FEDERAL COURT OF AUSTRALIA Construction Forestry Mining & Energy Union (Construction & General Division) v The Master Builders Group Training Scheme Inc [2007] FCAFC 165 INDUSTRIAL LAW – interpretation of award – clause 38 National Building and Construction Industry Award 2000 – application to apprentices in South Australia attending trade school – whether travel patterns allowance payable in respect of trade school – whether apprentice attending trade school as required is 'employed on work' within the meaning of the Award – Held:travel patterns allowance not payable in respect of travel to trade school – appeal dismissed Workplace Relations Act 1996 (Cth)ss 4, 848 Training and Skills Development Act 2003 (SA) s 37 Construction Forestry Mining and Energy Union v The Master Builders Group Training Scheme Inc [2007] FCA 435approved Qantas Airways Limited v Fetz (1998) 84 IR 52 cited Wallace v CA Roofing Services Ltd [1996] IRLR 435cited CONSTRUCTION FORESTRY MINING & ENERGY UNION (CONSTRUCTION & GENERAL DIVISION) v THE MASTER BUILDERS GROUP TRAINING SCHEME INC SAD 57 OF 2006 BRANSON, FINN AND GYLES JJ 26 OCTOBER 2007 ADELAIDE IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY SAD 57 OF 2006 ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: CONSTRUCTION FORESTRY MINING & ENERGY UNION (CONSTRUCTION & GENERAL DIVISION) Appellant AND: THE MASTER BUILDERS GROUP TRAINING SCHEME INC Respondents JUDGES: BRANSON, FINN AND GYLES JJ DATE OF ORDER: 26 OCTOBER 2007 WHERE MADE: ADELAIDE THE COURT ORDERS THAT the appeal be dismissed. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY SAD 57 OF 2006 ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: CONSTRUCTION FORESTRY MINING & ENERGY UNION (CONSTRUCTION & GENERAL DIVISION) Appellant AND: THE MASTER BUILDERS GROUP TRAINING SCHEME INC Respondents JUDGES: BRANSON, FINN AND GYLES JJ DATE: 26 OCTOBER 2007 PLACE: ADELAIDE REASONS FOR JUDGMENT THE COURT INTRODUCTION 1 This appeal concerns the proper interpretation of cl 38 of the National Building and Construction Industry Award 2000 as it applies to apprentices in South Australia. Clause 38 of the award relevantly provides: '38.1 Metropolitan radial areas … the following fares and travel patterns allowance shall be paid to employees for travel patterns and costs peculiar to the industry which include mobility requirements on employees and the nature of employment on construction work. … 38.1.2 South Australia When employed on work located within a radius of 30 kilometres from the GPO Adelaide - $14.20 per day.' … 38.10 Daily entitlement 38.10.1 The travelling allowances prescribed in this clause shall not be taken in to account in calculating overtime, penalty rates, annual or personal leave, but shall be payable for any day upon which the employee in accordance with the employers requirements works or reports for work or allocation of work and for the rostered day off as prescribed in clauses 27 – Hours of work and 30 – Shift work of this award. The allowances shall however be taken into account when calculating the annual leave loading.' The dispute between the parties concerns whether an apprentice in South Australia is entitled to the fares and travel patterns allowance on a day when he or she is at trade school. 2 The appellant applied to the Court pursuant to s 848 of the Workplace Relations Act 1996 (Cth) ('Workplace Relations Act') for an interpretation of the Award, for a finding that the respondent had breached the Award by failing to pay employee apprentices in South Australia the fares and travel patterns allowance in respect of each day when the apprentices attended trade school and for the imposition of a penalty on the respondent for breaching the Award. 3 The learned primary judge did not formally give an interpretation of the Award. His Honour dismissed the application having determined that an apprentice in South Australia did not have an entitlement under the Award to be paid a fares and travel patterns allowance when attending trade school (see Construction Forestry Mining and Energy Union v The Master Builders Group Training Scheme Inc [2007] FCA 435). FACTS 4 A statement of agreed facts was provided to the primary judge. The agreed facts include the following: '1. The Applicant is an organisation of employees registered under the Workplace Relations Act 1996 (the Act). 2. The Respondent is an employer who employs apprentices in the trades of carpentry, carpentry and joinery, joinery, cabinetmaking, bricklaying, painting and decorating, painting, solid plastering, fibrous plastering, wall and ceiling lining and roof tiling. 3. The Applicant and the Respondent are respondents to the National Building and Construction Industry Award 2000 (The Award), being an Award of the Australian Industrial Relations Commission made under the Act. … 6. The Respondent requires that its apprentices enter into contracts of training as an express term of their contracts of employment. 7. Under their contract of employment, it is an obligation that the apprentices attend trade school. Failure to attend trade school without good reason would result in an apprentice suffering consequences at the initiative of the Respondent, pursuant to the Demerit Points system in the Apprentice Induction Package, such as an Official Warning. … 11. The Respondent requires its' [sic] apprentices to follow reasonable instructions they receive at trade school.' 5 Additionally the appellant called evidence from two men who had completed apprenticeships with the respondent. The primary judge accepted their evidence. His Honour identified the following key facts that emerged from the evidence: '1. Apprentices employed by the respondent were employed on the terms and conditions set out in the induction package. It was a condition of their employment that there be a contract of training. The contract of training was regulated by the provisions of the Training and Skills Development Act 2003 (SA) and prior to that Act, the Vocational Education, Employment and Training Act 1994 (SA). 2. The respondent 'hired out' or 'leased out' the apprentices to employers, and when they were working for a host employer they were paid a wage and a travel patterns allowance under cl 38 of the award. 3. Apprentices employed by the respondent were required under a contract of training to attend trade school and, generally speaking, they did so in one-week blocks. They were paid for a 40-hour week when they attended trade school. They were not paid the travel patterns allowance under cl 38 of the award. Again, generally speaking, they took their own tools to trade school because it was more convenient to do so or because they were of better quality than the tools provided by trade school. There was no legal requirement that they provide their own tools when attending the school. On occasion, apprentices attending trade school went to work sites as part of their training. On occasion, apprentices attending trade school would receive telephone calls from their host employer about work issues.' No challenge was made on appeal to the facts found by the primary judge. REASONS FOR DECISION OF THE PRIMARY JUDGE 6 The reasoning of the primary judge on the critical issue before him for determination is encapsulated at [39] of his Honour's reasons for judgment: 'It seems to me that although the matter is not clear, the terms of the award support the interpretation advanced by the respondent, namely, that apprentices attending trade school are not entitled to the travel patterns allowance. I say that for two reasons. First, if one has regard to the purpose of the travel patterns allowance, the payment of the allowance to a worker who attends trade school does not seem to be within that purpose. In the case of trade school, the location of the place the worker is required to attend does not vary. I think that point holds good even though I recognise that the allowance itself is not calculated by reference to actual cost incurred or inconvenience suffered. Secondly, although the meaning of the word "work" will vary, depending on the context, I do not think that one would ordinarily consider that an apprentice attending trade school was employed on "work".' CONSIDERATION 7 Clause 20.2.11 of the Award provides: 'Except where inconsistent with the South Australian Vocational Education, Employment and Training Act 1994, the general provisions of this award shall apply to apprentices employed on work within the scope of this award.' 8 It is accepted that the above reference to the Vocational Education, Employment and Training Act 1994 (SA) should now be understood as a reference to the Act which repealed and replaced that Act, namely the Training and Skills Development Act 2003 (SA). Neither party suggested that any provision of that Act is inconsistent with any relevant provisions of the Award. 9 Section 37 of the Training and Skills Development Act is concerned with training under contracts of training. Section 37(10) provides as follows: 'If an apprentice/trainee attends a course previously undertaken by the apprentice/trainee, the time spent re-attending the course need not be counted for the purpose of determining the wages payable to the apprentice/trainee but, with that exception, the time spent attending or re-attending any course as required under the contract of training is to be treated for all purposes as part of the employment of an apprentice/trainee.' 10 As recognised by the statement of agreed facts, each apprentice employed by the respondent enters into a standard form training contract. An obligation imposed on the respondent by the standard form training contract is the obligation to make sure that the apprentice receives on the job training in accordance with a training plan. The respondent meets that obligation by placing apprentices employed by it with host employers. Another obligation imposed on the respondent by the training contract is the obligation to release the apprentice from work, and pay the appropriate wages, while the apprentice attends any training and assessment specified in the training plan. It is accepted that the relevant training plan provided for off‑the‑job training at a TAFE College – commonly described as trade school. 11 The critical issue to be determined on this appeal is whether an apprentice who is at trade school as required by his or her training contract is 'employed on work' within the meaning of cl 38.1.2 of the Award. The issue can equally be stated by reference to cl 38.10.1 of the Award; that is, whether a day on which an apprentice is at trade school is a day upon which he or she, in accordance with the employer's requirements, works or reports for work or allocation of work. The respondent chose not to argue that the appeal could be determined by reference to the meaning of the phrase 'employed on work within the scope of this award' in cl 20.2.11 of the Award. 12 The appellant argued that an apprentice at trade school is 'employed on work' within the meaning of cl 38.1.2 of the Award because the respondent and the host employer are obliged by statute and contractually to allow the apprentice to attend trade school and the apprentice is contractually obliged to so attend. The appellant submitted that the attendance at trade school is thus part of the work of the apprentice. 13 In one sense the above submission is plainly correct. It is not in dispute that the apprentices attend trade school in the course of, and as part of, their employment. However, as noted above, the critical question is rather the meaning of the phrase 'employed on work' in cl 38.1.2 of the Award. It is necessary to determine whether the Award discloses an intention, as the respondent contends, that this phrase should encompass only productive work of direct benefit to employers and should not include off-the-job training at a vocational institution. 14 Apprenticeship has long been recognised as involving both training and work. In Wallace v CA Roofing Services Ltd [1996] IRLR 435 at 436 Sedley LJ noted: '… the contract of apprenticeship remains a distinct entity known to the common law. Its first purpose is training; the execution of work for the employer is secondary.' 15 In Qantas Airways Limited v Fetz (1998) 84 IR 52 at 66 the Full Bench of the Australian Industrial Relations Commission observed: '… an apprenticeship consists of a range of training and occupational activities. These activities include formal classroom training, on-the-job training, examinations and the performance of work which acquires significant value in the latter stages.' 16 The distinction between training and work is reflected in the definition of 'training arrangement' contained in s 4 of the Workplace Relations Act which is in the following terms: 'training arrangement means a combination of work and training that is subject to a training agreement or a training contract between the employee and employer that is registered: (a) with the relevant State or Territory training authority; or (b) under a law of a State or Territory relating to the training of employees.' It seems plain that the contracts of training to which the respondent and its apprentices are parties are training arrangements within the meaning of this definition. 17 Although it is probably dangerous to subject the language of the Award to excessively close analysis, it is of significance that cl 38.12.3, which concerns school based apprentices, draws a distinction between work and off-the-job training. Clause 38.12.3 provides: 'Notwithstanding the other provisions of this clause, school based apprentices shall only receive the allowances prescribed under clause 38.1, 38.2 and 38.3, at the scale prescribed in clause 38.12.1, for days when they attend work and they shall not be paid the allowance for days they attend school. When a school based apprentice attends off-the-job training, not at the school in which they are enrolled, they shall receive 25% of the allowance as prescribed in clause 38.12.1.' 18 Similarly, cl 39.2.4(b) which concerns civil operations traineeships provides: 'A trainee shall be permitted to be absent from work, without loss of pay or continuity of employment, to attend the off-the-job training in accordance with the contract of training.' 19 Clause 19.3.5(b) of the Award, which is concerned with skills training for employees generally, provides: 'Where, as a result of consultation in accordance with this clause it is agreed that additional training should be undertaken by the employee, that training may be taken either on or off the job. Provided that if the training is undertaken during normal working hours the employee concerned shall not suffer any loss of pay. The employer shall not unreasonably withhold such paid training leave.' It seems to be implicit in this provision that an employee who undertakes training during normal working hours is on paid leave from his or her work. 20 A conclusion that an apprentice who is at trade school as required by his or her training contract is not 'employed on work' within the meaning of cl 38.1.2 of the Award is consistent with the apparent purpose of the fares and travel patterns allowance. The Award provides that the fares and travel patterns allowance is to be 'paid to employees for travel patterns and costs peculiar to the industry which include mobility requirements on employees and the nature of employment on construction work' (see cl 38.1). An apprentice's travel to trade school does not involve travel patterns and costs peculiar to the building and construction industry and has nothing to do with the nature of employment on construction work. 21 In our view the long accepted nature of a contract of apprenticeship, the language of the Award and the purpose for which the fares and travel patterns allowance is paid, all suggest that an apprentice while at trade school is not 'employed on work' within the meaning of cl 38.1.2 of the Award. We conclude that the primary judge correctly concluded that South Australian apprentices attending trade school are not entitled to receive the fares and travel patterns allowance for which cl 38 of the Award provides. CONCLUSION 22 The appeal will be dismissed. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Branson, Finn and Gyles. Associate: Dated: 26 October 2007 Counsel for the Appellant: Mr S Crawshaw SC Solicitor for the Appellant: Mr T Roberts, Construction Forestry Mining and Energy Union Counsel for the Respondent: Mr T Stanley QC Solicitor for the Respondent: Black Cleland Date of Hearing: 6 August 2007 Date of Judgment: 26 October 2007