Industrial Relations Commission New South Wales Medium Neutral Citation: The Australian Workers' Union, New South Wales v Department of Industry [2018] NSWIRComm 1021 Hearing dates: 16 February 2018 Decision date: 13 April 2018 Jurisdiction: Industrial Relations Commission Before: Murphy C Decision: (1) Clauses 10.1 and 12.1 of the Crown Employees Conservation Field Staff Officers, (Department of Industry, Skills, and Regional Development and NSW Office of Environment and Heritage) Reviewed Award 2015 ("CFO Award") provide that for each day of recreation or annual leave taken by an employee, their leave entitlement of 20 days per year or 152 hours should be debited by 8 hours with 0.4 of an hour notionally accruing to the employee's RDO. (2) Clauses 10.1 and 12.1 of the CFO Award provide that for each day of sick leave taken by an employee, their leave entitlement of 15 days per year or 114 hours should be debited by 8 hours with 0.4 of an hour notionally accruing to the employee's RDO. (3) Clauses 10.1 and 12.1 of the CFO Award provide that for each day of extended or long service leave taken by an employee, their leave entitlement of 22 working days or 167.2 hours for each month of long service leave accrued should be debited by 8 hours with 0.4 of an hour notionally accruing to the employee's RDO. Catchwords: INDUSTRIAL DISPUTE – award interpretation – recreation or annual leave – sick leave – extended or long service leave – rostered day off – number of hours to be debited from when leave taken – 8 hours debited with 0.4 of an hour notionally accruing to an RDO Legislation Cited: Fair Work Act 2009 (Cth) Industrial Relations Act 1996 Public Service Act 1902 Public Service Act 1979 Annual Holidays Act 1944 Long Service Leave Act 1955 Regulations made by the Public Service Board under the authority of the Public Service Act 1902 Government Sector Employment Regulation 2014 Police Regulation 2015 Cases Cited: Cepus v Heggies Transport Pty Ltd [1994] 52 IR 123 Construction, Forestry, Mining, and Energy Union v Glendell Mining Pty Limited [2017] FCAFC 35 RACV Road Services Pty Ltd v ASU [2015] FWCFB 2881 Application by Australian Municipal, Administrative, Clerical and Services Union [2014] FWC 7241 Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Southern Air (Tas) Pty Ltd [2016] FWC 7266 Category: Principal judgment Parties: The Australian Workers' Union, New South Wales (Notifier) Department of Industry (Respondent) Representation: Mr A Gounis, Industrial Officer (Notifier) Mr A Woods, Solicitor, Lander and Rogers (Respondent) File Number(s): 2016/00380286 DECISION 1. The matter with which this decision is concerned arises from a Notification to the Industrial Registrar of an industrial dispute pursuant to section 130 of the Industrial Relations Act 1996 ("the Act") which was filed in the Industrial Registry by the Australian Workers' Union, New South Wales ("AWU") on 19 December 2016. The dispute concerned Mr Barry Seagrott, a member of the AWU employed as a Conservation Field Officer ("CFO") in the Department of Trade and Investment, Regional Infrastructure and Services under the terms of the Crown Employees Conservation Field Staff Officers, (Department of Industry, Skills, and Regional Development and NSW Office of Environment and Heritage) Reviewed Award 2015 ("the CFO Award") and certain provisions of the Crown Employees (Public Service Conditions of Employment) Reviewed Award 2009 ("the COE Award"). Since the filing of the dispute notification, the name of the respondent has been changed to the Department of Industry which will be referred to in this decision as the Department. 2. The operative parts of the dispute notification are set out below: 4.3 Mr Seagrott works his 38 ordinary hours in accordance with Clause 10.1(i) Hours of Work contained in the Award. Specifically, he works an 8 hour day over 57 days in each 12- week cycle and accrues 24 minutes a day to enable a Rostered Day Off ("RDO") each month. 4.4 When Mr Seagrott accrues annual leave, in accordance with the Annual Holidays Act 1944, he is credited with 7.6 hours per day for the 20 days of annual leave (152 hours). 4.5 However, when Mr Seagrott takes annual leave is debited 8 hours for each day of leave. 4.6 On taking 4 weeks' for annual leave Mr Seagrott is paid 19 days of annual leave and 1 day for an RDO. Mr Seagrott disputes this method for calculating his annual leave as it has the capacity to provide a disadvantage for him when less than 4 weeks of annual leave is taken. 1. Throughout 2017, I convened a number of compulsory conferences in an endeavour to resolve the matter by conciliation. In proceedings before me on 19 September 2017, it became clear that the matter could not be settled by conciliation and I issued a Certificate of Attempted Conciliation pursuant to section 135 of the Act. Neither party raised an objection pursuant to section 173 of the Act to me proceeding into arbitration. Consequently, I made directions for the filing and serving of documents and the matter was heard before me on 16 February 2018. 2. The form of relief sought by the AWU is as follows: 1. A determination that the employees covered by the Crown Employees Conservation Field Staff Officers (Department of Industry, Skills and Regional Development and NSW Office of the Environment and Heritage) Reviewed Award 2015 Serial C8458 (CFO Award) accrue time towards an RDO when they are absent on paid leave or public holidays so that any such day counts as one of the 57 days worked under clause 12.1(i). Further, that the respondent must only deduct one day from an Affected Employees respective leave balance so that no proportion of the deduction is used towards an RDO; 2. A recommendation under section 136(1)(a) of the Industrial Relations Act 1996 that the respondent complies with the determination. 1. Relevant provisions of the CFO Award are set out below: 2. Area, Incidence and Duration ……………………… 2.2 The employees regulated by this Award shall be entitled to the conditions of employment as set out in this Award and, except where specifically varied by this Award, existing conditions are provided for under the Government Sector Employment Act 2013, Government Sector Employment Regulation 2014, the Government Sector Employment Rules 2014, Crown Employees (Public Service Conditions of Employment) Reviewed Award 2009 and the Crown Employees (Public Sector - Salaries 2015) Award; or any Awards replacing these Awards. ………………………. 10. Hours of Work 10.1 Ordinary Hours of Work Subject to subclauses 10.2 and 10.3: (i) The ordinary hours of work for all employees, other than casual employees, covered by this Award, shall be 8 hours per day worked over 57 days of each 12-week cycle. (ii) The standard span of hours will be between 6.00 a.m. and 6.00 p.m. on each working day Monday to Friday. ………………………. 12. Rostered Days Off 12.1 Entitlement (i) An employee's ordinary hours will be worked on no more than 57 days in each 84-day cycle, Monday to Friday, with 3 days in each period being regarded as a rostered day off (RDO). Each day of paid leave taken and any public holidays occurring during any cycle of 4 weeks shall, for the purposes of this paragraph, be regarded as a day worked. (ii) An employee who has not worked 57 days in a complete 84-day cycle shall receive pro rata accrued entitlements for each day worked (or for each fraction of a day worked), payable for the rostered day off or, in the case of termination of employment, on termination. 12.2 Scheduling RDOs (i) An employee's RDO will be scheduled in advance of each cycle in which it occurs, taking into account the interests of employees and ensuring that the Department' or the Office's operational needs are met having regard to seasonal, climatic and workload factors. (ii) With a minimum of 12 hours' notice to affected employees and without penalty to the Department or the Office, RDOs may be rescheduled to satisfy operational needs. Agreed substitute RDOs are to be provided by mutual agreement and may only be deferred under circumstances of emergency. 12.3 Accumulating RDOs (i) Employees may accumulate (bank) up to 10 RDOs. Employees will be given an opportunity to take their accumulated RDOs at a time convenient to both the employee and the Department or the Office prior to the end of February in each calendar year. (ii) Employees may take their accumulated RDOs by agreement with the appropriate manager: (a) consecutively to a maximum of 10 days; or (b) by working 9-day fortnights; or (c) by a combination of these 2 methods. Employees may agree with their manager to defer taking some of their accumulated RDOs, provided that RDOs are not forfeited and provided that no more than 10 RDOs are accumulated at any one time. (iii) Once scheduled, the only circumstances in which a "banked" RDO will be required to be worked is fire or similar state of emergency. ……………………….. 13. Leave 13.1 General Provisions The Department and the Office shall be bound by the provision of the Uniform Leave Conditions of Employment for Ministerial Employees, subject to the amendments and additions specified in this clause. 13.2 Sick Leave (i) Sick leave will accrue on a calendar year basis, with the full annual entitlement being available from 1 January each year for employees employed as of that date. (ii) New employees who commence after 1 January will receive a pro rata credit for that proportion of the calendar year remaining. Sick leave taken during the first 3 months of employment will only be paid upon the completion of 3 months' service and following one month's continuous service without the taking of any sick leave, up to a maximum entitlement of 15 days' paid sick leave per annum. (iii) Unused sick leave entitlements will accrue, in accordance with Ministerial Leave Conditions. ……………………. 13.5 Annual Leave (i) An employee may elect, with the consent of the appropriate Secretary, to take annual leave not exceeding 10 days in single-day periods or part thereof, in any calendar year at a time or times agreed by the parties. 1. With respect to recreation or annual leave entitlements, the Uniform Leave Conditions for Ministerial Employees in Government Departments and Equivalent Employees in Corporate Bodies ("UL Conditions"), as referred to in clause 13.1 of the CFO Award, contains the following provision: PART A - FULL TIME EMPLOYEES 1. RECREATION LEAVE (i) Recreation leave accrues at one and two third days per completed month of service, up to a maximum of 20 days per year. Recreation leave does not accrue in respect of unauthorised absences or in respect of authorised periods of leave without pay which, when aggregated, exceed five working days in a leave year unless such leave is taken during annual shutdown - see paragraph (iv) Annual Shutdown below. 1. Also relevant to these proceedings are the following provisions from the COE Award: 22. Rostered Days Off for 38 Hour Week Workers 22.1 The provisions of this clause apply only to those employees who work a 38 hour week and are entitled to a rostered day off in a regular cycle. 22.2 Time for a rostered day off accrues at 0.4 of an hour each 8 hour day. 22.2.1 Except as provided in paragraph 22.2.2 of this subclause, all paid ordinary working time and paid leave count towards accrual of time for the rostered day off. 22.2.2 Limit - When a long period of approved leave is taken, accrual towards a rostered day off applies only in respect of the 4 weeks' period during which the employee resumes duty. 22.2.3 Exception - Notwithstanding the provisions of paragraph 22.2.22 of this subclause, where more generous provisions apply to the accrual of rostered days off, such provisions shall continue to apply until renegotiated. 22.3 In the event of unforeseen circumstances or the Department's operational requirements, the rostered day off may be deferred and taken at a later more suitable time. 22.4 Where seasonal or school vacation considerations affect Departmental operations, rostered days off may be accrued and taken during a less active period. 22.5 A rostered day off is not to be re-credited if the employee is ill or incapacitated on a rostered day off. 22.6 Payment of above level allowances is not to be made to another employee for undertaking some or all of the duties of the employee who is absent on a rostered day off. ……………………….. 70. Extended Leave Extended leave shall accrue and shall be granted to employees in accordance with the provisions of Part 2, Division 3, Clause 16 Extended leave entitlements and Schedule 1 Public Service extended leave entitlements of the Government Sector Employment Regulation 2014. ………………………… 77. Recreation Leave 77.1 Accrual 77.1.1 Except where stated otherwise in this award, paid recreation leave for full time employees and recreation leave for employees working part time, accrues at the rate of 20 working days per year. Employees working part time shall accrue paid recreation leave on a pro rata basis, which will be determined on the average weekly hours worked per leave year. 1. Clause 16 Extended Leave Entitlements, and clause 2 Extended Leave Entitlements Generally, of Schedule 1 to the Government Sector Employment Regulation 2014, as referred to in clause 70 of the COE Award, are in the following terms: 16 EXTENDED LEAVE ENTITLEMENTS Schedule 1 applies to Public Service employees other than persons employed in casual employment. This clause is subject to Schedule 4 to the Act. …………………….. 2 EXTENDED LEAVE ENTITLEMENTS GENERALLY (1) After service for 7 years or more but not more than 10 years, a Public Service employee is entitled to extended leave, proportionate to his or her length of service, calculated at the rate of: (a) 2 months on full pay, or (b) 4 months on half pay, or (c) one month on double pay, for 10 years served. (2) After service for more than 10 years, a Public Service employee is entitled to extended leave under subclause (1) in respect of the first 10 years and additional extended leave, proportionate to his or her length of service, calculated at the rate of: (a) 5 months on full pay, or (b) 10 months on half pay, or (c) 2.5 months on double pay, for each 10 years served after the first 10 years. (3) For the purposes of this clause, "service" includes any period of leave without pay taken before 13 December 1963. 1. With respect to extended or long service leave entitlements, the UL Conditions contains the following: 2. LONG SERVICE LEAVE (i) Accrual and Calculation of Leave (a) Effective from the date of issue of these Conditions, long service leave for ministerial employees accrues and is granted on a working day and not a calendar day basis. Despite this change, all public holidays occurring during the period of long service leave are to continue to be counted as part of long service leave. For the purposes of accrual of long service leave:- • one month of long service leave equals twenty two working days; • each completed year of service between 5 and 10 years of service, accrues 0.0843 days per week or 0.0169 of a day per day of service; • each completed year of service after 10 years, accrues 0.2108 days per week or 0.0422 of a day per day of service. • 10 years of service will accrue 44 working days • 20 years of service will accrue 154 working days • 30 years of service will accrue 264 working days • 40 years of service will accrue 374 working days • 50 years of service will accrue 484 working days Accrued long service leave may be taken at full or half pay. Decision as to whether leave will be taken at full or half pay, rests with the employee. Whilst every effort should be made to grant long service leave at a time requested by the employee, the ultimate decision as to when leave will be taken rests with the employer. The minimum leave that may be granted is a quarter of a day. Case for the AWU 1. The AWU relied upon a witness statement of Mr Seagrott who deposed as follows: 10. Throughout my 32 years of employment, myself and the other employees have always had to fill out a fortnightly timesheet to record the hours that we worked by hand. The details recorded in the timesheet have not changed much at all. 11. The timesheet is approved by the supervisor, who has to sign it. It is then sent to the payroll staff so that employees are paid what they are owed. 12. I have always filled out the time sheets in the following way. Based on the significant number of timesheets that I have seen completed by colleagues, the other CFOs also fill out the timesheets in the same way. 13. For a normal day at work, I record 7.6 hours for the "Base Classification hours" and record 0.4 of an hour to the "RDO Accrual". 14. Similarly, for each day of paid leave and public holidays that I have during the period of the timesheet, I record 7.6 hours for "Leave" and record 0.4 of an hour to the "RDO Accrual". 15. I am paid for 7.6 hours for each day that I work, and 38 hours for the week. I am also paid for 7.6 hours for each paid leave day, public holiday and RDO, so that I am always paid 38 hours for the week. …………………. 17. Throughout my employment before the Department of Industry took over, my payslip would always mirror the timesheet. Even when the employing department changed on other times in the past, the pay arrangements remained the same. 18. I have always worked under an RDO system in my employment with the Department of Industry and its predecessors. 19. From the start of my employment up until the Department of Industry starting as my employer, when I was absent for paid leave (such as sick leave or annual leave) I would always just have 1 day deducted from the respective paid leave balance. 20. I always still accrued time towards the RDO when I was on paid leave. If I took an RDO and I had been, for example, off sick for a couple of days during the 4 week period, I was still paid a full day's wages for the RDO. The number of days that I had been off sick was deducted from my accrued sick leave balance. 21. This longstanding practice was how the entitlement applied to me and my colleagues, up until the Department of Industry was the employing entity. 22. The Department of Industry started deducting more than 1 day for each day that I went on paid leave. This has caused me and the other CFOs disadvantage because my accrued paid leave entitlements balance is now less than what it should be because I am losing more than one day when I am on paid leave. 1. In its written submissions, the AWU put the following: Construction of clause 12 CFO Award 8. Clause 12 of the CFO Award sets out the RDO system, with 3 days absent on an RDO each 12 weeks (that is, 1 RDO accrues every 4 week cycle). 9. The plain and ordinary meaning of clause 12 is that an absence from work due for the specified reasons is treated as a day worked for qualifying for the full paid day off in the cycle. 10. Put simply, a paid leave day or a public holiday count as one of the 57 days worked in the 84 day cycle, so there is also no change to the entitlement to 3 RDOs that accrue within the 84 day cycle. 11. The key words are that the paid leave day is "regarded as a day worked". Although employees do not actually attend work on the particular day, the day is treated as if they are at work. The reason it is treated as such is for the entitlement to a paid RDO, so much is clear from the prior sentence. Context 12. Tellingly, the terms paid leave and public holidays are expressed by reference to a "cycle of 4 weeks". 13. The context of the provision within the CFO Award indicates that it relates to the operation of the RDO system. The purpose of clause 12 is to set out the operation of RDOs, with it being titled "Rostered Days Off". 14. Further, the phrase "for the purposes of this paragraph" further supports the construction for which we contend. The purpose of the paragraph is to set out details of the entitlement to an RDO. Public holidays 15. Paid leave and public holidays are dealt with in an identical manner under clause 12 of the CFO Award. 16. Both absences are paid on the basis of 7.6 hours for the day. 17. Absences for a public holiday counts as time worked for RDO accrual purposes, so that the week that an employee takes an RDO, they are still paid their normal weekly wage even though public holiday/s fell within the cycle resulting in the employee not actually working. 18. The proper construction of clause 12 of the CFO Award is that this must also apply in the same manner to paid leave absences as precisely the same words are used. Taking paid leave entitlements 19. The employees are entitled to the following paid leave entitlements: a. Annual leave – 20 days per year b. Sick leave – 15 days per year c. Long Service Leave (LSL) – 2 months for 10 years service and one month for every further 5 years of service [in practice, 4 and 1/3 weeks of paid LSL leave for each 5 years of service]. 20. It is a well accepted and beyond reproach that employee entitlements to annual leave, sick leave and long service leave are to be used expressly for that very reason. 21. For example, the plain and ordinary construction of the LSL Act is that LSL to which an employee is entitled must be taken as LSL, being a paid absence from work on the terms set out in the LSL Act. Relevantly, section 4(3) states "where a worker has become entitled to long service leave in respect of the service of the worker with an employer, the employer shall give to the worker and the worker shall take the leave". 22. Indeed, each for (sic form) of paid leave has specific and unique rules about taking of each form of leave. 23. Any employee reading that they accrue 15 days sick leave a year would rightly understand that they may be absent due to illness or injury for 15 days within the year. 24. When employees are absent for a day on annual leave or sick leave, it is one day that must be deducted from the employee's accrued entitlement 1. The AWU's submission then cited the following cases: • RACV Road Services Pty Ltd v ASU [2015] FWCFB 2881 • Construction, Forestry, Mining, and Energy Union v Glendell Mining Pty Limited [2017] FCAFC 35 • Application by Australian Municipal, Administrative, Clerical and Services Union [2014] FWC 7241 • Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Southern Air (Tas) Pty Ltd [2016] FWC 7266 1. The AWU then referred to clause 22 of the COE Award and the submission continued as follows: 49. Clause 12.1 of the CFO Award comprehensively sets out the conditions for the Affected Employees with respect to RDO credit when an employee is absent on paid leave or public holidays, being that all paid leave and public holidays count towards the accrual of RDOs. 50. The terms of clause 22 of the COE Award further support the construction that is advanced for the AWU for clause 12.1 of the CFO Award. Both clauses operate in a similar fashion, albeit that the clause 12.1 of the CFO Award contains no limit for longer periods of paid leave. 51. The COE Award limit does not apply because the CFO Award has been varied by the RDO term of the CFO Award which covers the field with respect to this issue, or otherwise clause 22.2.3 applies because the more generous provisions in the CFO Award continues to apply. Alternative position 52. In the alternative, clause 22 of the COE Award also applies to the Affected Employees as the CFO Award does not expressly vary the conditions in the COE Award because it does not expressly disallow the operation of the limiting clause 22.2.2, so that it also applies to the Affected Employees. 53. The Affected Employees meet the qualification requirements clause 22.2.1 of the COE Award. 54. Clause 12.1 CFO Award and clause 22.2.1 COE Award are of the same material effect in that paid leave and public holidays count towards the accrual of a paid RDO. 55. Therefore, the conditions would apply in accordance with our primary contention, in with the additional application of the limiting provision at clause 22.2.2 of when an RDO does not accrue. 1. During the proceedings, the following exchange occurred between Mr Gounis, who was putting the case for the AWU, and the Commission: So, in conclusion, Commissioner, we say that in this case the plain ordinary meaning of the award, considered against the Conditions of Employment Award, and indeed the provisions of the Long Service Leave Act, demonstrate that, in terms of paid leave and annual leave, where an employee is absent for a day, it is the day that is deducted. No more and no less. And that is-- COMMISSIONER: When you say "a day" you mean 7.6 hours? GOUNIS: If we're going to, for administrative ease, refer to it in terms of hours, then yes, that is the equivalent. Nothing further. COMMISSIONER: Before you sit down, just so I can understand a little better the submissions that you're putting, these employees are entitled to four weeks annual leave, or recreation leave a year? And that's been the case for many years, prior to this 38 hour week being introduced? GOUNIS: I believe so, Commissioner. COMMISSIONER: And they're entitled to take that leave in single days, with the approval of their management? GOUNIS: Correct. COMMISSIONER: So that would equate to 20 days annual leave? GOUNIS: Correct. COMMISSIONER: How many hours do you say that 20 days equates to? GOUNIS: Well, we say that it's dealt with in days, days are what we should deal with. If we want to refer to it in hours, for, as I said, ease of operation, then based on the 38 hours week, that is 152 hours and it's 7.6 hours per day, which gives the employees their full entitlement to 20 days absent on annual leave per year. COMMISSIONER: So if they were taking it in single days, on your view, each time they took a day's annual leave they'd have 7.6 hours deducted, converted to hours, and that would then, 20 days of that would equate to 152 hours, which is the four weeks? GOUNIS: That's correct. COMMISSIONER: Yes, thank you. GOUNIS: And just for finality, that is indeed how the matters have operated at the place of employment for in excess of 25 years, with a number of different employers and we say that that is the correct approach. COMMISSIONER: Well, as I understand what the employer's now doing, to which you object, is when a day's annual leave is taken they're deducting eight hours, if converted to hours, but .4 of an hour is credited towards an RDO accrual? Is that what you understand is happening? GOUNIS: Yes, that's right. COMMISSIONER: So that if that system is applied to individual single days annual leave, employees will still get 20 days off on pay, because they'll accrue an RDO for which they'll be paid. GOUNIS: Correct, however, they won't get 20 days of annual leave, which is their entitlement. It's not an entitlement to 19 days annual leave and one day as an RDO and-- COMMISSIONER: But the net effect, in terms of time off work and payment received, will be the same under either system? GOUNIS: Well, no, because we say that under clause 12.1 of the award a paid leave day, take for example a single day annual leave, that counts as a day worked, one of the 57 days worked. So, employees are still entitled to their three days RDO at full pay. So, they're separate issues, we say. COMMISSIONER: Sorry, just following that now, you say that if one of those 57 days is taken as an annual leave day, 7.6 hours is deducted from the leave balance, in terms of hours, but that day still accrues .4 of an hour to an RDO? GOUNIS: Correct and that's how it applies under the Conditions of Employment Award. COMMISSIONER: Isn't that double counting, though? Because in order to have .4 of an hour credited to an RDO, you need to work eight hours. GOUNIS: Well, it's not double counting, Commissioner, because they deal with separate matters and we accept it is an additional benefit to the employees for a paid leave day to count as they worked for the purposes of RDO's. We accept that, that's not in dispute. However, that is how the parties in this award and, indeed, the majority of RDO systems, have sought to deal with RDO's. Case for the Department 1. The Department relied on witness statements from Anthony Tonks, Team Leader, Payroll, of the Land and Property Management Authority (NSW) ("LPMA") and Simon Kempson, Director of Industrial Relations of the Department. 2. Mr Tonks commenced in his role as Team Leader with the LPMA on 16 April 2010. He gave evidence about the SAP payroll system and the "rules" that were developed for the calculation of the hours of leave to be deducted from an employee's leave balance when that employee was absent on leave. 3. According to Mr Tonks, as part of the 38 hour week system, employees were entitled to 152 hours of annual leave per year. For each day of leave, eight hours was deducted from the employee's leave balance, being 7.6 hours to account for pay and 0.4 of an hour to count towards a rostered day off ("RDO") that an employee would be entitled to on a regular work day. According to this system, employees were entitled to 13 RDOs per year. 4. Early on during his employment with the LPMA, it came to Mr Tonks' attention that certain staff within the Department, including CFOs, were only having 7.6 deducted from their leave balance for each day of leave taken. According to Mr Tonks, the consequence of deducting 7.6 hours instead of 8 hours from an employee's leave balance for each day of recreation leave is that the employee reduces their leave balance at a slower rate, thus maintaining a larger annual leave balance. In addition, the employees were being given RDOs that should not have been accrued during periods of leave. 5. Mr Kempson produced a number of tables demonstrating various scenarios with different amounts of leave taken at different times during a four week cycle. These tables supported the treatment of each day of leave as comprising 8 hours. 6. In its written submissions, the Department put the following: 5. The issues which are in dispute in the proceedings are: (a) How many hours are to be deducted from a Conservation Field Officer's recreation leave balance for each day of recreation leave taken? Should this be 7.6 hours or 8 hours? (b) How many recreation leave and long service leave days or hours are Conservation Field Officers entitled to? ……………………. 21. In the Respondent's view, clause 10.1(i) and clause 12.1(i) of the Award are entirely unambiguous and when read in the context of the entire Award prescribe the following conditions for Conservation Field Offices: (a) ordinary working hours of 8 hours per day, worked over a 38-hour week; (b) pay for 7.6 hours of each 8 hours worked with the remaining 0.4 of an hour accruing towards an RDO; (c) the same approach applies to the accrual of RDOs irrespective of whether a Conservation Field Officer is working or on paid leave; (d) are entitled to 4 weeks or 152 hours of recreation leave per year; and (e) are entitled to 3 RDOs each 12 week cycle being approximately 13 RDOs a year (52.143 weeks per year divided by 12 weeks per cycle equals 4.345 cycles multiplied by 3 RDOs per cycle giving 13.035 days). Determination Principles of award interpretation 1. In Cepus v Heggies Transport Pty Ltd ([1994] 52 IR 123) the majority of the Full Bench of the Commission, after reviewing relevant authorities, set out the following principles of award interpretation (per Glynn and Cullen JJ at 127-128): (i) Awards are not to be interpreted as strictly as statutes; (ii) Awards are to be interpreted on the basis that the intention of the parties is gathered from the whole award; (iii) Awards are often expressed in loose language used by the parties to meet their needs; (iv) Situations which fall accidentally within the words of an award should not be regarded as coming within such award. (v) Where the words are susceptible of more than one meaning, the Tribunal should place itself in the position of the award-making body in order to understand its intended meaning. Regard may be had to evidence as to usage of the trade. (vi) The meaning to be attributed to an award term is to be found by reading it in its industrial context recognising that awards are drawn up by those who cannot be expected to be perfectionists in legal drafting. (vii) It is desirable that, in interpreting an award, the Tribunal should have the fullest knowledge of the circumstances under which it is made. (viii) The context of an award should be considered in the first instance and not merely when ambiguity might be thought to have arisen. (ix) The history of the award provision is relevant to the ascertainment of its meaning. Recreation or annual leave 1. Section 3 of the Annual Holidays Act 1944 and section 87 of the Fair Work Act 2009 (Cth) establish the standard entitlement to annual leave for non-shiftworkers (ie. Monday to Friday workers) as four weeks for each year of service. This standard applies to the bulk of the Australian workforce, including NSW public servants. 2. The difficulty at the centre of this dispute arises from the interrelationship between the provisions of the various industrial instruments set out at paragraphs 5-9 above. Clause 77.1.1 of the COE Award provides for recreation leave to accrue "at the rate of 20 working days per year". Part A, clause 1(i) of the UL Conditions provides for recreation leave to accrue "at one and two third days per completed month of service, up to a maximum of 20 days per year". I take this provision to be consistent with clause 77.1.1 of the COE Award in that an employee who has completed 12 months' service will have accrued the maximum of 20 days recreation leave. 3. For employees who are not on an RDO system, such as 35 hour week employees working 7 hour days, Monday to Friday, there is no difficulty in equating 20 working days' recreation leave with the standard entitlement to four weeks' annual leave. Historically, public service clerks have worked under such an arrangement. 4. The difficulty arises in relation to employees who work more hours on each day but on less than 20 days in every four weeks. 5. The issues which have been ventilated in this matter arose initially as a result of the reduction in the standard weekly hours of work from 40 to 38 which occurred in the early 1980's. Prior to that time, the entitlement of public servants who worked a 40 hour week (5 x 8 hour days) to recreation leave was expressed as four weeks or 20 days which equated to 160 hours. 6. Prior to the introduction of the 38 hour week, the "Procedure Handbook, Staff and Personnel Matters, Public Service Board of New South Wales" contained the following provision: F – RECREATION LEAVE 1. General basis and conditions (1) Public Service Regulations applicable to this section are regulations 42 and 47A. There are specific regulations dealing with recreation leave conditions for officers of particular departments – see (5) below. (2) Historical note concerning annual (recreation) leave to officers under the Public Service Act (a) Permanent officers (i) Since the first Public Service Act in 1902 until 31st December, 1963, recreation leave accrued at the rate of 3 weeks per annum. (ii) As from 1st January, 1964, the recreation leave entitlement was increased to 4 weeks per annum. 1. The relevant part of Regulation 42 of the regulations made by the Public Service Board under the authority of the Public Service Act 1902 was in the following terms: ANNUAL LEAVE OF ABSENCE FOR RECREATION 42. Except where otherwise provided by these Regulations, leave of absence for recreation shall accrue to officers and employees at the rate of twenty working days per year… 1. The entitlement to recreation leave, whether it be expressed in weeks or days, was the same at this time because 20 working days equated to four weeks or 160 hours. The reduction in the weekly hours of work from 40 to 38 should not have impacted upon this recreation leave entitlement. Had the number of hours of work each day simply been reduced from 8 to 7.6, no issue would have arisen in relation to the recreation leave entitlement being expressed as four weeks or 20 days. Either way, the entitlement would still have equated to 152 hours (7.6 x 20 days) 2. However, in the case of many employees, including those in the class of employee which is the subject of these proceedings, the 38 hour week was implemented, not by reducing the daily number of hours worked, but by maintaining a working day of 8 hours and allowing employees to have one RDO every four weeks (20 working days) without loss of pay, resulting in an average of 38 hours worked per week over the cycle of four weeks. A typical work pattern under this type of arrangement had an employee working three weeks of five 8 hour days with the fourth week comprising four 8 hour days and an RDO. 3. In order to ensure that the employee's pay did not drop during the pay period in which the RDO was taken, the fiction was developed that for each 8 hour day that was worked, 7.6 hours attracted pay for that day and 0.4 of an hour accrued towards, and was paid in respect of, the RDO. 4. It was generally not intended that leave entitlements expressed as days or weeks would be increased by the introduction of the 38 hour week, which would be the consequence of the outcome contended for by the AWU in this matter. There is no logic, for example, in reducing the average hours of work over a four week period from 160 to 152 (20 x 7.6 hours) but maintaining the entitlement to four weeks recreation leave as being equivalent to 160 hours (20 x 8 hours). The AWU has led no evidence that such an outcome was intended by the parties to either the CFO Award or the COE Award. 5. To take a hypothetical case to demonstrate the point, a worker employed under the COE Award could be rostered to work 12 hour shifts on Monday, Tuesday and Wednesday in weeks 1 – 5 of a 6 week roster cycle and 12 hour shifts on Monday, Tuesday, Wednesday and Thursday in week 6. This would mean that the employee will have worked 228 hours over the 6 week roster period (19 x 12 hour shifts), or an average of 38 hours per week. No question of accrual of time towards and RDO arises in a case such as this. It is simply a shift roster pattern. However, if the employee's annual leave entitlement was taken as 20 working days of 12 hours duration, it would equate to 6 weeks plus one further 12 hour day of annual leave. This demonstrates the absurdity of regarding the annual leave entitlement as being 20 working days regardless of the usual daily number of hours that an employee actually works. 6. In order to make sense of the 20 working days entitlement to recreation leave referred to in clause 77.1.1 of the COE Award and Part A, clause 1(i) of the UL Conditions, for employees working a 38 hour week, the 20 days must be regarded as 20 days of 7.6 hours or 152 hours recreation leave per year. 7. The complication arises when regard is had to clause 10.1(i) of the CFO Award which states that the ordinary hours of work shall be 8 per day worked over 57 days of each 12-week cycle, and to clause 12.1(i) which provides that each day of paid leave taken and any public holidays occurring during any cycle of 4 weeks shall, for the purposes of that paragraph, be regarded as a day worked. The terms "day" and "days" as used in these provisions of the CFO Award are not synonymous with those same terms as used in clause 77.1.1 of the COE Award and Part A, clause 1(i) of the UL Conditions. In other words, the entitlement to recreation leave is not 20 days of 8 hours. 8. I agree with the submission of the Department that the entitlement to 4 weeks or 152 hours of recreation leave each year comprises 19 days of 8 hours with 0.4 of an hour each day notionally accruing to an RDO with the result that the employee has 20 days off work with no loss of pay. 9. Where recreation leave is taken in single days or blocks of days, the employee's recreation leave balance should be debited 8 hours, with 0.4 of an hour notionally accruing to an RDO, for each such day of recreation leave taken. I do not see that this approach in contrary to that adopted by the Full Bench of the Fair Work Commission in RACV Road Service Pty Ltd v Australian Municipal, Administrative, Clerical and Services Union ([2015] FWCFB 2881), a decision which was relied upon by the AWU in these proceedings. 10. I reject entirely the proposition put by the AWU that, for each day of recreation leave taken, the employee's recreation leave balance should be debited only 7.6 hours with 0.4 of an hour still accruing towards an RDO. There is nothing in the wording of any of the provisions under consideration in this matter which supports such a proposition. Further, there is a serious disconnect between the AWU's proposition that each of the 7.6 hour days of recreation leave still accrues 0.4 of an hour towards an RDO and the generally accepted concept that, on a normal working day, for 0.4 of an hour to accrue to an RDO, 8 hours has to be worked. Sick leave 1. The entitlement to sick leave under clause 13.2 of the CFO Award is 15 days' paid sick leave per annum. 2. Prior to the introduction of the 38 hour week, the relevant part of Regulation 43 of the regulations made by the Public Service Board under the authority of the Public Service Act 1902 was in the following terms: SICK LEAVE – PERMANENT OFFICERS. Granted under the authority of the Permanent Head. 43. (a) Except where otherwise provided by these Regulations, on being satisfied that any officer is unable to perform his duties on account of illness, the Permanent Head may grant such officer leave of absence on full pay to the extent provided in (i) or (ii) hereunder, whichever is the greater – (i) During the first year of service, 10 days. During the second year of service, 15 days in any period of twelve months. After two years, 30 days in any period of 12 months. ……………………. (ii) A period calculated by allowing ten days for each completed year of service and deducting therefrom the amount of sick leave on full pay granted to the officer during his service. 1. Since that time, the standard entitlement to paid sick leave across the public service has been set at 15 days per year of service. However, consistent with the approach to recreation/annual leave set out above, a "day" cannot be regarded, in terms of hours, as the number of hours worked by an individual employee on a normal work day. To do so would entitle an employee working 12 hour days to 180 hours (or the equivalent of five weeks) of paid sick leave compared to 105 hours (or the equivalent of three weeks) of paid sick leave for an employee working a 35 hour week of five 7 hour days each week. Such an outcome would be anomalous and could not have been intended by the parties. 2. Prior to the introduction of the 38 hour week, for employees working a 40 hour week of five 8 hour days, 15 days' paid sick leave equated to three weeks or 120 hours. With the reduction from a 40 hour week to a 38 hour week, 15 days' paid sick leave equated to 114 hours (15 x 7.6 hours). Whilst this number of paid sick leave hours is not expressly stated in the CFO or the CEO Awards, it is in a number of other significant public sector awards. 3. For example, the Operational Ambulance Officers (State) Award contains the following provision: 36. Sick Leave (a) If the Service is satisfied that an employee is unable to perform his or her duties on account of illness, not attributable to the employee's misconduct, it shall grant to such employee leave of absence on full pay for a period or periods as follows: (i) All employees shall be entitled to sick leave for a period or periods not exceeding in the aggregate 114 hours in any period of 12 months. (ii) Sick leave hours will be deducted at a rate equal to the length of the shift for which the employee was rostered ie sick leave hours will be deducted for the equivalent number of ordinary hours that would otherwise have been worked. (iii) In the event of an employee not taking the full period of 114 hours in any period of 12 months, the untaken period of such leave shall accumulate. A maximum of 76 hours of the untaken hours in each period of 12 months shall accumulate in respect of available sick leave which accumulated prior to 20 June 1980. (iv) Periods of less than 38 hours shall not be re-credited to employees who are sick whilst on annual leave or long service leave. 1. Full-time employees covered by the Operational Ambulance Officers (State) Award work shifts of varying lengths, generally between 8 and 12 hours duration. Therefore, employees who work 12 hour shifts would exhaust their yearly sick leave entitlement after taking 9.5 shifts off sick (9.5 x 12 hours = 114 hours). Employees who work 8 hour shifts would exhaust their yearly sick leave entitlement after 14.25 shifts off sick (14.25 x 8 hours = 114 hours). This is the very situation that Mr Gounis, on behalf of the AWU, described in these proceedings as an "absurdity". 2. Regulation 126 of the Police Regulation 2015 contains the following provision: 126 SICK LEAVE ENTITLEMENTS (1) Sick leave on full pay accrues to a member of the NSW Police Force at the rate of 15 days each calendar year, and any such accrued leave which is not taken is cumulative. 1. Clause 20.4 of the Crown Employees (Police Officers – 2014) Award is as follows: 20.4 Sick Leave Entitlements 20.4.1 Sick leave on full pay accrues to an officer at the rate of 15 working days (114 working hours) each calendar year, and any such accrued leave, which is not taken, is cumulative. 20.4.2 Sick leave shall be debited in accordance with the ordinary hours the officer would have worked had they not been absent on sick leave. Provided further that a Commissioned Officer with an annual leave entitlement of 5 weeks (190 working hours) shall be debited 7.6 hours for each working day taken as sick leave. 20.4.3 Sick leave on full pay accrues at the beginning of the calendar year, but if an officer is appointed during a calendar year, sick leave on full pay accrues on the date the officer commences duty at the rate of one and a quarter working days (9.5 working hours) for each complete month before the next 1 January. 1. For police officers, their entitlement to 15 days' paid sick leave each year equates to 114 hours as is the case with ambulance officers. Police officers can also work shifts of 12 hours duration, in which case any shift not worked due to illness would result in a 12 hour debit from the officer's yearly sick leave entitlement of 114 hours. Such entitlement would be fully exhausted after 9.5 shifts not worked due to illness. For officers working 8 hour shifts, their yearly sick leave entitlement would be exhausted after taking 14.25 shifts off sick, the same outcome as for ambulance officers. 2. I see nothing absurd or incongruous in a situation where CFOs working 8 hour days have an annual sick leave entitlement of 15 days of 7.6 hours or 114 hours in total. Before the introduction of the 38 hour week, 15 days equated to 120 hours. Following the introduction of the 38 hour week, 15 days equates to 114 hours. For CFOs working 8 hour days, a day off sick should result in an 8 hour debit from their annual sick leave entitlement of 114 hours with 0.4 of an hour notionally accruing to their RDO. I am of the opinion that this outcome reflects the intention of the sick leave provisions in both the CFO Award and the COE Award. Extended or long service leave 1. Contrary to the submission of the AWU, the entitlement of CFOs to extended or long service is not derived from the Long Service Leave Act 1955 but from the Government Sector Employment Regulation 2014 as is stated at clause 70 Extended Leave, of the COE Award. Prior to the introduction of the 38 hour week, the entitlement to extended leave for public servants was set out in section 120 of the Public Service Act 1979, the relevant part of which was as follows: EXTENDED LEAVE 120. (1) Subject to this section, an officer is entitled — (a) after service for 10 years, to leave for 2 months on full pay or 4 months on half pay; and (b) after service in excess of 10 years, to — (i) leave pursuant to paragraph (a); and (ii) in addition, an amount of leave proportionate to his length of service after 10 years, calculated on the basis of 5 months on full pay, or 10 months on half pay, for 10 years served after service for 10 years. 1. With respect to extended leave, the quantum of the entitlement as it was under section 120 of the Public Service Act 1979 is the same as the quantum of the entitlement presently provided for in clause 2 of Schedule 1 to the Government Sector Employment Regulation 2014, being two months after ten years of service and five months for each ten years of service after that. As with recreation leave and sick leave, the quantum of the entitlement did not change as a result of the introduction of the 38 hour week. 2. Part A, clause 2 Long Service Leave, of the UL Conditions quantifies one month of long service leave as being equal to 22 working days. Consistent with the approach adopted above in relation to recreation leave and sick leave, a "working day" of long service leave equates to 7 hours for a 35 hour per week worker or 7.6 hours for a 38 hour per week worker such as a CFO. For such a worker, one month of long service leave will equate to 167.2 hours (22 x 7.6 hours). 3. When a day of long service leave is taken by a CFO, such day will, in accordance with clauses 10.1 and 12.1 of the CFO Award, be regarded as a day of 8 hours with 0.4 of an hour notionally accruing to the RDO. Public Holidays 1. I make no determination in relation to public holidays. Employees do not have an accrued entitlement to public holidays as they do with the other forms of leave discussed above. When a public holiday falls on a normal working day, under clause 13.8 of the CFO Award, payment, to the extent which would ordinarily have been paid had the day been a working day, shall be made for public holiday. Neither the CFO Award nor the COE Award appear to deal with the issue of public holidays falling on an employee's RDO, except in the case shift workers (see clause 87.6.2 of the COE Award). CFOs are not shift workers and neither party addressed me on this issue. Determination 1. The approach adopted by the AWU in this matter of regarding the entitlement to the number of days of leave, whether it be recreation leave (20 days per year), sick leave (15 days per year) or long service leave (22 days for each month of leave accrued) as remaining the same both before and after the introduction of the 38 hour week and RDOs, with each day of leave still comprising 8 hours, would, if accepted, increase the leave entitlements of CFOs in a manner that was never intended as a consequence of the reduction of the average weekly working hours from 40 to 38. Such an outcome could properly be characterised as one of those situations which "fall accidently within the words of an award" (see Cepus v Heggies Transport). 2. Pursuant to section 175 of the Act, I make the following determinations: (1) Clauses 10.1 and 12.1 of the Crown Employees Conservation Field Staff Officers, (Department of Industry, Skills, and Regional Development and NSW Office of Environment and Heritage) Reviewed Award 2015 ("CFO Award") provide that for each day of recreation or annual leave taken by an employee, their leave entitlement of 20 days or 152 hours per year should be debited by 8 hours with 0.4 of an hour notionally accruing to the employee's RDO. (2) Clauses 10.1 and 12.1 of the CFO Award provide that for each day of sick leave taken by an employee, their leave entitlement of 15 days or 114 hours per year should be debited by 8 hours with 0.4 of an hour notionally accruing to the employee's RDO. (3) Clauses 10.1 and 12.1 of the CFO Award provide that for each day of extended or long service leave taken by an employee, their leave entitlement of 22 working days or 167.2 hours for each month of long service leave accrued should be debited by 8 hours with 0.4 of an hour notionally accruing to the employee's RDO. Recommendation 1. Pursuant to subsection 136(1)(a) of the Act I make a recommendation that the parties to this dispute, the AWU and the Department, accept and comply with the determinations set out immediately above. John Murphy Commissioner ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 13 April 2018