Fair Work interprets workers’ relevant award and employer's policy
The Fair Work Commission (FWC) recently dealt with a dispute between two workers and their employer, a laundry business, regarding the payment of shift rates for work performed on Mondays.
The workers, represented by the Construction, Forestry and Maritime Employees Union (CFMEU), argued that they were entitled to shift rates under the Dry Cleaning and Laundry Industry Award 2020 (Award) for all hours worked on Mondays, as they commenced their shift at 5:00 am instead of the usual 6:00 am start time.
The case revolved around the interpretation of the Award's provisions on shiftwork and whether the workers’ early start on Mondays constituted a "morning shift" as defined in the Award.
The FWC's decision in this matter aimed to clarify the application of shift rates and provide guidance on the distinction between shiftwork and overtime in the context of the Award.
The dispute arose when the employer failed to pay the workers the penalty rates prescribed in clause 25.5 of the Award, which the CFMEU claimed were applicable to the workers’ situation.
The workers had been employed by the laundry business for several years, working 38 hours per week from Monday to Friday. On Mondays, the workers commenced their shift at 5:00 am and finished at 1:06 pm, while from Tuesday to Friday, they started at 6:00 am and finished at 2:06 pm.
The work performed by the workers from 5:00 am to 6:00 am on Mondays involved setting up the work areas and preparing various machines and equipment for other employees who started at 6:00 am.
The payment received by the workers for their Monday shifts had varied over the years. From January 2017 to December 2021, the workers were paid overtime for the hour worked from 5:00 am to 6:00 am on Mondays and ordinary time for the rest of the day. However, from April 2023 to April 2024, the workers received a shift loading of 115% for all time worked on Mondays.
The workers, represented by the CFMEU, contended that they should be considered shiftworkers on Mondays because they commenced work before 6:00 am, which is the definition of a "morning shift - laundry" under clause 25.1(b) of the Award.
The union argued that the workers were entitled to the 115% shift loading under clause 25.3 and the non-consecutive shift penalty under clause 25.5, as the Monday morning shift did not continue for five successive days.
The employer, on the other hand, maintained that the workers were day workers and not shiftworkers. They argued that the workers’ early start on Mondays was merely an hour of overtime worked outside of the prescribed ordinary hours for day workers, which are from 6:00 am to 6:00 pm Monday to Friday under clause 14.1 of the Award.
The employer further contended that for an employee to be considered a shiftworker, there must be an identifiable "shift" as defined in the Award. They argued that the workers’ early start on Mondays did not constitute a shift, as it was not part of a structured system of work involving a group of employees working in relays.
The employer also stated that the work performed by the workers from 5:00 am to 6:00 am on Mondays was preparatory to day work and that there was no work that preceded the worker's early start, which supported the conclusion that the workers were day workers.
In determining whether the workers were entitled to shift rates for their work on Mondays, the FWC focused on the interpretation of the relevant clauses in the Award. The Commission emphasised the importance of ascertaining the objective meaning of the clauses and applying them to the facts of the case.
The FWC agreed with the employer that for an employee to be considered a shiftworker, there must be a "shift" as defined in the Award. The Commission rejected the employer's argument that a shift must necessarily involve a group of workers, stating that "a shift exists independently of an individual employee. However, that does not mean that a shift cannot be worked by a single worker. In small workplaces, it often is."
The Commission also noted that the existence of a shift at a particular workplace is "fundamentally a question of fact" and that "the principal evidence for the existence of a shift is the fact that there are employees who work it." The FWC further stated that the Award does not prevent an employee from working a combination of shiftwork and day work, and that the distinction between day work and shiftwork in the Award did not assist the employer's case.
After considering the evidence and the parties' arguments, the FWC concluded that the workers’ early start on Mondays constituted a "morning shift - laundry" within the meaning of clause 25.1 of the Award.
The Commission found that the workers’ regular and predictable 5:00 am start time on Mondays was "in keeping with a shift, rather than with hours worked outside of ordinary hours as overtime."
The FWC emphasised that "the proper designation of work under the Award does not depend on the label that the employer gives it. It depends on an objective examination of the facts."
The Commission also noted that the employer had previously treated the workers as shiftworkers on Mondays by paying them the 115% shift loading for the entire Monday shift.
In conclusion, the FWC determined that the workers were entitled to the shift rates prescribed in clauses 25.3 and 25.5 of the Award for all hours worked on Mondays. The Commission stated:
"I conclude that on Mondays the two employees work a 'morning shift - laundry' within the meaning of clause 25.1 of the Award, and that they are shiftworkers for the purpose of clause 25.3. Because that shift does not continue for 5 days, they are also entitled to the non-successive shift penalty in clause 25.5."
The decision provided clarity on the interpretation and application of the Award's provisions related to shiftwork and overtime. It emphasised the importance of examining the actual working arrangements and patterns of work when determining whether an employee is a shiftworker or a day worker.
The FWC's ruling in this case serves as a reminder for employers to carefully consider the provisions of the relevant modern award when establishing work schedules and determining the appropriate remuneration for their employees.
The decision also highlights the role of unions in advocating for workers' rights and ensuring that they receive their proper entitlements under the applicable industrial instruments.
