Construction, Forestry, Maritime, Mining and Energy Union v Hay Point Services [2019] FCA 2145 (19 December 2019)

Last Updated: 19 December 2019

FEDERAL COURT OF AUSTRALIA

Construction, Forestry, Maritime, Mining and Energy Union v Hay Point Services [2019] FCA 2145

ORDERS

THE COURT ORDERS THAT:

1. The name of the Applicant be amended to be “Construction, Forestry, Maritime, Mining and Energy Union”.
2. The Respondent contravened section 50 of the Fair Work Act 2009 (Cth) by requiring its employees, who were covered by the Hay Point Services Enterprise Agreement 2013 (the Agreement), to work 455 overtime hours per annum from 16 July 2016 until the Agreement ceased to operate on 5 June 2017, in contravention of clause 34.1 of the Agreement.
3. The matter be listed for further case management at 9.30am on 4 February 2020.

REASONS FOR JUDGMENT

COLLIER J:

1. The background of this matter was set out in an earlier related judgment delivered on 28 March 2018 where the applicant union, the Construction, Forestry, Maritime, Mining and Energy Union (the union), sought declarations of contravention, together with pecuniary penalties against the respondent, Hay Point Services Pty Ltd (HPS) pursuant to s 50 of the Fair Work Act 2009 (Cth) (the FW Act): see Construction, Forestry, Mining and Energy Union v Hay Point Services [2018] FCA 417.
2. I adopt the brief summary of the background as set out at [8] to [12] in that earlier related decision:

[8] HPS employs persons at its business operating at the Hay Point Coal Terminal (HPCT) in Queensland. Prior to May 2016, HPS’s employees worked a roster described as the “five panel roster”, which involved crews working over five different shifts. Crews were required to work two days, followed by two nights, followed by a six day break.

[9] Under the five panel roster, HPS’s employees were required to work 35 ordinary hours per week.

[10] In May 2016, HPS decided to change its rostering arrangements from a “five panel roster” to a “four panel roster”, referred to as the “New Roster”. The New Roster commenced at HPCT on 16 July 2016. Under the New Roster, crews worked over four shifts and the employees were required to work as follows:

two consecutive day shifts, followed by two consecutive night shifts, followed by a five-day break; then

two consecutive night shifts, followed by three consecutive night shifts, followed by a four-day break; then

three consecutive day shifts followed by two consecutive night shifts, followed by a five-day break.

[11] According to the CFMEU, the New Roster required employees to work 35 ordinary hours per week, with 8.75 hours of rostered overtime per week, meaning the New Roster required employees to work 455 hours of overtime per year.

[12] HPS does not take issue with the CFMEU’s calculation of overtime hours, but noted that employees were also entitled to six weeks’ annual leave. HPS claims that the effect of employees actually taking that annual leave, assuming that they did so, would be that their overtime hours would be 402.5 hours per year.

3. In short, the matter relates to the interpretation of cl 34.1 of the Hay Point Services Pty Ltd Enterprise Agreement 2013 (the 2013 Enterprise Agreement), an enterprise agreement made and approved pursuant to the provisions of Pt 2-4 of the Fair Work Act 2009 (Cth) (the FW Act). Section 50 of the FW Act provides that “[a] person must not contravene a term of an enterprise agreement”. The 2013 Enterprise Agreement is an “enterprise agreement” within the meaning of s 50 of the FW Act.
4. Clause 34.1 of the 2013 Enterprise Agreement provides as follows:

34.1 Reasonable Overtime

HPS may require an employee to work reasonable overtime and the employee shall work such overtime as required.

5. The union alleged that, by implementing a new work roster requiring employees to work 455 hours of overtime per year (or 8.75 hours of overtime per week), HPS was in contravention of cl 34.1 of the 2013 Enterprise Agreement.
6. It is not controversial that the new work roster required employees to work 455 hours of overtime per annum (although HPS submitted that the total overtime hours per annum employees were actually required to work were 402.5 hours, on the basis that employees were entitled to 6 weeks annual leave).
7. It is helpful to set out other relevant clauses of the 2013 Enterprise Agreement, namely:
   • Clause 6.1 deals with types of employment and provides that full-time employees “are engaged for a maximum of thirty-five (35) ordinary hours per week averaged over the work cycle of the area concerned”.
   • Clause 13.1 deals with ordinary hours of work, relevantly providing:

13.1 Ordinary Hours

(a) Ordinary hours of work for employees subject to this Agreement will be worked in accordance with defined shift arrangements.

(b) The shift arrangements operating under this Agreement provide for hours of work up to a maximum of 35 ordinary hours per week, to be averaged over a five (5) week cycle.

(c) Any change to ordinary hours of work and shift arrangements will be implemented in accordance with Clause 13.2 of the Agreement.

• Clause 5 defines “reasonable overtime” as:

“Reasonable Overtime” — for the purposes of this Agreement 104 hours overtime in a year is generally considered reasonable. This does not infer that 104 hours will be available to every employee, nor does it infer that each employee must work 104 hours of overtime.

8. In my earlier related decision, I was not satisfied that cl 34.1 was a provision able to be contravened for the purposes of founding a breach of s 50 of the FW Act. On this basis, it was not necessary to consider the second and third issues in the substantive proceedings, namely:
   • The proper construction of the term “reasonable overtime” as used in cl 34.1; and
   • Whether the overtime hours that HPS required its employees to work were “reasonable overtime” in accordance with the proper construction of the Agreement or constituted a contravention of cl 34.1 of the 2013 Enterprise Agreement and, therefore, s 50 of the Act.
9. The union appealed to the Full Court in relation to the construction of cl 34.1, also seeking a determination as to whether the requirement of HPS that its employees work 455 hours of overtime per year constituted the requiring of overtime which was not reasonable, and in contravention of cl 34.1.
10. The Full Court found that cl 34.1 does not solely provide for an entitlement to HPS, but is also protective of the interests of employees. The limitation in the clause which qualifies its permissive character is provided by the word “reasonable”. The Full Court found that the clause imposes a negative or restrictive stipulation that HPS may only require reasonable overtime. Any failure to comply with that stipulation will constitute a contravention of cl 34.1 and thus, a contravention of s 50 of the FW Act.
11. Before the Full Court, HPS contended that the protection conferred on employees by the word “reasonable” did not operate upon what HPS could require, but rather upon the obligation imposed by the clause on the employee by limiting the extent of that obligation to the performance of reasonable overtime.
12. In Construction, Forestry, Maritime, Mining and Energy Union v Hay Point Services Pty Ltd [2018] FCAFC 182, the Full Court said at [16]:

That approach is inconsistent with both the text and structure of the clause. The subject of the first part of cl 34.1 is what HPS “may require” of an employee. The subject of the second part of the clause is the obligation imposed on the employee to work. The limitation or restriction imposed by the word “reasonable” is found in the first part of the clause and qualifies or conditions what HPS “may require”. That restriction will have a consequential effect on the obligation imposed on the employee, but that does not justify disconnecting the qualification made from the subject matter that it conditions. That subject is what HPS “may require”. The restriction operates directly upon HPS and imposes upon it a limitation with which it must comply. The structure and text of cl 34.1 do not support the approach to construction for which HPS contended.

13. Further, at [20] and [21], their Honours said:

[20] It ought also be presumed that cl 34.1 was intended to be effective and produce a sensible industrial outcome. In that respect, and consistently with the purpose of s 62(1) of the FW Act, the purpose of the clause must be recognised to include the purpose of protecting employees from being compelled to perform unreasonable overtime. If it was the case that the limitation or restriction in cl 34.1 only conditioned the obligation on the employee to perform work, HPS would have no obligation to make an assessment about the reasonableness of its requirement for additional work and the effectiveness of the clause would be largely dependent upon the willingness of employees to refuse to comply with unreasonable requirements made by the employer. Construing cl 34.1 as imposing no burden upon HPS and imposing the burden of refusing unreasonable requirements to perform additional work on the employee does not produce a sensible industrial outcome, especially in circumstances where such a refusal may be perceived by the employee as jeopardising or likely to prejudicially affect the employee’s employment.

[21] For those reasons, we have concluded that cl 34.1 is a term that may be contravened by HPS within the meaning of s 50 of the FW Act.

14. The matter was remitted to this Court by order of the Full Court, for further determination of the live issues (namely the second and third issues in the substantive hearing).
15. The questions to be decided now involve the proper construction of the term “reasonable overtime” as in cl 34.1, and whether the overtime that HPS required its employees to work pursuant to the new work roster constituted a contravention of cl 34.1 of the 2013 Enterprise Agreement, so as to contravene s 50 of the FW Act.
16. The parties came before me on 8 March 2019 for oral argument relating to these issues. I will now consider each remaining issue in turn.

THE PROPER CONSTRUCTION OF CLAUSE 34.1 OF THE 2013 ENTERPRISE AGREEMENT

The union’s construction of cl 34.1

17. In its submissions the union looked to cl 5 and the definition of “reasonable overtime” to inform the notion of what is reasonable. The union advanced the argument that, on the ordinary meaning, the words used in cl 5 established a benchmark or standard of 104 overtime hours as reasonable overtime. These words are:

For the purposes of this Agreement 104 hours overtime in a year is generally considered reasonable. This does not infer that 104 hours will be available to every employee, nor does it infer that each employee must work 104 hours of overtime.

18. In respect of this clause, the union contended:
    • The word ‘generally’ is defined by the Shorter Oxford English Dictionary, Sixth Edition as: ‘without reference to particulars or individuals’ and the word ‘considered’ as ‘to give mental attention to; think over’.
    • The word ‘reasonable’ is relevantly defined by the Shorter Oxford English Dictionary, Sixth Edition as ‘within the limits of reason; not greatly less or more than might be thought likely or appropriate’.
    • Giving the words contained in the phrase ‘generally considered reasonable’ their ordinary meaning, and read consistent with the above definitions, the expression ‘generally considered reasonable’ in clause 5 should be understood as explaining that the parties think that reasonable overtime is to be not greatly less or more than 104 hours in a year.
19. The union argued that the question of what is reasonable overtime could not be considered in isolation from the maximum ordinary hours, being 35 hours per week: cl 13.1(b) of the 2013 Enterprise Agreement.
20. With reference to their pleaded case, the union did not allege that only 104 hours overtime may be required by HPS, but rather that 455 hours per annum was not reasonable because those hours amounted to a 435% increase on the 104 hours referred to in cl 5.
21. Further, the union contended that the ordinary meaning of the words used in clauses 5 and 34.1 was reinforced by the history and context of the clauses. The union referred to the history of the 2013 Enterprise Agreement as set out at [14]-[16] and [18] of the earlier related decision.
22. The union submitted that, during the negotiations for the 2007 Enterprise Agreement, the union and HPS agreed that the factored overtime scheme would be negotiated away in exchange for a pay rise, resulting in the removal of the factored overtime scheme and a pay rise of approximately 4% per annum: see [22] of the affidavit of Barry Spillman dated 20 December 2016. Those who wanted to stay on the scheme could do so, however no new employees could take part in the scheme.
23. The union submitted that, as a result of these negotiations, the parties agreed to insert a clause providing for the definition of reasonable overtime, because HPS retained the ability to direct reasonable overtime (outside of a factored overtime scheme). This clause was cl 5 of the 2013 Enterprise Agreement. On this basis, the union argued that cl 5 of the 2007 Enterprise Agreement and its evident purpose informed the meaning of the 2013 Enterprise Agreement.
24. The union reiterated that where the 2013 Enterprise Agreement defined what was reasonable, if the hours required by HPS did not answer that description of reasonable, the requirement contravened cl 34.1. It further argued that to negotiate a central element of the work-wages bargain stating what was reasonable but leaving the question of what was unreasonable completely unresolved, was nonsensical.

HPS’ construction of cl 34.1

25. In its submissions HPS referred to the industrial context, history and purpose of cl 34.1 in determining its construction, as set out in the earlier related decision at [8] to [21]. HPS noted that none of those findings appeared to be challenged.
26. HPS referred to the following relevant context:
    • The evidence at trial was that the Hay Point Coal Terminal (HPCT) is in continuous operation, 24 hours per day, 7 days per week. Approximately 75% of BHP Billiton Mitsubishi Alliance (BMA) coal is shipped from the HPCT, at the rate of 150,000 to 190,000 tonnes per day.
    • Before May 2016, HPS had a "five panel roster" for production workers in operation at the HPCT (the Old Roster). The Old Roster did not specify a number of overtime hours. Rather, in addition to the base hours recorded in the Old Roster, employees at HPCT performed un-rostered overtime as and when required. The distribution of un-rostered overtime ranged widely. HPS records show:
      • For the financial year ending 30 June 2014, the range was between 9.25 hours and 410 hours;
      • For the financial year ending 30 June 2015, the range was between 9 hours and 586 hours;
      • For the period 1 July 2015 to 16 July 2016 (the date of the change to the New Roster), the range was between 8 hours and 636.5 hours.
    • Under the New Roster, employees no longer work unevenly distributed, ad hoc, un-rostered overtime.
    • Under the Old Roster, training days form part of un-rostered overtime.
    • Under the New Roster, 40 hours of training are built into the roster annually.
    • Employees are entitled to 6 weeks' annual leave. Employees must not accrue more than two times their annual entitlement (12 weeks) without specific agreement from HPS. Accordingly, employees will each work 402.5 hours overtime per annum on average (for example, they might take 3 weeks' annual leave in one calendar year, but 9 weeks in the next calendar year).

• (Footnotes omitted.)

27. As to the definition of “reasonable overtime” in cl 5, HPS contended that this was facilitative, not prescriptive. In contrast with the union’s argument, HPS submitted that up to 104 hours of overtime would “generally” be considered reasonable, but the benchmark was reasonableness as opposed to how close the number of hours fell to the 104 hour mark.
28. HPS argued that the question of whether a particular requirement to work overtime was reasonable within the meaning of cl 34.1 was a question of fact.
29. HPS submitted that its construction accorded with the natural meaning of the word “reasonable”, fitting with the language of cl 34.1. It submitted that the clause referred to “an employee”, directing attention to the circumstances of each individual employee rather than a group of employees.
30. I note that, so far as concerns overtime being unreasonable with respect to each and every individual employee, the union submitted this contention was misconceived. If the overtime did not meet the description of reasonable overtime within the meaning of cl 34.1, as informed by cl 5, HPS contravened cl 34.1. The union submitted evidence of the circumstances of each employee is not required.
31. Further, HPS argued that the union’s construction was inconsistent with the context and evident industrial purpose of the statement as to “reasonable overtime” in cl 5 of the 2007 Enterprise Agreement. HPS pointed to [15] to [18] of the earlier related decision, where the history of the factored overtime scheme and operation of cl 34.1 within that scheme was discussed. This history, it was argued, showed that HPS always had the right to require employees to undertake reasonable overtime, without a “cap” on reasonable overtime hours.
32. HPS alleged that under the factored overtime scheme, as applied in 2007, HPS had pre-paid for the surety of a certain amount of overtime. It argued that the obligation to take factored overtime existed independently of the factored overtime scheme, and that obligation remained after the factored overtime scheme was phased out. The purpose was achieved by stipulating that employees are expected to undertake at least 104 hours of overtime per annum, as they had been on the factored overtime scheme. HPS interpreted the clause as allowing employees to depart from the general rule if they could demonstrate particular circumstances meaning 104 hours of overtime was not reasonable in their particular case. HPS alleged that this construction was fair and logical, and constituted a harmonious scheme in which every relevant provision of the 2013 Enterprise Agreement has work to do.
33. HPS submitted that the union’s construction provided that HPS gave up the certainty of 104 pre-paid hours of overtime and awarded an effective 4% pay rise to those employees, and submitted to the imposition of a cap or benchmark of overtime that never previously existed.
34. Further, HPS argued that the “definition” would not employ the words “generally”, “reasonable” and “considered” if the parties had intended to place a 104 hour cap on the amount of overtime that HPS could require.
35. The Oxford Dictionary of English (2^nd Edition revised) provides that “reasonable” as an adjective means:
    • (1) Having sound judgment; fair and sensible.
      • (a) Based on good sense.
      • (b) (archaic) able to reason logically.
    • (2) As much as is appropriate or fair; moderate.
      • (a) Fairly good; average.
      • (b) (of a price of product) not too expensive.
36. The Oxford Dictionary of English (2^nd Edition revised) provides that “generally” means:
    • (3) In most cases; usually.
    • (4) In general terms; without regard to particulars or exceptions.
    • (5) By or to most people; widely.
37. HPS argued that cl 34.1 could have simply said HPS “may not require an employee to work any more than 104 hours of overtime per year”, yet this was not the intent behind the clause.
38. HPS rejected the notion that 104 hours constituted a benchmark for reasonable overtime. It provided the example of 3 hours per week, or 156 hours annually, breaching cl 34.1 despite not exceeding “ordinary hours” as defined in s 62 of the FW Act.
39. HPS submitted that the argument that overtime hours set by the new work roster were unreasonable solely by reason of them being “greatly” higher than 104 hours should be rejected because:
    • It ran contrary to the authorities discussed at [34] to [38] above [of the respondent’s submissions] and contrary to this Court's findings at first instance;
    • The Full Court would not have remitted the proceedings to this Court unless it considered that reasonableness should be determined as a question of fact;
    • It was at odds with the union’s apparent acceptance of the proposition that the question of whether overtime is reasonable should be determined on the basis of “all the circumstances”; and
    • It was also at odds with the reality of the position prior to the introduction of the new work roster, in which many employees were working well over 104 hours overtime per annum, some employees were working well over 455 hours per annum overtime, and some were working far less than 104 overtime hours per annum.
40. HPS contended that the union’s construction should not be adopted, based on the fact there is no suggestion as to how greatly a number of required overtime hours should exceed 104 before contravening cl 34.1. In response, the union submitted this was irrelevant, noting the task for the Court was to determine whether in the context of this case, 455 hours of annual overtime in the new work roster contravened cl 34.1.
41. HPS also claimed that the union’s approach was flawed by its numerical comparison between overtime hours and ordinary hours. HPS submitted that a 43.75 hour working week, comprised of 35 ordinary hours and 8.75 overtime hours, was a feature of the roster contained in the 2017 Enterprise Agreement.
42. With regard to HPS’ reliance upon the contents of the 2017 Enterprise Agreement, the union submitted that the content of the 2017 Enterprise Agreement was irrelevant to the determination of the proper construction of the 2013 Enterprise Agreement, noting post-contractual conduct is not and can never be relevant to the proper construction of the parties’ bargain: see Shop Distributive and Allied Employees’ Association v Woolworths Ltd [2006] FCA 616; (2006) 151 FCR 513 at [31] per Gray J.

Consideration of cl 34.1

43. In summary, the constructions advanced by the parties are:
    • From the perspective of the union: the new work roster prescribes overtime substantially in excess of 104 hours per annum, and this new prescription was not reasonable, whereas;
    • From the perspective of HPS: clause 34.1 of the 2013 Enterprise Agreement, as informed by cl 5 of that Agreement, was facilitative and should be construed against a broader base of what was “reasonable”.
44. Recently, the Full Court in WorkPac Pty Ltd v Skene [2018] FCAFC 131 set out relevant principles referable to the interpretation of an enterprise agreement. At [197] in particular the Court observed:

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] FCA 369; (1989) 30 IR 362 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 Ltd v Construction, Forestry, Mining and Energy Union [2005] HCA 10; (2005) 222 CLR 241 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 Ltd [1996] IRCA 166; (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).

45. Overall, principles relating to the construction of enterprise agreements are well-settled and include:
    • A narrow approach to the instrument is misplaced: see Kucks v CSR Limited [1996] IRCA 166; (1996) 66 IR 182 at [184].
    • The drafters of the instrument were not lawyers and can be assumed to be more concerned with how the instrument would be understood at the workplace than with legal jargon and niceties: see Kucks v CSR Limited [1996] IRCA 166; (1996) 66 IR 182 at [184].
    • Clauses should be construed in light of the historical context and purpose of the clause: see Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at [517] per Burchett J and WorkPac Pty Ltd v Skene [2018] FCAFC 131 (2018) 280 IR 191 at [197].
    • The language of a particular agreement should be considered in the light of its industrial context: see Amcor Limited v Construction, Forestry, Mining and Energy Union [2005] HCA 10; (2005) 222 CLR 241 at [2] per Gleeson CJ and McHugh J.
    • Any expression must be read in its context. The circumstances of the origin and use of the clause are plainly relevant to an understanding of what is likely to have been intended by its use: see Short v FW Hercus Pty Ltd (1993) 40 FCR 511.
46. With reference to the concept of “reasonable overtime”, Dunphy J, with whom Morgan J agreed, observed in Metal Trades Employers’ Association v Boilermakers Society of Australia (1963) 4 FLR 333 that overtime:

[m]ust be considered in relation to the workers’ conditions and also in relation to the employer’s business, and there is no sanction for any union fixing, arbitrarily, a limit.

47. The FW Act mandates “ordinary hours” of up to 38 hours in a week, plus additional hours if they are “reasonable”: see s 62 of the FW Act. With reference to this section, the Full Federal Court held at [173] in Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2015] FCAFC 25; (2015) 230 FCR 298:

What is ‘reasonable’ is necessarily assessed on a case-by-case basis, by reference to the employee’s circumstances and the employer’s business in accordance with the terms of s 62(3) of the Act: cf Metal Trades Employers Association v Boilermakers Society of Australia (1960) [sic] 4 FLR 333 at [33] (Dunphy J, with whom Morgan J agreed).

48. The Australian Industrial Relations Commission made the following relevant observations in the Working Hours Case July 2002 (2002) 114 IR 390:

[73] We accept the ACTU's contention that there is a new model of working time arrangements. Using the statistical material available we accept that three distinct working time regimes can be identified:

(1) standard hours (between 35 and 44 hours a week);

(2) part-time hours (less than 35 hours a week); and

(3) extended hours (more than 44 hours a week).

...

[211] The ACTU, after referring to a number of cases relating to the number of hours of overtime that may or may not be reasonable, submitted:

(1) in summary, there are circumstances in which 44 to 45 total hours per week are seen to be reasonable. There are no cases which indicate that regular overtime giving rise to working weeks in excess of 48 hours per week is reasonable. There are cases which indicate that overtime giving rise to working weeks regularly in excess of 48 hours is unreasonable; and

(2) while the circumstances vary, it can be said that the borderline between reasonableness and unreasonableness exists somewhere between an overall working week of 44 and 48 hours. In any event the limit of reasonableness is less than the descriptions of extreme hours set out in subcl 3 of its claim.

49. The industrial context in which the 2013 Enterprise Agreement was made suggests that employees could and regularly did work more overtime than their designated factored overtime of 104 hours. In some limited circumstances, employees could elect to reduce their designated factored overtime to zero hours. However, employees could, and regularly did, work more overtime than their designated factored overtime.
50. It is not controversial that the concept of “reasonable overtime” was first inserted into the 2007 Enterprise Agreement, following the removal of factored overtime in lieu of a pay rise of 4%, corresponding to the calculated and agreed value of the factored overtime scheme to employees.
51. In relation to the 2007 Enterprise Agreement negotiations, I set out the following background in my earlier related decision:

[19] Evidence relating to the negotiations leading to the 2007 Enterprise Agreement is set out in the affidavit of Mr Barry Spillman filed 20 December 2016 (Exhibit 2(A)). Mr Spillman was employed by HPS for 21 years, and held union positions as Secretary from 1996 and Treasurer from 2001 of the Hay Point Lodge of the Queensland District Branch of the Mining and Energy Division of the CFMEU. Mr Spillman was present at the negotiations for the 1998, 2001, 2004, 2007, 2010 and 2013 Enterprise Agreements. Much of Mr Spillman’s evidence is uncontested.

[20] During the 2007 negotiations, HPS made it clear that it wanted to retain the ability to require employees to work reasonable overtime notwithstanding the phasing out of factored overtime. This was accepted by the CFMEU. At a meeting on 23 May 2007, Mr Philip Randall of HPS said words to the effect that HPS wanted some form of quantification of reasonable overtime in the enterprise agreement to achieve certainty. Mr Spillman suggested an average of two hours per week, or 104 hours per year, as that was the number of hours previously worked by employees under the factored overtime scheme. This definition of reasonable overtime by reference to 104 hours was accepted by the parties.

[21] During those negotiations, Mr Randall and other HPS representatives also stated that the definition in cl 5 did not guarantee that everyone would get 104 hours of overtime and Mr Spillman stated on behalf of the CFMEU that the workers did not want all employees to be required to work 104 hours overtime. In line with this, the cl 5 definition of “reasonable overtime” was inserted into the 2007 Enterprise Agreement in the same terms as the 2010 and 2013 Enterprise Agreements. Mr Spillman gave evidence that the definition of “reasonable overtime” was not discussed after the 2007 negotiations.

(Emphasis added.)

52. In my view the construction of cl 34.1 is relatively straight forward.
53. Clause 34.1 allowed HPS to require an employee to work reasonable overtime. Read with cl 5, 104 hours overtime in a year was generally considered reasonable, and there was no requirement that each employee must work 104 hours of overtime. The fact that the parties specifically agreed on the meaning of “reasonable overtime” for the purposes of the 2013 Enterprise Agreement was, in fact, a powerful indication that the amount of 104 hours overtime per annum was actually “reasonable” for the purposes of that agreement. I agree with the submissions of the union that cases concerning the phrase “reasonable overtime” decided without regard to this particular agreement are of minimal relevance, particularly when considered with the specific definition of “reasonable overtime” in cl 5. I also agree with the union that the approach of HPS completely ignores cl 5 of the 2013 Enterprise Agreement, and denudes it of any meaning.
54. While the history of industrial negotiations between the parties is relevant, the agreement as actually reached by the parties must ultimately reflect the outcomes of those negotiations and their intentions. There is nothing in the language of cl 34.1, or the 2013 Enterprise Agreement as a whole, which suggests any meaning of “reasonable” in the context of overtime other than that specifically set out in cl 5.
55. It follows that the proper construction of the term “reasonable overtime” as used in cl 34.1 is that defined in cl 5 of the 2013 Enterprise Agreement, namely 104 hours per annum.

WHETHER HPS CONTRAVENED CL 34.1 OF THE 2013 ENTERPRISE AGREEMENT BY INTRODUCING THE NEW WORK ROSTER

The union’s case in respect of the alleged contravention of cl 34.1

56. In relation to the question whether overtime required by HPS aligned with “reasonable overtime” permitted by cl 34.1, the union submitted that the imposition of 8.75 overtime hours per week in the new work roster was the equivalent of requiring an additional day per week in overtime hours, or 25% of weekly hours over and above the ordinary 35 hours in a week. The union submitted this was four times the 104 hour benchmark for “reasonable overtime” hours defined by cl 5 of the 2013 Enterprise Agreement, or 435% of those 104 hours.
57. As the new work roster required all employees to work 455 hours per annum overtime, on the union’s construction of cl 34.1 that was sufficient to establish a contravention.
58. Despite the substantial body of evidence before the Court concerning the introduction of the new work roster, the union contended that this evidence was neither individually nor cumulatively sufficient to support a conclusion that the new work roster answered the description of “reasonable overtime” in cl 34.1.
59. The union contended that the following factors were relevant to the determination whether contravention of cl 34.1 had occurred, namely:
    • There was no evidence to suggest that a four panel roster was an industry standard, rather contrarily, Mr Power gave evidence that he understood employees working at the Dalrymple Bay Coal Terminal were engaged on a five-panel roster.
    • There was no benefit to employees. The evidence established that there was a system for the allocation of overtime. The old system was voluntary, whereas the new work roster required every employee to work overtime equivalent to an additional day every week, regardless of their wishes. Such a system could not be said to be “of benefit to the employees”.
    • The alleged safety of the new work roster should not establish that 455 overtime hours were “reasonable”.
    • HPS submitted that the new four panel roster provided a benefit to it as the employer, primarily because under the old five panel roster there were times when it was unable to get enough people to work overtime. HPS also submitted that cost savings followed the introduction of the new four panel roster, however the union submitted that this did not follow in circumstances where, for example, HPS was now paying for approximately an additional 15,000 overtime hours (which could, conservatively, cost HPS an additional $1,000,000 annually) as well as the cost of redundancies.
60. Ultimately, the union contended, in summary:
    • Construction of cl 34.1 was informed by cl 5, where cl 5 means that reasonable overtime will be overtime which is not greatly less or more than 104 hours per annum;
    • If overtime did not answer that description, it was unreasonable overtime and did not fall within cl 34.1;
    • The new work roster which required all employees to work 455 hours overtime per annum did not meet the description of reasonable overtime contained in cl 5; and
    • HPS contravened cl 34.1 of the 2013 Enterprise Agreement.

HPS’ case in respect of the alleged contravention of cl 34.1

61. HPS framed this issue as whether the union proved, on the facts, that the overtime required by HPS employees under the new work roster (until the commencement of the 2017 Enterprise Agreement) was not reasonable. The union bears the onus of proving the contravention, and HPS bears no onus of disproof: see Adams v Director of the Fair Work Building Industry Inspectorate [2017] FCAFC 228 at [106].
62. HPS argued that the union has failed to discharge that onus.
63. HPS submitted, in summary, that:
    • The union did not adduce any evidence to show that the overtime required by the new work roster was unreasonable;
    • The Court could not find that the required overtime hours were unreasonable without identifying how that was so with respect to the factual circumstances pertaining to a particular employee;
    • Evidence positively established the reasonableness of the overtime hours in the new work roster;
    • Given that the FW Act comprised the legislative context in which the 2013 Enterprise Agreement was made, the Court may take guidance from the factors set out in s 62(3) of the FW Act in determining what constitutes “reasonable additional hours”. Having regard to the factors set out in s 62 (3) of the FW Act:
      • (a) Evidence before the Court demonstrates that the new work roster was safe (s 62(3)(a));
      • (b) The new work roster created greater efficiencies for HPS (s 62(3)(c) and (g));
      • (c) The new work roster created cost savings (potentially: s 62(3)(c));
      • (d) The new work roster was partly motivated by a desire to improve employee engagement at the Hay Point Coal Terminal, meaning the employees’ involvement with, commitment to and satisfaction with their work (potentially: s 62(3)(c), (g), (h) and (j));
      • (e) Under the new work roster, employees started their first shift on a day when management was rostered on, allowing managers and superintendents more direct contact with the shift crews, thus creating better lines of communication (s 62(3)(c));
      • (f) The new work roster created benefits for employees, including certainty of the roster, a more equitable workload across the employee base, and inclusion of training days in the roster (potentially: s 62(3)(b), (h) and (j));
      • (g) HPS consulted the union, and employee representatives supported the new work roster (s 62(3)(j)); and
      • (h) The new work roster put the Hay Point Coal Terminal in line with all other BMA shift operations (s 62(3)(c)).
    • The union needed to prove that overtime required by HPS of its employees under the 2013 Enterprise Agreement was not reasonable overtime, however the union has limited its case to the claim that the new work roster prescribed overtime substantially in excess of 104 hours per annum.

Consideration

64. In circumstances where I have concluded that the proper construction of the term “reasonable overtime” as found in cl 34.1 generally means 104 hours, the question is now whether the overtime hours prescribed by the new work roster were “reasonable” for the purposes of cl 34.1. HPS asserted that it was appropriate to have regard to much broader evidentiary circumstances referable to the concept of “reasonableness” than simply to the language of cl 34.1 and cl 5 of the 2013 Enterprise Agreement.
65. However the language of the 2013 Enterprise Agreement is plain, and clearly manifests the intentions of the parties in determining what would generally be considered reasonable overtime for employees for all purposes relevant to the Agreement.
66. While the definition of “reasonable overtime” in cl 5 referred to hours of overtime which are “generally considered reasonable”, cl 5 then clarifies that such hours would not necessarily be available to all employees and that not every employee would be required to work those 104 hours. To that extent, I agree with the submission of the union that cl 5 nominated 104 hours as a benchmark of overtime hours generally considered reasonable. Clause 6.1 of the 2013 Enterprise Agreement also specified 35 hours as being ordinary hours of engagement per week. While cl 34.1 anticipated that HPS could require employees to work overtime, that requirement was qualified by reference to reasonableness and was not open-ended. In my view significant deviation from the explicitly agreed benchmark of 104 hours overtime in terms of the 2013 Enterprise Agreement would require specific language in the Agreement to that effect, which was not apparent on its face.
67. Further, and notwithstanding the submissions of HPS, I am unable to identify how it could possibly be argued that 455 hours of overtime, which is more than 4 times the benchmark of 104 hours agreed by the parties to the 2013 Enterprise Agreement as “generally reasonable”, can be “reasonable” – or even “generally” reasonable – when measured against that agreed benchmark. HPS criticised the union’s reliance on the terms of the 2013 Enterprise Agreement, and in particular the union’s reliance on the definition of “reasonable overtime”. In my view however the position of the union was justified, both from the perspective of language used in that Agreement, and the plain fact that the terms of the 2013 Enterprise Agreement reflected the intentions of the parties against the backdrop of negotiations between them.
68. The union submitted that 455 overtime hours per annum equated to 435% of the 104 hours “reasonable overtime” benchmark as defined in cl 5 of the 2013 Enterprise Agreement. HPS submitted that employees were entitled by the 2013 Enterprise Agreement to 6 weeks annual leave, which meant that the required overtime of such employees who took the whole 6 weeks leave would be only 402.5 hours of overtime for that year (rather than 455 hours of overtime per annum). However even assuming that this was the case, the outcome of the new work roster would still have been an increase in required overtime hours of such employees in the range of 387% compared with the 104 hours of overtime stipulated in the 2013 Enterprise Agreement.
69. Even more telling is the fact that the outcome of the new work roster requiring employees to work 455 hours of overtime per annum was that employees were required to work an average extra 8.75 hours per week overtime, on top of their ordinary 35 hours per week. That equated to an additional 25% of their ordinary working hours, which hours they were required to work, and which was not voluntary overtime.
70. To the extent that HPS relied on the factors set out in s 62(3) of the FW Act as relevant to a determination of what was “reasonable” overtime in the current circumstances, I consider that such reliance is misplaced. As the union properly submitted:
    • Section 62 was not operative when the parties agreed to insert the definition of reasonable overtime as found in cl 5.
    • There was no restriction on the parties agreeing on terms that were ancillary and supplementary to terms to the National Employment Standards.
    • The parties deliberately chose not to replicate s 62(3) but rather imposed a site-specific definition that was more beneficial to employees than s 62 (that is, that overtime should be assessed against the benchmark of 104 hours as opposed to the term “reasonableness”).
    • The terms in the National Employment Standards could co-exist with negotiated entitlements, particularly in circumstances where the parties have negotiated a more generous entitlement of 104 hours of overtime.
71. To the extent that the determination of what is reasonable overtime within cl 34.1 is a question of fact, such question must be resolved by reference primarily to the terms of the 2013 Enterprise Agreement, and in particular the definition of “Reasonable Overtime” as set out in cl 5 of that Agreement. The definition is unambiguous, and was agreed by the parties, “for the purposes of this Agreement”.
72. In my view the new work roster imposed hours of overtime on employees which were not “reasonable overtime” hours within the meaning of cl 34.1.

CONCLUSION

73. In light of these findings, the union is entitled to the following declaratory relief:

The respondent contravened section 50 of the Fair Work Act 2009 (Cth) by requiring its employees, who were covered by the Hay Point Services Enterprise Agreement 2013 (the Agreement), to work 455 overtime hours per annum from 16 July 2016 until the Agreement ceased to operate on 5 June 2017, in contravention of clause 34.1 of the Agreement.

74. In the event that the union was successful in respect of its application for declaratory relief, HPS submitted that the contravention constituted only a single contravention of s 50 of the FW Act. This is an issue which goes to penalty in the event of contravention, which has now been established.
75. The appropriate order is to list the matter for further case management, to allow the filing of further submissions and material referable to penalty.

Associate:



Dated: 19 December 2019