In a significant decision for employers and bargaining parties, the Full Court has reaffirmed that the text of a modern award prevails over historical practice, with important implications for how public holidays and shift arrangements are applied.
In issue
- This Full Court decision concerns how key provisions of the Black Coal Mining Industry Award should be interpreted for the purposes of employee entitlements and enterprise bargaining.
The background
OS ACPM Pty Ltd (OS ACPM) is a labour hire contractor supplying workers to BHP coal mining operations in Queensland and New South Wales. During enterprise bargaining negotiations, a dispute arose between OS ACPM and the Mining and Energy Union (MEU) regarding the proper interpretation of provisions contained in the Black Coal Mining Industry Award 2020, and its predecessor, the Black Coal Mining Industry Award 2010.
The dispute centered on two key issues:
- public holidays: whether the Award required all employees collectively to have the same two public holidays off each year, or whether each employee could nominate different public holidays, and
- shift lengths: whether the Award imposed an absolute 10-hour cap on shifts, or whether employees could work shifts exceeding 10 hours where the additional hours were rostered and paid as overtime.
These issues carried broader significance because the interpretation of the Award directly affected the benchmark entitlements against which any proposed enterprise agreement would be assessed under the 'better off overall test' (BOOT).
The decision at trial
At first instance, the trial judge (Logan J) accepted the MEU’s interpretation of the Award.
In relation to public holidays, his Honour concluded that the Award required work to cease on two nominated public holidays each year. Accordingly, OS ACPM could not satisfy the Award by allowing different employees different public holidays.
As for shift lengths, the references to 'ordinary hours' in the Award were interpreted as referring to the total length of the shift. Accordingly, the Award effectively imposed a practical cap on shift length, such that shifts exceeding 10 hours were only permissible in limited circumstances.
The Full Court decision
The Full Court of the Federal Court (Raper and Shariff JJ; Dowling J dissenting in part) allowed OS ACPM’s appeal and overturned the trial decision.
On the issue of public holidays, the majority held that the Award required an employer to nominate two public holidays on which each employee will not work. However, those public holidays do not have to be the same for every employee. An employer may therefore operate a roster where different employees receive different nominated public holidays.
The Full Court emphasised that the 2020 Award contained an express definition of 'ordinary hours' and that such a definition must be given effect according to its terms. The Full Court unanimously held that the expression 'ordinary hours' bears its defined meaning in the Award; namely, hours paid at ordinary rates. It does not include rostered overtime. As a result:
- the 10-hour limitation applies only to ordinary hours
- shifts may exceed 10 hours where the additional hours are rostered overtime and paid at overtime rates, and
- the Award does not impose an absolute 10-hour cap on total shift length.
Central to the Court’s reasoning was the principle that the text of a modern award is paramount to its interpretation. The Court cautioned against excessive reliance on historical industrial practice. Importantly, the Court further held that the existence of a longstanding industrial practice prior to the making of a modern award does not, without support from the text or relevant extrinsic material, establish that the modern award was intended to preserve that practice.
Implications for you
The decision has implications extending well beyond the coal mining industry. Modern awards regulate the employment conditions of millions of Australian workers and routinely feature in enterprise bargaining negotiations, underpayment disputes and proceedings before the Fair Work Commission.
For employees, the decision reinforces that historical understandings and longstanding workplace practices will carry limited weight where they are inconsistent with the text of the applicable award. Employees seeking to rely upon established industry custom to support a particular entitlement may face greater difficulty where the language of the award points in another direction.
For employers, the decision highlights the importance of ensuring payroll practices and employment arrangements are supported by a defensible interpretation of the applicable award. Employers may find greater scope to rely on the ordinary meaning of award provisions, particularly where historical practice suggests a broader entitlement than is reflected in the text.
The decision is also likely to influence enterprise bargaining. As the BOOT requires a comparison between the terms of a proposed enterprise agreement and the relevant award, any clarification of award entitlements can materially affect whether an agreement satisfies the statutory test. The Full Court’s reasoning significantly limits the ability of parties to rely upon historical industrial practice or pre-modernisation materials to depart from the plain language of an award.
The decision represents an important reaffirmation that modern awards are to be construed primarily according to their language, rather than by reference to industrial history. For employers, employees and bargaining representatives, the case provides a timely reminder that the wording of the award remains paramount.
