Appeal against a decision of the Commission in Matter No. APPL 36 of 2014 given on 22 April 2015

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

FULL BENCH

CITATION : 2015 WAIRC 00797

DELIVERED : Wednesday, 12 August 2015

FILE NO. : FBA 3 OF 2015

Appellant

AND

Public Transport Authority of Western Australia

Respondent

ON APPEAL FROM:

Jurisdiction : Western Australian Industrial Relations Commission

Coram : Commissioner S J Kenner

Citation : [2015] WAIRC 00329; (2015) 95 WAIG 548

File No : APPL 36 of 2014

CatchWords : Industrial Law (WA) - Appeal against a decision of a single Commissioner - Entitlements of rail car drivers to credit hours in a fortnightly cycle when taking a week of annual leave - Interpretation of industrial agreement - Principles of construction considered - New point raised by appellant - Point allowed

Legislation : Industrial Relations Act 1979 (WA) s 46, s 49

Minimum Conditions of Employment Act 1993 (WA) s 5, s 23

Result : Appeal upheld, decision varied

Representation:

Appellant : Mr C Fogliani (of counsel) and with him Mr K Singh

Respondent : Mr R Andretich (of counsel)

Solicitors:

Appellant : W G McNally Jones Staff Lawyers

Respondent : State Solicitor for Western Australia

Case(s) referred to in reasons:

Alfresco Concepts Pty Ltd v Franse [2015] WAIRC 00244; (2015) 95 WAIG 437

Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99

Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1

Director General, Department of Education v United Voice WA [2013] WASCA 287; (2014) 94 WAIG 1

Gattellaro v Westpac Banking Corporation [2004] HCA 6; (2004) 204 ALR 258; (2004) 78 ALJR 394

H v Minister for Immigration and Multicultural Affairs [2000] FCA 1348

Health Services Union of Western Australia (Union of Workers) v The Director General of Health [2012] WAIRC 01117; (2013) 93 WAIG 1

Minister for Education v Liquor Hospitality and Miscellaneous Union, Western Australian Branch [2011] WAIRC 00818; (2011) 91 WAIG 1839

Re Harrison; Ex parte Hames [2015] WASC 247

Roberts v Bass [2002] HCA 57; (2002) 212 CLR 1; (2002) 194 ALR 161; (2002) 77 ALJR 292

University of Wollongong v Metwally [No 2] [1985] HCA 28; (1985) 60 ALR 68; (1985) 59 ALJR 481

Case(s) also cited:

Health Services Union of Western Australia (Union of Workers) v The Director General of Health [2012] WAIRC 01117; (2012) 93 WAIG 1

Kucks v CSR Ltd (1996) 66 IR 182

Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165

Transport Workers' Union of Australia, New South Wales Branch v Toll Transport Pty Ltd [2006] NSWIRComm 123

Reasons for Decision

SMITH AP AND SCOTT ASC:

Introduction

1         This is an appeal before the Full Bench instituted pursuant to s 49 of the Industrial Relations Act 1979 (WA) (the Act).  The appeal arises out of a declaration made on 22 April 2015:  [2015] WAIRC 00329; (2015) 95 WAIG 548.

2         The declaration was made in determination of APPL 36 of 2014 which was an application by The Australian Rail, Tram and Bus Industry Union of Employees, West Australian Branch (the union) made pursuant to s 46 of the Act seeking the true interpretation of cl 3.1.1, cl 3.1.2 and cl 6.7 of the Public Transport Authority (Transperth Train Operations Rail Car Drivers) Industrial Agreement 2013, Agreement No. AG 18 of 2013 (the agreement).

3         The facts giving rise to the application are set out in the schedule to the application as follows (AB 6):

3.1.1 The Rostering Anomalies related to the practices ('the Practices') adopted by the Public Transport Authority of Western Australia ('the Authority') in the rostering and payment of rail car drivers when they took a week's annual leave in a fortnightly cycle.

3.1.2 The Practices resulted in rail car drivers being:

3.1.2.1 Rostered to work for 42 hours in the second week in a fortnightly cycle after taking a week's annual leave in the preceding week; and

3.1.2.2 Paid for 78 hours at their base rate of pay with two hours being accumulated towards credit days.

4         The application set out nine questions that the union sought to be answered by the Commission.  These are as follows (AB 7 - 8):

4.1 Are rail car drivers employed on a 76 hour per fortnight basis?

4.2 Do 76 hours per fortnight represent a rail car driver's ordinary hours?

4.3 Do 76 hours per fortnight represent a rail car driver's ordinary hours for the purposes of section 9A(l)(a)(i) of the Minimum Conditions of Employment Act 1993 (WA)?

4.4 Do rail car drivers, who are regular day shift employees, accrue four weeks' annual leave (with reference to their ordinary hours)?

4.5 Do rail car drivers, who are seven day shift employees, accrue five weeks' annual leave (with reference to their ordinary hours)?

4.6 When a rail car driver takes a week of annual leave, should 38 hours be deduced [sic] from their leave balance?

4.7 When a rail car driver takes a week of annual leave in a fortnightly cycle, are they only required to work 38 hours in the following week to make up their ordinary hours?

4.8 When a rail car driver takes a week of annual leave in a fortnightly cycle, can they only accumulate a maximum of two hours towards credit days in the following week?

4.9 When a rail car driver takes a week of annual leave in a fortnightly cycle, is any rostered time above 40 hours in the following week rostered overtime?

5         In the proceedings before the Commission at first instance, at the heart of the matter was a claim by the union on behalf of employees covered by the agreement that when an employee takes a week of annual leave and works 42 hours in the other week of a fortnightly cycle of work, the employee is entitled to be paid two hours' pay at overtime rates.

6         At the hearing at first instance, the parties were in agreement that each of the questions in 4.1 to 4.6 and 4.8 should be answered 'Yes'.  The parties were in dispute, however, as to the answers that should be given to questions 4.7 and 4.9.  The union contended that the answers to those two questions were 'Yes'.  The Public Transport Authority of Western Australia (the PTA) contended the answer to:

(a) Question 4.7 should be:

'No.  In order to comply with clause 3.1.1 of the Agreement 40 hours are required to be worked.'

(b) Question 4.9 should be:

'No.  Time above 42 hours attracts overtime rates.'

Relevant provisions of the agreement

7         Pursuant to cl 1.3.1 the agreement extends to and binds all employees who are engaged by the PTA as trainee rail car drivers, rail car drivers, driver trainers and driver coordinators in the Transperth Train Operations who are members of or eligible to be members of the union.

8         Clause 3.1. provides as follows:

3.1.1 The ordinary hours of full-time employment shall be seventy six (76) hours per fortnight, and shall consist of up to ten shifts which shall constitute a fortnight's work.

3.1.2 For the purposes of subclause 3.1 the seventy six (76) hour fortnight shall be worked in accordance with the following provisions:

(a) The Standard Hours of full-time employment in each fortnightly cycle will be 80 hours.

(b) Four hours in each fortnightly cycle will be accumulated towards Credit Days, which may be cleared in accordance with subclause 6.6 - Taking of Leave or be cashed out in accordance with subclause 6.5 - Cashing out of Leave Entitlements.

3.1.3 Rosters when first posted shall show four rostered days off in each fortnightly cycle.

3.1.4 A rostered day off as provided for in subclause 3.1.3 shall be either:

(a) 24 hours commencing 0001 hours to 2400 hours on the day designated as the rostered day off; or

(b) Where the preceding rostered shift ends between 0000 and 0400 hours, the day on which that shift ends, provided either that:

(i) there is a minimum period off duty of 32 hours between the end of that shift and the commencement of the next shift; or

(ii) the employee agrees to a shorter period of duty before the commencement of the next shift, for example to enable the employee to work an additional overtime shift or to permit a mutual roster change.

3.1.5 No rostered shift shall be less than five (5) hours for a Full Time Employee or less than three (3) hours for a Part Time Employee and no rostered shift shall be more than nine (9) hours.

3.1.6 The maximum number of consecutive shifts an employee may be required to work will be ten (10).

3.1.7 Subject to subclause 3.2.5, the posted roster may include rostered overtime for an employee of up to a maximum of five hours more than the 80 Standard Hours in a fortnightly cycle for the purposes of a Special Event or other exceptional circumstance.

9         'Ordinary Hours' is defined in cl 1.5.19 to mean the hours as defined in cl 3.1.1.  'Standard Hours' is defined in cl 1.5.28 to mean the hours as defined in cl 3.1.2, which are paid at base rates only and not at overtime rates.  'Credit day' is defined in cl 1.5.6 to mean an extra day off accumulating in accordance with cl 3.1.2(b) and taken or cashed out in accordance with cl 6.5 and cl 6.6 of the agreement.

10      Clause 2.4 provides than an employee engaged on a 76 hour fortnight basis is a full-time employee.  Pursuant to cl 3.1.5 full-time employees can be rostered for shifts of no less than five hours and no more than nine hours and pursuant to cl 3.1.6 the maximum number of consecutive shifts an employee may be required to work is 10.

11      Pursuant to cl 3.6.1 the PTA guarantees each full-time employee a full fortnight's work of at least 80 hours except during such period as by reason of any action on the part of any section of its employees or for any cause beyond the control of the PTA, it is unable wholly or partially to carry on the running of the trains.  This clause also provides that each fortnight stands by itself.

12      Clause 6.5 allows employees to request the cashing out of hours accumulated for clearance as credit days and pursuant to cl 6.6 employees can add to their annual leave uncleared accumulated credit days.  Further, pursuant to cl 6.6.17 employees are required to add at least five credit days to their annual leave each year or cash those days out.

13      Whilst hours of work are calculated as hours to be worked each fortnight the wage rates set out in cl 4 of the agreement are expressed as base rates of pay for each week of work.

The declaration made at first instance

14      After hearing the parties the learned Commissioner made a declaration in the following terms (AB 19 - 20):

(1) THAT railcar drivers are employed on a 76 hour per fortnight basis.

(2) THAT 76 hours per fortnight represents a railcar driver's ordinary hours.

(3) THAT railcar drivers, who are regular day shift employees accrue four weeks' annual leave (with reference to their ordinary hours).

(4) THAT railcar drivers who are seven day shift employees accrue five weeks' annual leave (with reference to their ordinary hours).

(5) THAT when a railcar driver takes a week of annual leave, 38 hours should be deduced [sic] from their leave balance.

(6) THAT when a railcar driver takes a week of annual leave in a fortnightly cycle, they are required to work 40 hours in the following week to make up their ordinary hours.

(7) THAT when a railcar driver takes a week of annual leave in a fortnightly cycle, they can only accumulate a maximum of two hours towards credit days in the following week.

(8) THAT when a railcar driver takes a week of annual leave in a fortnightly cycle, overtime will only apply after 42 hours are worked in the following week.

The issues raised in the hearing at first instance

15      The reason why the application was made by the union for a declaration as to the true interpretation of the agreement was because of a dispute that had arisen between the PTA and the union about the practice of the PTA to:

(a) pay an employee an additional two hours' pay when an employee had taken one week's annual leave in a fortnightly cycle and had worked 42 hours the other week of the fortnightly cycle; and

(b) credit two hours towards credit days.

16      It was not in issue in the proceedings at first instance whether an employee who worked this pattern of work in a fortnightly cycle should be paid two hours' pay in addition to the weekly base rate of pay.  The dispute was whether the two hours of pay at ordinary hours should be paid as overtime. 

17      Following the issuing of the declaration the union in its notice of appeal challenged paragraphs (6) and (7) of the declaration as follows (AB 2):

The Learned Commissioner made an error of law in the interpretation of the Agreement by declaring in the Decision that:

a) when a railcar driver takes a week of annual leave in a fortnightly cycle, they are required to work 40 hours in the following week to make up their ordinary hours; and,

b) when a railcar driver takes a week of annual leave in a fortnightly cycle, they can only accumulate a maximum of two hours towards credit days in the following week.

18      Thus, the union raised the new point whether an employee who works the pattern of work in question should only be credited with two hours towards credit days.

Should the union be allowed to raise a different case on appeal?

19      The union seeks to raise an entirely different argument as to the true construction of the hours of work provisions of the agreement.  In particular, paragraph (7) of the declaration which is now sought to be challenged in this appeal, was a proposition the union agreed to.  The union stated in its written submissions it filed in the proceedings at first instance that the following question should be answered 'Yes':

When a rail car driver takes a week of annual leave in a fortnightly cycle, can they only accumulate a maximum of two hours towards credit days in the following week?:  question 4.8

20      The reason for putting this question and answer to the Commission at first instance appears to be that the union did not take issue with the practice of the PTA paying the employees two hours' pay who worked 42 hours in a week of a fortnightly cycle after taking one week's annual leave.  However, the union claimed an employee who worked 42 hours and took a week's annual leave in a fortnightly cycle is entitled to be paid overtime rates of pay for two hours and not at base rates.  It concedes that the case before the Commission could have been ‘done better and that would have made the case for Commissioner Kenner a lot easier and probably less confusing’, that Commissioner Kenner ‘did what he did on the basis of the submissions that were made at first instance’.  The union says that what the Commission in its decision attempted to do was to align the agreement with practice rather than the other way around.

21      The union's position as to the true construction of the relevant provisions of the agreement has now shifted.  It not only concedes that the learned Commissioner correctly found that overtime does not apply until more than 80 hours are worked in a fortnightly cycle, but it says that where an employee takes a week of annual leave and works 42 hours in the other week of the fortnightly cycle they are not entitled to be paid for two hours of work at base rates for the pattern of work in that fortnightly cycle as four hours in that cycle should be credited towards credit days.  This construction is entirely different to the construction the union put to the Commission at first instance.

22      The PTA did not object to the union putting this construction to the Full Bench.  It simply argued the construction put by the union at first instance and on appeal is wrong.

23      The general principle is that save in exceptional cases a party is usually bound by its case put at first instance:  University of Wollongong v Metwally [No 2] [1985] HCA 28; (1985) 60 ALR 68, 71; (1985) 59 ALJR 481, 483; Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1 (see the recent discussion of this principle in Alfresco Concepts Pty Ltd v Franse [2015] WAIRC 00244; (2015) 95 WAIG 437 [114] - [116]).  The application of this principle usually arises in proceedings where a decision at first instance turns on questions of fact or fact and law.

24      In Minister for Education v Liquor Hospitality and Miscellaneous Union, Western Australian Branch [2011] WAIRC 00818; (2011) 91 WAIG 1839 the Acting President observed, after having regard to the observations of Branson and Katz JJ in H v Minister for Immigration and Multicultural Affairs [2000] FCA 1348 [7] - [9], that:

[T]he following principles guide when a finding could be made that it is expedient and in the interests of justice to entertain a point:

(a) The point must be one of construction or of law and not be met by calling evidence.

(b) In deciding whether or not a point was raised at trial no narrow or technical view should be taken. Ordinarily the pleadings will be of assistance.

(c) In very exceptional cases an omission to put a case formulated on appeal may not be conclusive. The opportunity to assert the new case should be granted only where the interests of justice require it and such a course can be taken without prejudice to the defendant.

(d) Consideration of the interests of justice should extend to a consideration of relevant matters beyond the interests of the parties to the interests of other litigants and efficient case management.

(e) When assessing the interests of justice, the merit of the new point sought to be raised is a relevant consideration [26].

25      In this matter, the determination of the application at first instance and the issues raised in this appeal turn on a matter of law only; that is, a declaration of the true construction of a statutory instrument.  The application before the Commission does not depend upon any exercise of discretion by the Commission in relation to any facts.  The facts and reasons why a dispute arose which caused the union to make the application for interpretation of the agreement are immaterial to determination of the application.

26      It is well established that by their conduct in proceedings, parties cannot oblige a court to misapply the law:  Gattellaro v Westpac Banking Corporation [2004] HCA 6 [93]; (2004) 204 ALR 258; (2004) 78 ALJR 394 (Kirby J); Roberts v Bass [2002] HCA 57; (2002) 212 CLR 1; (2002) 194 ALR 161; (2002) 77 ALJR 292 [143] (Kirby J).

27      In our opinion, the construction which is now sought to be raised in this appeal by the union has considerable force.

28      In this matter we are satisfied that it is expedient and in the interests of justice to entertain this new point.  This is an exceptional case where the interests of justice require it and there is no suggestion of prejudice to the PTA.  On the contrary, it is important that the application of the agreement be correct as it has a direct effect on the calculation of the entitlements of the employees.

29      In these circumstances, it is in the public interest to allow the union to raise the new point.

The issues raised by the union in this appeal

30      It is now not disputed by the union that when a rail car driver takes a week of annual leave in a fortnightly cycle, overtime will only apply after 42 hours are worked in the following week.  However, the union says that a rail car driver who works 42 hours in a week of a fortnightly cycle after a week of annual leave should not be paid an additional two hours of pay but should be credited four hours towards a credit day.  As set out above this was not an argument raised at first instance.

31      The union now says the true interpretation of the relevant provisions of the agreement, in particular cl 3.1, is that when a rail car driver takes a week of annual leave in a fortnightly cycle, they are required to work 38 hours in the following week to make up 'Ordinary Hours', but to make up standard hours they must work 42 hours and accumulate four hours towards credit days.

The PTA's submissions

32      The PTA points out the issue raised for consideration in the appeal is the treatment that is required to be accorded to annual leave taken during a fortnightly cycle, in particular its effect on the accrual of credit days off and the number of hours that an employee can be rostered for during the balance of a fortnightly cycle where it contains a period of annual leave.

33      It points out that pursuant to cl 6.7.1(a) regular day shift employees accrue 'four (4) consecutive weeks' of annual leave to be paid 'at the employee's base rate of wage'.  Further, that cl 6.7.2(a) provides other shift employees are entitled to an additional week of leave 'on full pay'.  It also points out that cl 4.1 contains the base rates of pay expressed as the amount payable per week for a full-time employee in relation to the classification specified.  However, it contends that the amount payable for 38 hours per week worked in accordance with cl 3.1 is the base rate of pay:  cl 1.5.16.  For reasons that follow this contention is not entirely correct.

34      It says having regard to cl 3.1.1 and cl 6.7.1, the accrual of and the taking of annual leave can only be at the rate of 38 hours per week.  This is confirmed by cl 6.1.3 which provides where a public holiday falls on a rostered day off, the employee will receive 7.6 hours' additional pay or 7.6 hours which may be taken in accordance with cl 6.6 as an additional period of annual leave. 

35      The PTA argues that the declaration made by the Commissioner as to the true interpretation of the agreement is correct as it maintains the integrity of the 38 hour working week while recognising that up to 80 standard hours will be worked in any fortnightly cycle before overtime rates are attracted.

36      In support of this argument the PTA contends that if an employee takes one week of annual leave in the fortnightly cycle of 80 standard hours the terms of the agreement requires the employee to be paid as if the conditions required to be satisfied at work are satisfied during the period taken as annual leave.  These are:

(a) during the week of annual leave all of the requirements of cl 3.1.1 are satisfied so that there is no need to accrue two hours of that week towards credit days off to satisfy cl 3.1.1;

(b) the employee is to be treated as if he or she worked 38 hours during the week of annual leave;

(c) for the week not taken as annual leave, the employee is required to work a minimum of 40 hours in accordance with cl 3.1.1 so that two hours of work accrue towards credit days off; and

(d) the employee is able to be rostered for up to 42 hours in the week they are not on annual leave before overtime rates are attracted.

Principles of construction of industrial instruments

37      In Director General, Department of Education v United Voice WA [2013] WASCA 287; (2014) 94 WAIG 1 Pullin J, with whom Le Miere J agreed, briefly set out some of the principles that apply to the interpretation of industrial agreements.  These are the principles that apply to interpretation of contracts.  At [18] - [19] Pullin J stated:

The Agreement has to be construed to determine what the intention of the parties was at the time the Agreement was entered into. This has to be determined by ascertaining what a reasonable person would have understood the words of the Agreement to mean taking into account the text, the surrounding circumstances known to the parties and the purpose and object of the transaction: Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 [40]; Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 [22].

Surrounding circumstances may only be taken into account if the ordinary meaning of the words used by the parties is ambiguous or susceptible of more than one meaning: Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337, 352; McCourt v Cranston [2012] WASCA 60 [23].

38      Justice Buss in Director General, Department of Education v United Voice WA considered other principles that also apply to the construction of industrial instruments.  He observed at [81] - [83]:

The construction of an industrial agreement involves ascertaining what a reasonable person would have understood the parties to the agreement to mean. The language of the agreement should be understood in the light of its industrial context and purpose. See Amcor Ltd v Construction, Forestry, Mining and Energy Union [2005] HCA 10; (2005) 222 CLR 241 [2] (Gleeson CJ & McHugh J).

In Kucks v CSR Ltd (1996) 66 IR 182, Madgwick J observed:

It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand (184). (emphasis added)

See also City of Wanneroo v Holmes (1989) 30 IR 362, 378 - 379 (French J); Amcor [96] (Kirby J), [129] - [130] (Callinan J).

The words of a clause in a written agreement are to be given the most appropriate meaning which they can legitimately bear. A court must have regard to all of the provisions of the agreement with a view to achieving harmony among them. See Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99, 109 - 110 (Gibbs J). These propositions are applicable to instruments generally, subject to any particular rules of construction which have been developed in relation to a particular kind of provision or instrument.

39      These principles were applied by Smith AP and Beech CC (with whom Harrison C agreed) in Health Services Union of Western Australia (Union of Workers) v The Director General of Health [2012] WAIRC 01117; (2013) 93 WAIG 1 [36] - [42] and more recently by Beech J in Re Harrison; Ex parte Hames [2015] WASC 247 [50] - [52].  As Beech J pointed out in Re Harrison the starting point of construction is the text and the need to avoid a narrow or pedantic approach does not detract from the fact that construction is a text-based activity [53].

40      It is also an important principle of construction that when considering the whole of an instrument, not only may the meaning in one part be revealed in another but the words of every clause must if possible be construed so as to render them all harmonious one with another:  Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99, 109 (Gibbs J).

The merits of the appeal

41      In our opinion, no ambiguity in the meaning of the provisions of the agreement sought to be interpreted in the agreement arises.  Thus, it is not necessary to have regard to the circumstances that surrounded the making of the terms of the agreement.

42      In our opinion, the learned Commissioner who heard this matter erred in his interpretation of the agreement.  Unfortunately, he was led into error by the union's argument, in particular its failure to question whether the practice of the PTA to pay an additional two hours' pay to its employees when they worked 42 hours in a week following a week of annual leave in a fortnightly cycle is authorised by the terms of the agreement.  This failure in our view led to a construction of the agreement, that took account of this practice which when the terms of the whole of the agreement are considered, that does not accord with a true construction of the terms of the agreement.

43      The starting point in the analysis of the construction of the agreement is an analysis of the hours of work to be credited in a fortnightly cycle when an employee takes a week of annual leave in a fortnightly cycle of work.  As the learned Commissioner points out in his reasons for decision, when an employee takes a week of annual leave in a fortnightly cycle, the hours worked for the purposes of cl 3.1 is 38.  Pursuant to s 5 and s 23 of the Minimum Conditions of Employment Act 1993 (WA) (the MCE Act), the minimum entitlement to annual leave implied in all industrial agreements, awards and contracts of employment is 152 hours a year calculated pro-rata on a weekly basis.

44      Section 5 of the MCE Act provides:

(1) The minimum conditions of employment extend to and bind all employees and employers and are taken to be implied —

[(a) deleted]

(aa) in any employer‑employee agreement; or

(b) in any award; or

(c) if a contract of employment is not governed by an employer‑employee agreement or an award, in that contract.

(2) A provision in, or condition of, an employer‑employee agreement, an award or a contract of employment that is less favourable to the employee than a minimum condition of employment has no effect.

(3) A provision in, or condition of, an agreement or arrangement that purports to exclude the operation of this Act has no effect, but without prejudice to other provisions or conditions of the agreement or arrangement.

(4) A purported waiver of a right under this Act has no effect.

(5) This section has effect subject to sections 8 and 9(1).

45      Section 23 of the MCE Act provides:

(1) An employee, other than a casual employee, is entitled for each year of service, to paid annual leave for the number of hours the employee is required ordinarily to work in a 4 week period during that year, up to 152 hours.

(2) An entitlement under subsection (1) accrues pro rata on a weekly basis.

(2a) Entitlements under subsection (1) are cumulative.

(3) In subsection (1), year does not include any period of unpaid leave.

(4) Subsection (1) does not apply to an employee of a class prescribed by the regulations.

46      Clause 6.7.1(a) of the agreement provides that a day shift employee is entitled to four weeks' annual leave.  Seven day shift employees are entitled to an extra week's leave:  cl 6.7.2(a).  From these provisions of the agreement and s 5 and s 23 of the MCE Act it is clear that when an employee takes a week's leave in a fortnightly cycle they are to be regarded to have 'worked' 38 hours in that week of that cycle for the purposes of cl 3.1 of the agreement.

47      It is not correct when an employee takes a week of annual leave that they are required to work 40 hours in the other week of the fortnightly cycle to make up their ordinary hours, as that would mean that the employee's ordinary hours in that fortnightly cycle is 78.  Ordinary hours in a fortnightly cycle are 76 and standard hours are 80.

48      When pressed in light of the issues that the union seeks to raise in this appeal it was conceded on behalf of the union that the question posed by the union in its question 4.7 would be more properly put as follows:

When a rail car driver takes a week of annual leave in a fortnightly cycle, what total number of hours in the following week are they required to work to make up their standard hours?

49      The union correctly says that the answer to this question is 42.

50      When regard is had to the whole of the terms of the agreement it is clear that:

(a) Wages are calculated as a weekly rate of pay: cl 4.1

(b) 'Hours of full-time work' are calculated on a fortnightly basis and not a weekly basis.  Thus, within a fortnightly cycle the hours worked in any one shift can vary, so too can the hours worked in any week in the cycle.  For example, pursuant to cl 3.1.5 and cl 3.1.6 an employee could work five shifts of nine hours in the first week of the fortnightly cycle (being a total of 45 hours) and one five hour shift, two nine hour shifts and two six hour shifts in the second week of the cycle (being a total of 35 hours worked in the second week of the cycle).  In total, an employee who worked these shifts in the fortnightly cycle would work 80 hours.  Whether an employee would be rostered to work such shifts would depend upon the operational requirements of the PTA.

(c) The 76 ordinary hours and four credit hours together are classified as standard hours and total 80 hours each fortnight:  cl 3.1 and cl 3.2.5(e)(i).  Thus, standard hours comprise both ordinary hours and credit hours.  Any hours worked in excess of standard hours (80 hours a fortnight) in each cycle attract a payment of overtime:  cl 3.3.2.

(d) Each fortnight stands by itself:  cl 3.6.

(e) Standard hours of full-time work worked each fortnightly cycle are classified in cl 3.1 of the agreement as comprising two distinct categories which have attached different conditions.  These are:

(i) 76 ordinary hours;

(other than an entitlement to a weekly base rate of pay, as part of an entitlement to payment of standard hours no other conditions of remuneration attach to the working of ordinary hours); and

(ii) four credit hours;

(pursuant to cl 3.1.2(b) credit hours are accumulated towards credit days, which can be taken as days off:  cl 6.5.1(c)), or at least five credit days a year are required to be taken with annual leave:  cl 6.6.17 and cl 6.6.18.  Up to 64 hours a year can be 'cashed out' (paid out):  cl 6.5.1 and cl 6.5.3.)

51      The error in the PTA's construction of the agreement appears to rely upon a premise that the 38 hours taken as worked when an employee takes a week of annual leave is to stand alone from the remaining week in the fortnightly cycle.  This contention is contrary to the effect of cl 3.6.1 which provides that each fortnight stands alone.

52      The PTA's construction also relies upon the premise that the base rate of pay for a full-time employee is paid for a 38 hour week.  This contention is not correct.  'Standard Hours' in cl 1.5.28 is defined to mean the 80 hours as defined in cl 3.1.2 worked in each fortnightly cycle which are paid at base rates.  Thus, the base rate of pay, whilst expressed as a weekly rate of pay, is two weeks' base pay for an 80 hour fortnightly cycle (standard hours), and not one week of base pay for a 38 hour week or two weeks' pay for 76 hours a fortnight (ordinary hours).

53      An employee who takes a week of annual leave in a fortnightly cycle and who then works 42 hours in the other week of the cycle (being a total of 80 hours in the cycle) is not entitled to be paid two hours extra pay paid at base rates as cl 3.1.2 requires that they accrue four hours towards credit days in the cycle.  Further, there is no provision in the agreement that provides for payment of 42 hours' pay at base rates and crediting of two hours towards credit days in a fortnightly cycle of 80 hours.

54      For these reasons, we are of the opinion that the grounds of appeal have been made out and that an order should be made in the following terms by the Full Bench:

(a) The appeal be upheld.

(b) The decision be varied by deleting paragraph (6) and paragraph (7) of the decision and substituting:

(6) THAT when a railcar driver takes a week of annual leave in a fortnightly cycle, to accrue four credit hours towards credit days in that fortnightly cycle they must work 42 hours in the other week to make up their standard hours of 80 hours of full-time employment.

(7) THAT a railcar driver who works the pattern of work in paragraph (6) is not entitled to be paid two hours of pay at base rates, in addition to the rate of pay specified in cl 4.1 of the agreement, for work in that fortnightly cycle.

HARRISON C

55      I have had the benefit of reading the reasons for decision of her Honour, the Acting President and the Acting Senior Commissioner.  I agree with those reasons and have nothing to add.