Fair Work Act 2009
s.739 - Application to deal with a dispute

Enterprise agreement – dispute about matters arising under the Emergency Services Telecommunications Authority Operational Employees Enterprise Agreement 2015 – accrual of paid leave entitlements whilst on a period of workers’ compensation.

[1] On 7 February 2017, the United Firefighters Union of Australia (“the UFU”) lodged an application with the Commission pursuant to section 739 of the Fair Work Act 2009 (Cth) (“the FW Act”). On 7 March 2017, the matter was listed for conference before Commissioner Harper-Greenwell. The dispute was unable to be resolved following the conference and the parties subsequently agreed to arbitrate the dispute. On 28 March 2017, Commissioner Harper-Greenwell’s chambers sent correspondence to the parties informing them that the matter would be referred to the Full Bench for hearing.

[2] The application relates to a dispute between the UFU and ESTA under clauses 28.1 and 33.1 of the Emergency Services Telecommunications Authority Operational Employees Enterprise Agreement 2015 (“the Agreement”). In particular, the parties agreed to have the following question arbitrated:

“Whether or not an employee under Emergency Services Telecommunications Authority Operational Employees Enterprise Agreement 2015 who is receiving workers’ compensation payments is entitled at the same time to accrue any leave of absence during the period of receipt by the employee of compensation payments.”

[3] On 21 April 2017, the UFU sent correspondence requesting that this matter be joined with matters C2016/5980 and C2017/591 involving the Australian Nursing and Midwifery Federation (“ANMF”) and Alfred Health, noting the similarities of the dispute between the parties in those matters. However, on 26 April 2017, Vice President Catanzariti’s chambers sent correspondence in reply to the parties informing them that the matters would not be formally joined; however, they would be heard together.

[4] We heard this matter on 15 June 2016 with the abovementioned matters. At the hearing, Mr E. White, of Counsel, sought permission to appear for the UFU. Mr J. Bourke QC and Mr G. McKeown, of Counsel, sought permission to appear for ESTA. Given the complexity of the matter and having regard to section 596 of the FW Act, permission was granted to both parties to be represented.

The Legislative Framework

[5] Section 739 of the FW Act provides as follows:

“Disputes dealt with by the FWC

(1) This section applies if a term referred to in section 738 requires or allows the FWC to deal with a dispute.

(2) The FWC must not deal with a dispute to the extent that the dispute is about whether an employer had reasonable business grounds under subsection 65(5) or 76(4), unless:

(a) the parties have agreed in a contract of employment, enterprise agreement or other written agreement to the FWC dealing with the matter; or

(b) a determination under the Public Service Act 1999 authorises the FWC to deal with the matter.

Note: This does not prevent the FWC from dealing with a dispute relating to a term of an enterprise agreement that has the same (or substantially the same) effect as subsection 65(5) or 76(4) (see also subsection 55(5)).

(3) In dealing with a dispute, the FWC must not exercise any powers limited by the term.

(4) If, in accordance with the term, the parties have agreed that the FWC may arbitrate (however described) the dispute, the FWC may do so.

Note: The FWC may also deal with a dispute by mediation or conciliation, or by making a recommendation or expressing an opinion (see subsection 595(2)).

(5) Despite subsection (4), the FWC must not make a decision that is inconsistent with this Act, or a fair work instrument that applies to the parties.

(6) The FWC may deal with a dispute only on application by a party to the dispute.”

[6] In relation to the above section, we note there is no dispute regarding the jurisdiction of the Commission to arbitrate the dispute.

[7] Clause 28.1 of the Agreement provide as follows:

“28 Annual Leave

28.1 Annual leave shall accrue at the rate of four weeks (152 hours) per annum for all Full-time Employees. For Shift Workers, annual leave shall accrue at the rate of five weeks (190 hours) per annum. Annual leave will accrue on a pro rata basis for all other Employees (other than casual Employees).”

[8] Clause 33.1 of the Agreement provides as follows:

“33 Personal/carer’s Leave

33.1 Subject to clause 39 (“Part-time Employment”) an Employee is entitled to 125.4 hours personal / carer’s leave per year in accordance with the provisions of sub-clauses 33.2 to 33.11 and the following general conditions:

33.1.1 in the first year of employment personal/carer’s leave will accrue and be credited on a pro-rata basis from commencement of employment. In the second and subsequent years, Employees will be credited with their full entitlements on the anniversary of the commencement of their employment;

33.1.2 personal / carer’s leave may be taken for part of a single day/shift;

33.1.3 unused personal / carer's leave shall be cumulative; and

33.1.4 entitlements to personal/carer’s leave are not subject to a cash payment on termination.”

The Submissions

UFU’s submissions dated 26 April 2017

[9] The UFU had regard to clauses 28.1 and 33.1 of the Agreement. In this regard, the UFU contended that the Agreement does not exclude an employee who is receiving workers compensation payments from the entitlement to accrue either annual or personal leave. In accordance with Australasian Meat Industry Employees Union v Golden Cockerel 1 (“Golden Cockerel”), the UFU submitted that the Agreement has a plain meaning with respect to the dispute. Further, the UFU asserted that there was no evidence that the leave provisions in the Agreement are intended to reflect or be read consistently with the National Employment Standards (“NES”). In this regard, the UFU posited that the NES are not incorporated or otherwise referred to in the annual or personal leave clauses within the Agreement. The UFU submitted that the clauses dealing with annual leave and personal leave under the Agreement supplement employee entitlements to annual leave under the NES.

[10] The UFU adopted the submissions of the ANMF dated 9 March 2017 in matters C2016/5980 and C2017/591 at paragraphs [17]-[23], which we have considered and will not repeat for the purposes of this Decision. The UFU also had regard to the decision in WorkPac Pty Ltd v Bambach 2 (“Bambach”) and noted that this decision provided that a compensation period did not fall within the exclusion from the definition of service for an “unpaid authorised absence” contained in section 22(2) of the FW Act.

[11] The UFU contended that, in the event that the Commission accepts that the Agreement provides a separate entitlement to annual leave, the Agreement provisions would apply and it may not be necessary to consider whether an entitlement exists under the NES. However, if this is not accepted, the UFU submitted that employees engaged under the Agreement would be entitled to accrue annual leave under the NES during the period where they are absent from work and receiving workers compensation.

[12] The UFU also adopted the submissions of the ANMF dated 9 March 2017 in matters C2016/5980 and C2017/591 at Part C, which we have considered and will not recite for the purposes of this Decision.

[13] The UFU also referred to the decision of the Full Federal Court in Anglican Care v NSW Nurses and Midwives’ Association 3 (“Anglican Care”). In this regard, the UFU asserted that Anglican Care suggested employees are not restricted from accruing paid leave under section 130(2) of the Act, so long as the course is “sanctioned, condoned or countenanced by the relevant compensation law.”

[14] For the above reasons, the UFU contended that the Commission should make a determination that employees covered by the Agreement are entitled to accrue both paid annual and personal/carer’s leave during periods that they are absent from work and in receipt of workers compensation payments.

ESTA’s submissions dated 31 May 2017

[15] ESTA had regard to entitlements to various forms of leave under the NES, in particular annual leave and person leave under sections 87 and 96 of the FW Act respectively. ESTA contended that the entitlement to accrue leave operates subject to section 130 of the FW Act, which was recognised in Bambach. In this regard, ESTA asserted that the effect of clause 130 of the Act is that an employee is not entitled to take or accrue any leave of the type provided to employees under Part 2-2 of the FW Act, unless an applicable State or Territory compensation law “permits” the taking or accrual of such leave.

[16] ESTA referred to Anglican Care and contended that each member of the Full Court was satisfied that section 49 of the Workers Compensation Act 1987 (NSW) (“the WC Act (NSW)”) did permit the accrual of leave for the purposes of section 130(2) of the FW Act. However, ESTA asserted that the joint judgment of Bromberg and Katzmann J and the decision of Jessup J attributed different meanings to the term “permitted”. In this regard, ESTA asserted that the Bromberg and Katzmann JJ held that a mere failure by the compensation law to address the situation will not amount to permission for the purpose of section 130(2) of the FW Act. Rather, ESTA submitted that the plurality held that in order for employees who are in receipt of workers compensation to retain their entitlements to leave, the outcome must be “sanctioned, condoned or countenanced” by the relevant compensation law. In this respect, ESTA noted that the plurality stated at [64]:

“While it is no longer sufficient that the compensation law does not prevent the simultaneous enjoyment of the two, it is not necessary that the compensation law provides for the payment of the leave benefit.”

[17] On the other hand, ESTA asserted that Jessup J adopted a broader approach in which he held that the word “permitted” in section 130(2) of the FW Act should be construed in the sense of “not prevented, prohibited or restrained”. 4

[18] ESTA then referred to section 49(1) of the WC Act (NSW). In this respect, ESTA asserted that, whilst it was not expressly stated in the joint judgment, it appears that the reference to employees being entitled to the simultaneous receipt of compensation and any “benefit” for holidays/annual leave was sufficient to countenance employees accruing annual leave during a workers compensation period.

[19] ESTA noted that the relevant compensation laws are the Accident Compensation Act 1985 (Vic) (“the AC Act (Vic)”) and the Workplace Injury Rehabilitation and Compensation Act 2013 (“the WIRC Act (Vic)”). ESTA noted that the relevant sections were 97 and 114 of the AC Act (Vic) and 174 and 185 of the WIRC Act (Vic) in determining whether these compensation laws “permit” the accrual of leave for the purpose of section 130(2) of the Act. In this respect, ESTA contended that nothing in any of these provisions contemplates employees accruing (as distinct from taking) leave during workers compensation periods. In this regard, ESTA asserted that these provisions are narrower than section 49 of the WC Act (NSW), which was the subject of consideration in Anglican Care. ESTA submitted that to permit the accrual of leave for the purpose of section 130(2) of the FW Act, the AC Act (Vic) and the WIRC Act (Vic) would need to “sanction, condone or countenance” such accrual. ESTA asserted that the AC Act (Vic) and the WIRC Act (Vic) do not do so.

[20] ESTA further contended that the above interpretation is reinforced by the Explanatory Memorandum that accompanied the Bill, which ultimately became the Accident Compensation Amendment Act 2010 (Vic). ESTA asserted that, consistent with there being no reference in the AC Act (Vic) or the WIRC Act (Vic) to employees accruing leave during workers compensation periods, there is no reference in the Explanatory Memorandum to any intention to permit the accrual of leave during workers compensation periods. In these circumstances, ESTA contended that there is no basis to conclude that the accrual of leave during workers compensation periods is permitted by either the AC Act (Vic) or the WIRC Act (Vic) for the purpose of section 130(2) of the FW Act.

[21] Further, ESTA asserted that, in dealing with the interaction of compensation payments and leave, the above Victorian workers compensation legislation is restricted to annual leave and long service leave. In this regard, ESTA submitted that the Victorian legislature considered what other categories of leave can be taken by a worker in receipt of compensation payments and personal leave was intentionally excluded from the relevant provisions. Therefore, ESTA posited that there is no basis to import by implication the additional category of personal leave into the relevant provisions of the Victorian workers compensation legislation.

[22] ESTA had regard to clauses 28.1 and 33.1 of the Agreement and contended that these clauses are broad descriptions of employees’ entitlements to accrue a specified amount of leave per annum. In this regard, ESTA asserted that these clauses are intended to be read together with the applicable provisions in the NES (including section 130 of the FW Act) and are not intended to displace the framework that applies to the accrual of leave under the NES and, in fact, appear to assume the continued operation of that framework. ESTA asserted that this construction is supported by the following factors:

1. The broad terms in which the entitlement to accrue specified leave is expressed in the Agreement is indicative of an intention that the provisions be read together with the NES rather than displacing the provisions of the NES;

2. The construction contended by the UFU would result in employees being entitled to accrue leave in a range of circumstances in which they would not ordinarily accrue annual leave under the NES on the basis that the accrual of annual leave during those periods is not expressly excluded by the Agreement;

3. ESTA’s construction is consistent with the practice adopted by the ESTA in relation to the application of the equivalent provision in the enterprise agreement which preceded the Agreement (that is, employees did not accrue leave during workers compensation periods under the previous agreement); and

4. That the parties did not have any intention to give clauses 28.1 and 33.1 of the Agreement a meaning that departed from past practice is consistent with the way in which this dispute has arisen. In particular, prior to Anglican Care, there was no suggestion that the Agreement independently provided for the accrual of leave during such periods. This history is reflective of the fact that the Agreement in fact does not provide for the accrual of leave during the periods in issue.

[23] For the above reasons, ESTA contended that the leave provisions in the Agreement are to be read together with applicable provisions in the NES (including section 130 of the FW Act) and are not intended to displace the framework that applies to the accrual of leave under the NES. Further, ESTA asserted that the application of section 130 of the FW Act to the AC Act (Vic) and the WIRC Act (Vic) does not create an entitlement to the accrual of annual personal leave during workers compensation periods. Therefore, no such entitlement arises under the Agreement.

UFU’s submissions in reply undated (received 13 June 2017)

[24] The UFU asserted that ESTA’s contention in relation to the operation of section 130 of the FW Act is fundamentally flawed. In this regard, the UFU contended that the right to accrue annual leave (and the other rights associated with the taking thereof) are provided for in clause 28 of the Agreement. As such, the UFU posited that the limitations, such as they are in section 130, are of no application in this matter.

[25] Further, the UFU submitted that, even if ESTA was correct in its submissions in respect of the operation of the NES with the Agreement, the operation of section 130 is, in any event, excluded. The UFU noted that the NES is defined by section 61(3) of the FW Act which provides that “Divisions 3-12 constitute the national employment standards”. In this respect, the UFU asserted that section 130 does not appear within Divisions 3-12 of Part 2-2 of the FW Act.

[26] Moreover, the UFU highlighted ESTA’s contention that the Agreement espouses an intention that the Agreement be read together with the NES and not to displace the provisions of the NES. The UFU noted that, as to annual leave, the Agreement is silent in respect of this matter. In this regard, the UFU contended that, if the parties had intended that the NES or parts thereof be included in the Agreement regarding annual leave, specific provision could have been made. Further, the UFU submitted that the parties did include aspects of the NES in the Agreement in respect of other matters. In particular, the UFU had noted clause 6 of the Agreement defines the NES referable to the FW Act and that clauses 31 and 49 dealing with parental leave and settlement of disputes respectively refer specifically to the NES. The UFU posited that it is clear from the terms of the Agreement that in respect of some matters, the parties intended for the NES to have operation. In this respect, the UFU submitted that, by direct corollary, where there is no specific like provision in respect of other clauses, it is clear the parties had a different intention.

[27] The UFU also highlighted ESTA’s contention that it is inherently unlikely that the parties would have intended leave to accrue solely by the passing of time and not the rendering of service. In this respect, the UFU asserted that the entitlement to annual leave under the NES arises under Division 6 Part 2-2 of the FW Act and provision is made for the accrual of annual leave during periods of service.

[28] The UFU asserted that ESTA’s contention that its construction is consistent with past practice is misguided. The UFU submitted that the words need to be interpreted consistently with the principles of construction discussed in Golden Cockerel. In this regard, the UFU posited that it is not a principle of construction that the conduct of a party (or indeed parties) prior to the making of the agreement is determinative of prospective operation of the Agreement.

[29] The UFU further contended that ESTA misconstrued the decision in Anglican Care. The UFU submitted that the relevant provisions of the AC Act (Vic) and the WIRC Act (Vic) deal with the question of annual leave during compensation periods. In this respect, the UFU asserted that annual leave can only be taken if an entitlement has accrued. That is, an entitlement to take leave pre-supposes accrual. The UFU contended there is no distinction drawn in the AC Act (Vic) or the WIRC Act (Vic) between past or future accrual. Further, the UFU posited that, in the same way as section 49 of the WC Act (NSW) was held by the plurality in the Anglican Care as averting to the situation or sanctioning, condoning or countenancing the situation, so too do the equivalent provisions in the Victorian legislation.

Alfred Health’s & ESTA’s supplementary submissions dated 19 June 2017

[30] On 16 June 2017, Alfred Health and ESTA sent correspondence to the Commission in relation to the separate matters referred to above at [3], requesting leave to file a brief submission in relation to the meaning of “payable” as referred to by Counsel for the ANMF at the hearing on 15 June 2017. On 19 June 2017, the Commission sent correspondence in reply notifying Alfred Health and ESTA that the Full Bench had acceded to its request and to file and serve its submissions. Noting Alfred Health and ESTA adopted the same submissions, we summarise those submissions from ESTA’s perspective as follows.

[31] ESTA contended that an entitlement is only “payable” if the liability to pay it has already accrued. In this regard, ESTA submitted that to suggest the reference to “payable” is to countenance the accrual of annual leave in the future is to read something into the word that is simply not there. ESTA asserted that the UFU seek to read the word “payable” in isolation, ignoring its reference to section 97(1)(d) of the AC Act (Vic). ESTA posited that this error is compounded by failing to recognise that something is not payable unless a liability has first accrued and the UFU’s submission should be rejected.

Consideration

Is the Agreement ambiguous and does it restrict employees from accruing leave whilst in receipt of workers compensation?

[32] The approach to be taken in interpreting industrial instruments was set out in the Full Bench decision of Golden Cockerel. At [41] of the Decision, the Full Bench outlined ten principles for the interpretation of enterprise agreements as follows:

“From the foregoing, the following principles may be distilled:

1. The AI Act does not apply to the construction of an enterprise agreement made under the Act.

2. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or contains an ambiguity.

3. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.

4. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.

5. If the language of the agreement is ambiguous or susceptible to more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement.

6. Admissible evidence of the surrounding circumstances is evidence of the objective framework of fact and will include:

(a) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;

(b) notorious facts of which knowledge is to be presumed;

(c) evidence of matters in common contemplation and constituting a common assumption.

7. The resolution of a disputed construction of an agreement will turn on the language of the Agreement understood having regard to its context and purpose.

8. Context might appear from:

(a) the text of the agreement viewed as a whole;

(b) the disputed provision’s place and arrangement in the agreement;

(c) the legislative context under which the agreement was made and in which it operates.

9. Where the common intention of the parties is sought to be identified, regard is not to be had to the subjective intentions or expectations of the parties. A common intention is identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement.

10. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.”

[33] However, the recent decision in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Berri Pty Limited 5 (“Berri”) has modified the approach to construing enterprise agreements previously adopted in Golden Cockerel. In Berri, the Full Bench held at [114] that:

“The principles relevant to the task of construing a single enterprise agreement may be summarised as follows:

1. The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. Context might appear from:

(i) the text of the agreement viewed as a whole;

(ii) the disputed provision’s place and arrangement in the agreement;

(iii) the legislative context under which the agreement was made and in which it operates.

2. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties. 

3. The common intention of the parties is sought to be identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to the subjective intentions or expectations of the parties. 

4. The fact that the instrument being construed is an enterprise agreement made pursuant to Part 2-4 of the FW Act is itself an important contextual consideration. It may be inferred that such agreements are intended to establish binding obligations. 

5. The FW Act does not speak in terms of the ‘parties’ to enterprise agreements made pursuant to Part 2-4 agreements, rather it refers to the persons and organisations who are ‘covered by’ such agreements. Relevantly s.172(2)(a) provides that an employer may make an enterprise agreement ‘with the employees who are employed at the time the agreement is made and who will be covered by the agreement’. Section 182(1) provides that an agreement is ‘made’ if the employees to be covered by the agreement ‘have been asked to approve the agreement and a majority of those employees who cast a valid vote approve the agreement’. This is so because an enterprise agreement is ‘made’ when a majority of the employees asked to approve the agreement cast a valid vote to approve the agreement. 

6. Enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, however the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided and consequently some general principles of statutory construction may have less force in the context of construing an enterprise agreement. 

7. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning. 

8. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists. 

9. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement. 

10. If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstances will be admissible to aide the interpretation of the agreement. 

11. The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform and the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.
12. Evidence of objective background facts will include:

(i) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;

(ii) notorious facts of which knowledge is to be presumed; and

(iii) evidence of matters in common contemplation and constituting a common assumption.

13. The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement. 

14. Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was. 

15. In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But such post-agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.”

[34] We have adopted the modified approach outlined in Berri in construing the enterprise agreements before us.

[35] As stipulated in Berri, the starting point for interpreting an enterprise agreement is to have regard to the ordinary meaning of the words used. Further, the text must be interpreted in the context of the agreement as a whole. Principles 7 and 10 elicited in Berri emphasise that ambiguity in a provision within an enterprise agreement must be identified before one is to have regard to evidence of the surrounding circumstances. However, principle 8 makes it clear that, in determining whether ambiguity exists, one may have regard to evidence of the surrounding circumstances. That is, such evidence can be used to identify and resolve any ambiguity.

[36] We note that sections 55 and 56 of the FW Act relate to the interaction between the NES and an enterprise agreement. In particular, section 55(1) states:

“A modern award or enterprise agreement must not exclude the National Employment Standards or any provision of the National Employment Standards.”

[37] In this regard, we note that under clause 6 of the Agreement, NES is defined as “the National Employment Standards in the FW Act.”

[38] ESTA contended that clauses 28.1 and 33.1 of the Agreement, in particular, should be interpreted as being intended to be read together with the applicable in provisions in the NES (including section 130 of the FW Act) and not to displace the framework that applies to the accrual of leave under the NES. We do not agree that section 130 of the FW Act forms part of the NES. Section 130 is not a “condition of employment” provided for in the NES, rather, it is a miscellaneous provision. In this regard, section 61 of the FW Act specifically states that the NES are the ten minimum standards outlined in Divisions 3 to 12 of Part 2-2 of the FW Act. Noting this, we are not satisfied that section 130 is caught by the Agreement.

[39] In light of the above principles elicited in Berri, we are not satisfied that the Agreement is ambiguous. In this respect, as section 130 of the FW Act is not caught by the Agreement, we are not satisfied that the Agreement imposes a restriction on taking or accruing leave whilst in receipt of workers compensation.

Was there a common understanding between the parties?

[40] Having found there is no ambiguity in the Agreement, the issue of a common understanding does not arise. Nevertheless, we note ESTA’s reliance on the statement of Mr Anthony Merrett to establish there was a common understanding between the parties that employees were not entitled to accrue leave during workers compensation periods. In this regard, Mr Merrett stipulated at paragraph 13 of his statement that “the above approach is not a new position being adopted by ESTA, but was a practice that had been adopted by ESTA for many years” in asserting that parties commonly understood this practice. However, in our view, Mr Merrett’s reference to the above being a longstanding past practice and his reliance on Mr Todd Delahunt’s view to corroborate this is not persuasive. That is, Mr Merrett does not allude to any direct evidence of such past practice that would persuade us to form the view that employees were not entitled to accrue leave during workers compensation periods.

[41] Moreover, we note paragraph 14 of Mr Merrett’s statement outlines that the accrual of leave during workers compensation periods was not a previous issue raised by the parties or during the bargaining for the Agreement. However, we note the following excerpt from the extract in Berri outlined above:

“Post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.”

[42] On ESTA’s own evidence, at paragraph 14 of Mr Merrett’s witness statement, reliance was placed upon absence of a complaint in relation to the accrual of leave. As such, this evidence is insufficient to establish a common understanding in accordance with Berri.

[43] Noting the above, we are not satisfied that Mr Merrett’s statement can be utilised to establish there was a common understanding between the parties as the evidence sought to be tendered lacks probative value. Consequently, we are of the view that Mr Merrett’s statement is inadmissible.

Are employees permitted to take or accrue annual leave and personal leave whilst in receipt of workers compensation under the Victorian workers compensation legislation?

[44] Having been satisfied that the Agreement does not impose a restriction on an employee taking or accruing leave whilst in receipt of workers compensation, we now turn to consider whether employees are permitted to take or accrue annual leave and personal leave while in receipt of workers compensation under section 130 of the FW Act pursuant to the Victorian workers compensation legislation.

[45] We note that employees’ entitlement to take or accrue annual leave and personal leave whilst in receipt of workers compensation is dependent on their “service” with ESTA. In this regard, there was no dispute between the parties as to the definition of “service”, which is outlined in section 22 of the FW Act. That is, when an employee is in receipt of workers compensation, that employee is deemed to be performing “service” in accordance with the FW Act.

[46] Section 130 of the FW Act imposes a restriction on taking or accruing leave or absence while receiving workers compensation:

“Restriction on taking or accruing leave or absence while receiving workers' compensation

(1) An employee is not entitled to take or accrue any leave or absence (whether paid or unpaid) under this Part during a period (a compensation period) when the employee is absent from work because of a personal illness, or a personal injury, for which the employee is receiving compensation payable under a law (a compensation law) of the Commonwealth, a State or a Territory that is about workers’ compensation.

(2) Subsection (1) does not prevent an employee from taking or accruing leave during a compensation period if the taking or accruing of the leave is permitted by a compensation law.

(3) Subsection (1) does not prevent an employee from taking unpaid parental leave during a compensation period.”

[47] Thus, we must determine whether section 130 of the FW Act permits an employee to take or accrue annual leave and personal leave whilst in receipt of workers compensation pursuant to the relevant compensation laws.

[48] In accordance with section 130(2) of the FW Act and as alluded to in the parties’ submissions, the relevant compensation laws are the AC Act (Vic) and the WIRC Act (Vic). The question of whether section 130 of the FW Act permits employees to take or accrue leave whilst in receipt of workers compensation pursuant to a relevant compensation law was dealt with in Anglican Care. In that case, the relevant compensation law was the WC Act (NSW).

[49] In particular, section 49 of the WC Act (NSW) states:

“49 Weekly compensation payable despite holiday pay etc

(1) Compensation is payable under this Division to a worker in respect of any period of incapacity for work even though the worker has received or is entitled to receive in respect of the period any payment, allowance or benefit for holidays, annual holidays or long service leave under any Act (Commonwealth or State), award or industrial agreement under any such Act or contract of employment.

(2) The amount of compensation so payable is the amount which would have been payable to the worker had the worker not received or been entitled to receive in respect of the period any such payment, allowance or benefit.”

[50] In Anglican Care, it was held that an employee “is permitted by” section 49 of the WC Act (NSW) to take or accrue annual leave whilst absent from work and in receipt of compensation. In particular, we note that, in relation to the word “permitted” in section 130(2) of the FW Act, Jessup J found at [16] as follows:

“What this amounts to is that the word ‘permitted’ in s 130(2) of the FW Act should be construed in the sense of not prevented, prohibited or restrained.”

[51] However, the plurality judgment of Bromberg and Katzmann JJ held at [64] that:

“The purpose of s 130(2) is to enable employees who are absent from work and in receipt of compensation to retain their entitlements to leave over the same period as long as that course is sanctioned, condoned or countenanced by the relevant compensation law. Put another way, employees in this position are entitled to both compensation and leave benefits provided that permission is given by the compensation law for dual receipt. While it is no longer sufficient that the compensation law does not prevent the simultaneous enjoyment of the two, it is not necessary that the compensation law provides for the payment of the leave benefit.”

[52] Further, at [65] Bromberg and Katzmann JJ held:

“But s 130 of the FW Act does not require that the source of the entitlement be found in the compensation law in order for an employee to be able to enjoy the benefit of both compensation and leave over the same period. The purpose and effect of s 130 is to remove the entitlement to take or accrue leave for employees in receipt of workers compensation unless there is a law relating to compensation in the relevant jurisdiction which countenances the simultaneous receipt of workers compensation while the employee is absent from work.”

[53] Nevertheless, we note that the decision in Anglican Care was made in relation to the relevant compensation law in New South Wales. The matter before us involves the Victorian legislation referred to above. Thus, the question for determination before us is whether the Victorian workers compensation legislation is significantly different from the New South Wales legislation such to warrant a different conclusion to that reached in Anglican Care, which binds us.

[54] Sections 97(1)(d) of the AC Act (Vic) provides as follows:

“Provisions relating to the payment of compensation

(1) Except as provided in section 96, regard shall not be had, in respect of the entitlement to, or amount of, compensation under this Part, to any sum paid or payable—

…

(d) in lieu of accrued annual leave or long service leave.”

[55] Section 114(2D) of the AC Act (Vic) states:

“If the current weekly earnings of a worker are reduced because the worker is on paid annual leave or long service leave, the Authority or self-insurer must not, by reason only of that reduction, alter the amount of compensation in the form of weekly payments.”

[56] We note that these sections are effectively replicated in the WIRC Act (Vic) at sections 174(1)(d) and 185(4).

[57] ESTA contended that relevant provisions in the AC Act (Vic) and the WIRC Act (Vic) are distinguishable from section 49 of the WC Act (NSW) referred to in Anglican Care. In particular, ESTA asserted that in Anglican Care, the reference to employees being entitled to the simultaneous receipt of compensation and any “benefit” for holidays or annual leave was sufficient to countenance employees accruing annual leave during a workers compensation period. That is, ESTA contended that the reference to a “benefit” in the WC Act (NSW) broadens the provision, such that it is distinguishable from the Victorian workers compensation legislation. We do not agree with this submission. Section 49 of the WC Act (NSW) is limited to a payment, allowance or benefit paid in respect of the period referred to in subsection 49(2). However, section 97 of the AC Act (Vic) contains no such time limitation. Thus, in our view, section 97 confers a broader entitlement than that afforded by section 49 of the WC Act (NSW) by placing no time limitation upon which leave can be accrued. As a result, we are not satisfied that the reference to a “benefit for holidays” in section 49 of the WC Act (NSW) can be meaningfully distinguished from the phrase “payable … in lieu of accrued annual leave or long service leave” under section 97(1)(d) of the AC Act (Vic) and section 174(1) of the WIRC Act (Vic).

[58] ESTA also contended that section 97 does not countenance the accrual of leave. Specifically, it asserted that while the Victorian workers compensation legislation countenanced the “taking” of leave, there was no countenancing of the accrual of leave during the workers compensation period. 6 Further, ESTA asserted that to suggest that the reference to “payable” in section 97 is to countenance the accrual of annual leave in the future is to read something into the word that is simply not there.7

[59] We do not agree with these submissions. The term “payable” must be given its ordinary meaning. The Oxford Dictionary defines payable as “required to be paid; due.” The fact that a payment is “due” denotes that such payment is to occur at a future point in time. Further, as noted above, section 97 confers a broader entitlement by not placing restrictions on the time period in which leave can be accrued. Having regard to these factors, we are satisfied that section 97 countenances the accrual of leave. In this respect, we are not satisfied there is a material difference between these New South Wales and Victorian legislative provisions as both sanction, condone or countenance the accrual of leave.

[60] Further, we are not satisfied there is a significant difference between the New South Wales workers compensation legislation and the Victorian workers compensation legislation such as to warrant a departure from the general construction in Anglican Care that is binding upon us. As a result, we are of the view that, pursuant to section 130 of the FW Act, the Victorian workers compensation legislation permits the taking and accrual of leave. However, unlike the New South Wales legislation which was applicable in Anglican Care, we note the Victorian legislation, which was enacted after the commencement of section 130 of the FW Act, makes specific reference to annual leave and long service only. Noting this specific reference, we are satisfied that the Victorian legislature considered the categories of leave that could be accrued by an employee in receipt of workers compensation payments. As a result, we are of the view that personal leave was intentionally excluded from sections 97(1)(d) and 114(2D) of the AC Act (Vic) and sections 174(1)(d) and 185(4) of the WIRC Act (Vic).

[61] Thus, applying the construction of the plurality in Anglican Care which binds us, we are satisfied that an employee is permitted to take or accrue annual leave during a workers compensation period pursuant to section 130(2) of the FW Act and the Victorian workers compensation legislation. However, we are not satisfied that an employee is permitted to accrue personal leave whilst in receipt of workers compensation under the Victorian legislation.

Conclusion

[62] Employees of ESTA are permitted to take or accrue annual leave whilst in receipt of workers compensation payments pursuant to section 130(2) of the FW Act.

[63] ESTA is required to accrue employees’ annual leave entitlements for the periods in which they were in receipt of workers compensation pursuant to section 130(2) of the FW Act.

VICE PRESIDENT

Appearances:

E. White, of Counsel, for the UFU.
J. Bourke QC and G. McKeown, of Counsel, for ESTA.

Hearing details:

2017
Melbourne:
15 June.

 1   [2014] FWCFB 7447.

 2   [2012] FWAFB 3206.

 3   [2015] FCAFC 81.

 4   [2015] FCAFC 81, [16].

 5   [2017] FWCFB 3005.

 6   Transcript dated 15 June 2017, PN280.

 7   Alfred Health’s and ESTA’s Supplementary Submissions dated 19 June 2017, [3].

Printed by authority of the Commonwealth Government Printer

<Price code C, PR595755>