Under the National Employment Standards (NES), and most modern awards, a “shiftworker” is entitled to receive an additional week of paid annual leave for each year of service with his or her employer. An employee will be considered a shiftworker if he or she ‘regularly works on Sundays and public holidays’. But what does that mean? What is “regular” for these purposes? Industrial tribunals have set a threshold number of Sundays and public holidays that an employee must work in order to meet the requirement of performing regular work. The threshold has, despite a relatively consistent theme, varied in different decisions. The industrial tribunals have also been quick to state that any threshold is only relevant to the particular award or industry, leaving considerable uncertainty.

The Fair Work Commission (FWC)’s decision in O'Neill v Roy Hill Holdings Pty Ltd [2015] FWC 2461 (10 April 2015) clarifies the threshold that an employee must satisfy in order to “regularly” work on Sundays and public holidays within the meaning of section 87(3)(a)(iii) of the Fair Work Act 2009 (Cth) (FW Act). The threshold was previously unclear, with earlier decisions declining to set a “Commission standard”,[1] instead showing a tendency to limit the threshold to a particular award or industry. The FWC’s recent decision is not qualified in any such terms. According to the decision, an employee must work at least 34 Sundays and 6 public holidays over the course of a year in order to qualify for the additional week's annual leave.

This is an important decision for employers, particularly in light of the challenging economic conditions facing companies involved in, or reliant on, the resources industry and their compelling need to reduce and contain labour costs.

BACKGROUND

Roy Hill Holdings Pty Ltd (Roy Hill) employs Elizabeth O’Neill (O’Neill) as a supervisor in its Remote Operations Centre, which is located within Roy Hill’s head office in Perth. O’Neill works on a roster system in an enterprise in which shifts are continuously rostered 24 hours a day for 7 days a week. O’Neill receives an annualised salary and four weeks of paid annual leave for each year of service with Roy Hill.

On 10 September 2014, O’Neill made an application for the FWC to deal with a dispute under section 739 of the FW Act. The parties agreed to vary O’Neill’s terms and conditions of employment to include a term allowing the FWC to arbitrate under sections 738(c), 739(4) and 739(6) of the FW Act.[2] Commissioner Williams was satisfied that O’Neill is an award/agreement-free employee, and that the FWC had jurisdiction to deal with the dispute.[3]

The dispute concerned O’Neill’s entitlement to annual leave under section 87 of the FW Act. Section 87(1) of the FW Act relevantly provides that an employee is entitled to 5 weeks of paid annual leave if the employee qualifies for the shiftworker annual leave entitlement under section 87(3). Section 87(3) provides that an award/agreement-free employee qualifies for the additional week’s annual leave entitlement for shiftworkers if the employee:

  • is employed in an enterprise in which shifts are continuously rostered 24 hours a day, 7 days a week;
  • is regularly rostered to work those shifts; and
  • regularly works on Sundays and public holidays.

SUBMISSIONS

Roy Hill accepted that O’Neill:

  • is employed in an enterprise in which shifts are continuously rostered 24 hours a day for 7 days a week; and
  • is regularly rostered to work those shifts.

The issue was whether O’Neill ‘regularly works on Sundays and public holidays’ within the meaning of section 87(3)(a)(iii) of the FW Act. Commissioner Williams found that O’Neill will, under the current roster, work a maximum of 33 Sundays in a year, and an average of 31.25 Sundays and 6 public holidays per year.

O’Neill argued that this amounts to regularly working on Sundays and public holidays, relying on the New South Wales Industrial Commission’s decision in Re Hospital Employees Conditions of Employment (State) Award [1976] AR 275 (1976 Annual Leave Case), which applied a discount to the “34 and 6” threshold in order to allow for ‘vagaries in particular rosters and for unavoidable absences from duty’.[4]

Roy Hill argued, in reply, that the words ‘regularly works on Sundays and public holidays’ in section 87(3)(a)(iii) of the FW Act take their meaning from industrial decisions going back several decades.[5] Roy Hill submitted that industrial decisions have, with limited and distinguishable exceptions, applied a 34 Sundays threshold (having the effect that an employee must work at least 34 Sunday shifts over the course of a year in order to qualify for the additional week’s annual leave).[6]

THE DECISION ON THE TERM 'REGULARLY WORKS ON SUNDAYS AND PUBLIC HOLIDAYS'

Commissioner Williams of the FWC held that O’Neill does not ‘regularly’ work on Sundays and public holidays and, therefore, is not entitled to the shiftworker annual leave entitlement under section 87(3) of the FW Act (being 5 weeks of paid annual leave in accordance with section 87(1)(b)(iii)).[7]

Commissioner Williams had regard to various industrial decisions in reaching his conclusion.[8] He quoted, among other things, the following passage from the AIRC decision in Theatrical Employees:

On the arbitral decisions before us a number of industries, particularly in the NSW jurisdiction, have defined 7-day shift workers "regularly working on Sundays" as employees who work 34 ordinary shifts on Sundays (that is excluding overtime shifts): in some decision provision is made for a pro rata entitlement for other employees who are not 7-day shift workers to ensure equitable treatment.

The most expansive decision is the 1976 Annual Leave Case in which the NSW Industrial Commission established the formula for 7-day shift workers who work an "equal number of shifts on each of the seven days of the week": the resultant formula producing a requirement to work a minimum of 34 Sunday shifts and 6 public holidays – this test was accepted by both parties before us as an applicable guideline to apply to 7-day continuous shift workers.[9]

Commissioner Williams noted that the FWC is entitled to have regard to historical context to confirm the meaning of words in the FW Act.[10] He went on to hold, in line with Roy Hill’s submissions, that ‘an employee “regularly works on Sundays and public holidays” if they have worked at least 34 Sundays and 6 public holidays in a year.[11] Significantly, Commissioner Williams did not qualify his decision (as previous decisions had done) by leaving it for ‘another Full Bench, at another time in an appropriate case ... to determine what minimum standards should apply generally in awards of the Commission’.[12]

IMPLICATIONS FOR EMPLOYERS

This decision in O'Neill v Roy Hill Holdings Pty Ltd is an important one for employers that operate in an enterprise in which shifts are continuously rostered “24/7” (particularly in light of the challenging economic conditions facing companies involved in, or reliant on, the resources industry):

  • The decision confirms that an employee must work a minimum of 34 Sundays and 6 public holidays in a given year, in order to qualify for the shiftworker annual leave entitlement under section 87(3) of the FW Act. It adds considerable certainty for employers looking to avoid the economic burden of granting employees an additional week’s paid annual leave, both in direct costs and productivity terms.
  • In light of the decision, employers wishing to contain additional annual leave costs, should consider organising their roster system so that employees do not work more than 33 Sundays over the course of a year.
  • Further, while the decision specifically concerns the interpretation of section 87(3)(a)(iii) of the FW Act, it is possible that the decision will have broader application. In particular, it is likely that the decision will inform the meaning of similar provisions in modern awards, which also involve the concept of regularly working on Sundays and public holidays.