Interpreting awards and industrial instruments: it might seem fair but it ain't right

When the meaning of an industrial instrument is in dispute, an employer may confront a commission, regulator or union leaning towards an interpretation that appears 'industrially fair'.  Two recent decisions of the Federal Court of Australia confirm that the meaning of an award or agreement:

• is to be determined by the plain and ordinary meaning of the disputed words properly understood in their context;  and

• notions of fairness have no role to play in interpretation, particularly given that employers face penalties and back pay for a contravention.

"Transport" does not mean merely driving

We acted for Truck Moves Australia in Zader v Truck Moves Australia Pty Ltd [2016] FCAFC 83.   Truck Moves is in the business of having its employees drive unladen and pre-registered vehicles from one location to another.  The vehicles vary in size from cars to trucks and other vehicles.

The regulator and union (on behalf of Mr Zader) argued that Truck Moves was covered by the Road Transport and Distribution Award 2010.  We had consistently advised Truck Moves that its employees are award free.  We were right.

The dispute concerned whether Truck Moves was in the road transport and distribution industry.  To be in the industry, Trucks Moves' operations had to involve "the transport by road of goods, wares, merchandise, material or anything whatsoever".

The union argued that the truck being driven by Mr Zader is a good and by driving the truck he was transporting that good, the truck, by road.  The union argued that Mr Zader, "a truck driver", would be award free if he was not covered by the award and that could not have been intended.  The Court said "that outcome cannot dictate ... a meaning which [the words do] not bear".

The Full Court considered the word "transport" in the context of requiring the business to be involved in "the transport by road of goods" etc.  It said:

... it is not to the point that trucks may be goods or merchandise.  As mentioned above, so they may be, but the operation of moving them should, in our view, be regarded as “transport” only when they are being carried as such.  To regard a pre-registration truck being driven to the wholesaler’s premises  ... as goods or merchandise being transported would be, in our view, an awkward and unnatural understanding of the words used ...

Having regard to the phrase “transport by road of goods” the product being transported cannot be confused with the means by which such products are transported.  "The unregistered vehicles being delivered by Truck Moves cannot at one and the same time be both the product being delivered and the means by which delivery of the product is effected", the Court said.

A phone call after hours is not a "recall to work"

With the use of technology, like smart phones and tablets, employees who are rostered on call do not need to return to the workplace to deal with ad hoc matters.  After a quick call and a quick email, the employee has avoided the need to leave home and attend the workplace.

Many industrial instruments provide that an employee recalled to work is entitled to be paid for a minimum amount of hours (regardless of the time actually worked).  Payment may be at overtime rates.  Unless there is an 8 hour gap between finishing recall work and when they next start work, any work the next day is at overtime rates.

In Polan v Goulburn Valley Health [2016] FCA 440, the Federal Court was asked to determine if an employee, who was on call, was required to be paid these entitlements, like the minimum of 3 hours pay, for each time she took a call at home.  The effect would be a windfall for the employee for a small amount of time spent on calls.

The employer argued that as the employee was not required to physically attend the workplace, there was no recall to work.  The Federal Court disagreed saying:

While I accept it may be more common for a recall to involve a return to the workplace by an employee, that is really because most work performed by employees is still performed at an employer’s workplace. However, that is by no means always the case and there is no justification for imposing such a restriction on the construction of these industrial instruments.

The critical question was whether the employee was “recalled” to duty if she took a call at home and spent 5 minutes taking a call.  The Court said:

I do not consider that what the applicant was doing when she answered and made telephone calls in order to rearrange rosters, replace staff that needed to go on leave or arrange locums to attend at the hospital can properly be described as the applicant being recalled to duty.

... the applicant was required to be on-call “24/7” so that she could make such staffing arrangements as and when the need arose.  In recompense for her making herself available on-call, she was, in accordance with the relevant industrial instruments, paid an on-call allowance.  The purpose of that payment was ... to recognise the burden and inconvenience which attended the status of being available to perform duties as and when required, and at short notice.

The Court held that the employee was only entitled to be paid for the short periods she worked taking calls paid at the overtime rates (and not for 3 hours for 5 minutes work).

Conclusion

Part of the modern award four yearly review process is to explore redrafting awards in plain English.  Nevertheless, disputes as to the meaning of provisions will continue to arise.  Focus must be on the plain meaning of the provisions understood in context. 

Author: James Mattson