his ordinary rate of pay on a public holiday is triggered only if the applicant is absent from work. If the applicant attends for work, s 116 of the FW Act cannot and does not apply (at least for the hours the applicant works).

74      The respondent submitted that if the applicant attends work on a public holiday, under the contract he is entitled to be paid at 250% of his ordinary rate 'for all work done' on the public holiday. For those same hours, the applicant is not entitled to receive the pay he would have received for working ordinary hours. That is because he is not working ordinary hours, he is working public holiday hours for which he is entitled to be paid at the penalty rate.

75      This respondent contended that its construction of the contract flows from the plain words used as they interact with the statutory regime for public holidays under the Award and the FW Act. The respondent contended this construction of the contract is consistent with the position under the Award, which is referred to in the contract, where the public holiday rate is the only rate to which an employee is entitled for work on a public holiday.

76      The respondent submitted there is no basis in the text, context or purpose of the contract, to read in an entitlement for an FDA to also be paid 100% of the ordinary rate in addition to the entitlement to 250% for all work done on a public holiday. Public holiday work hours are not also ordinary hours. A conclusion to the contrary would have wide-reaching effects beyond this matter.

77      In conclusion, the respondent submitted that it was clear that on a public holiday which falls on a day the applicant would ordinarily be required to work, he will either:

(a) be absent from work and therefore be entitled to 100% of his base rate; or

(b) attend work and be entitled to 250% of his base rate for the hours worked.

78      The respondent submitted the applicant will not and can never be entitled to both payments for the same hours, because it is impossible for him to be both absent from work and at work at the same time.

79      In relation to the two public holidays the subject of the applicant's claim, the respondent submitted that he had received the correct payment of 250% of his ordinary rate for the hours he worked. The respondent said nothing turns on the fact the applicant’s payslip, records these payments as two separate components.

80      Having now summarised the parties’ submissions, I will now apply the relevant principles of construction to interpret the contract.

Contract in writing

81      This is a matter where the parties have sought to reduce their agreement in writing. This case is not one where the applicant submitted there were terms implied in the contract either.

82      In circumstances where the parties agree to reduce their contract to writing, it is reasonable to infer the parties would have intended to record the entire terms of their contract unless there is an indication to the contrary. S&K Investments Pty Ltd v Cerini [2016] WASC 233, which was cited in Jo Anne Stones v Director Troy Barbagallo The Horologist Pty Ltd [2019] WAIRC 00885 at [23].

83      Noting this and pursuant to the principles to be applied, the task of interpreting the terms of the contract in this matter will very much be directed to an analysis of the text of the document and what they convey to a reasonable person.

84      It is apparent there are two parts to the applicant’s contract of employment. The first is the contract. The second is the overtime and allowances sheet that is referred to in the contract.

85      The words used in the salary clause of the contract I have set out in the preceding paragraph [24] make it plain the applicant’s earnings are comprised of a salary, plus overtime and allowances, as outlined in the overtime and allowances sheet.

86      While there have been different versions of the overtime and allowances sheet, over the course of the applicant’s employment and the entitlements contained were extended to other employees, it is reasonable to find from the language used in the contract that the parties had intended to include the overtime and allowances sheet in the applicant's contract of employment.

Application of the Award

87      The present case is also one where the applicant’s contract of employment must be interpreted alongside and in conjunction with, the provisions of the Award and the FW Act.

88      Although the Award is referred to in the contract, its terms are not expressly incorporated into the contract in the same way as the overtime and allowances sheet. This would have required clear words to have been used such as 'this Award will be incorporated into and will from a part of your contract of employment' or words to a similar effect as in; Griffin Coal at [68] referring to Moama Bowling Club Limited v Armstong (No 1) (1995) 64 IR 238.

89      The better conclusion is that the applicant’s contract is to be interpreted alongside and in conjunction with, the provisions of the Award. This much is clear because under the heading Conditions of Employment, the contract states:

Your general conditions of employment are in accordance with the Fair Work Act (2009) which includes the NES and the Funeral Industry Award 2010.

90      As a result, the applicant’s contract must be given an interpretation that is consistent with and cannot be inferior to, the terms of the Award or the NES.

Context in which the contract was made

91      In this matter, the contract, which is only four pages long, presents as a generic letter of engagement issued for the purposes of confirming an employee’s start date and commencing salary. While the contract contains some information on general conditions of employment, it is doubtful the contract was the product of an extensive negotiation between the parties.

92      As is the reality with so many contracts of employment and so long as the employer is offering work at a rate an employee is prepared to accept, the terms of many contracts of employment will in the main be defined by the prevailing terms that apply in the industry, whether by way of an award or the statutory minimums that apply under the NES.

93      The contract in this matter is no different. There was no evidence the parties, one on one, negotiated each clause and arrived at a bespoke set of contractual terms. It is also reasonable to conclude that what is contained in the applicant’s contract for performing work on a public holiday is a standard the respondent applies for all its FDAs.

94      It is reasonable to make these findings as the changes to the different versions of overtime and allowances sheet were made at the employer’s initiative. Noting the contract is in a standard format, it is not a huge leap to find the contract the applicant accepted was similarly generated by the respondent and issued as a matter of practice.

95      I therefore do not consider the parties turned their minds as to what would be paid on public holidays. I am more inclined to the view that they were content to rely upon what was contained in the Award and the NES.

96      From the evidence, is also reasonable to conclude that what is contained in the applicant’s contract and the overtime and allowances sheet for performing work on a public holiday is the standard the respondent applies for all its FDAs.

97      Having reached these conclusions, I now turn to consider what the Award provides for work on public holidays and how it is to be interpreted in conjunction with the contract.

Terms of the Award

98      Noting the authorities that I have referred to in the preceding paragraphs [65] – [67], the industrial context in which the Award must be viewed, is the provision of a set of conditions that apply as minimum across an industry.

99      The most logical starting point is under cl 27 of the Award (Public Holidays) which in the first instance, relevantly refers to the NES as the source of an employee’s public holiday entitlements.

100   The two relevant sections within the NES that deal with public holidays are ss 114 and 116 of the FW Act. On this, I have already noted that an employee’s right to have the day off work on a public holiday arises under s 114 of the FW Act.

101   I also earlier noted that where an employee is not required to work on a public holiday, s 116 of the FW Act states the employee must be paid what they would have received if they had been required to work during their ordinary hours of work.

102   As to what an employee is paid to work on a public holiday, cl 27(2) of the Award relevantly refers to cl 21 (Penalty Rates).

103   From the words used in cl 21 of the Award, it is clear the purpose of the clause is to ensure that where an employee is required to work on a public holiday, the employee must as a minimum, be paid the equivalent of double time for all hours worked.

104   There are no words that suggest an employee is to be paid double time in in addition to the payment the employee receives for a paid day off on a public holiday. Clause 21 only deals with what an employee must be paid if they are required to work on a public holiday.

105   When read together, the effect of words used in Clauses 21 and 27 of the Award and ss 114 and 116 of the FW Act, is consistent with what the respondent has suggested in its submissions; they separate an employee’s hours on a public holiday into two categories.

106   The first category is in respect of an employee’s ordinary hours for which they are entitled to a paid day off at their ordinary rate of pay, as if the public holiday was worked. In other words the entitlement is to payment for hours that are not worked on a public holiday, but are to be taken as paid time off.

107   The second category is for the hours that are worked on a public holiday. I accept the respondent’s characterisation of these as public holiday hours, for which the Award provides employees must be paid at the equivalent rate of double time for all hours worked. This in effect means, as the respondent submitted, that an employee cannot be both absent from work on a public holiday and entitled to payment for a day off and at work at the same time.

108   Noting the purpose of the Award is to provide for a minimum set of conditions, it follows that if the parties had intended employees covered by the Award would, in addition to or on top of the payment they receive for a paid day off on a public holiday, be paid at double the ordinary rate for all hours worked, the parties to the Award would have included an express clause to this effect.

109   Even when the most purposive construction is applied to Clauses 21 and 27 of the Award, in the absence of clear wording that supports a contrary construction, it does not appear reasonable that an employee under the Award would be entitled to both the payment for a paid day off on a public holiday, plus payment at double time for any time worked as well. An employee either gets one or the other.

Comparable Awards

110   As the Award is a modern award, which is comparable with modern awards in a range of other essential service industries including aged care, firefighting and even waste disposal, I considered whether the provisions relating to payment for public holidays, that are similar to public holiday provisions in the Award have been the subject of interpretation decisions in other industries. 

111   While the relevance of decisions on the interpretation of a modern award within one industry to the construction of an award in the Funeral Industry may be arguable, there were in any event no relevant cases relating to payment for work on public holidays where terms similar, to those in the Award, have been judicially considered or interpreted by the Commission.

112   At the very least, it was worth engaging in this exercise to show, for the applicant’s benefit that the construction of the modern award that applies in the Funeral Industry is not out of step with what applies in the modern awards for other comparable industries.

Terms of the contract

113   Having now determined how the Award should be interpreted, I will now turn to how this affects the construction of the applicant’s contract.

114   On this, there are only two only differences between words used in cl 21 of the Award and the terms of the overtime and allowances sheet. The first is in the use of the words ‘all work done’ on a public holiday which appears in the information sheet, and ‘all work performed’, which is in cl 21 of the Award.

115   The second difference is the quantum of the penalty rate that is specified in the overtime and information sheet for work that is done on a public holiday.

116   Turning firstly to the difference between the use of the word ‘done’ rather than ‘performed’, I do not consider that it makes a material difference to the construction of the contract. The Macquarie Concise Dictionary, Sixth Edition (Macquarie) relevantly defines ‘done’ as ‘completed’, ‘executed’ or ‘finished’.

117   The definition of ‘perform’ in the Macquarie is ‘to execute’, ‘carry out’ or to ‘do something.’

118   Noting the similarity in the ordinary meaning of the two words, it is reasonable to conclude the parties had intended the Award and the overtime and allowances sheet would be interpreted the same way.

Higher penalty rate

119   In relation to the quantum of the penalty rate, it is reasonable to conclude the respondent determined that it would pay a higher penalty rate than what is provided for in the Award for the purposes of securing two objectives:

i. to ensure the penalty rates it paid would be not less than but better than the Award;

ii. to provide an incentive to FDAs to perform out of hours work on public holidays.

120   While it is clear from the overtime and allowances sheet the respondent was at all material times, prepared to pay a penalty rate for work on public holidays that was above the Award, it does not contain any other words that are different to those used in the Award.

121   In other words, because the overtime and information sheet does not expressly stipulate the penalty of 250% is to be paid on top of, or in addition to, the payment employees are entitled to receive for a paid day off, the penalty is to be applied in the same way as the penalty of 200%, is applied under the Award.

122   It is reasonable to conclude therefore that if the parties had agreed the applicant would, in addition to or on top of the payment for a day off on a public holiday be paid 2.5x his ordinary rate for any hours worked, the parties would have included words to this effect in the contract and/or the overtime and allowances sheet.

Payment on public holidays after the contract was made

123   While the applicant submits the Commission should accept the evidence that in the period 2013 ‑ 2016 he received payment for both a paid day off on a public holiday and double time and half, to resolve the dispute in his favour, I am not permitted to do so.

124   It is well established that evidence of the conduct of the parties after a contract is formed is not admissible to prove the meaning of the written terms; see Agricultural and Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570; Fazio v Fazio [2012] WASCA 72 [192] (Murphy JA), cited with approval in Kestell v Davey (No 2) [2022] WASC 383 [46] (Smith J).

125   This is because subsequent conduct sheds light on what the parties may have thought the terms meant rather than what a reasonable person would understand the terms to mean: Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603 at [4], [322]. As a result, I am not, for the purposes of interpreting the contract, able to have regard to the evidence the applicant previously received the benefit of payment at the higher rate in addition to his paid day off.

Conclusion

126   While I accept the payment of a higher rate on a public holiday is intended to compensate an employee for the interruption to their paid time off on a public holiday, I also acknowledge that for some employees, the amount they receive for having to work on a public holiday, whether by way of a penalty rate under an award or under a contract of employment, will never be enough to compensate them for the time off they do not get to have.

127   I am not prepared to criticise the applicant for making the application. The applicant has a difficult job, that involves interruptions to his days off on public holidays. I accept the applicant made the application in circumstances where, he had for some time, received payment for both a paid day off on a public holiday and double time and half on top, for each hour he was required to go into work on a public holiday. Having lost the benefit of this dual payment, I accept the applicant made the application for some greater clarity on what he is entitled to receive under his contract for work on public holidays.

128   However, for all the reasons outlined in the preceding paragraphs, I do not consider the applicant’s contract gives rise to an entitlement to be paid for both. The applicant is entitled to receive either a paid day off on the public holiday at ordinary time rates for those hours he would have been rostered to work or payment at the rate of double time and half for each hour he works on public holiday.

129   Accordingly, I find that the applicant was not denied a contractual benefit on the two dates he worked on a public holiday; 3 June 2019 and 28 December 2021 and that he was paid correctly in accordance with his contract of employment. I therefore dismiss the application.