Once bitten, twice shy? Separate application of enterprise agreements to separate and distinct employment roles

Employment Law update - 28 June 2019

A recent Federal Court decision has held that an employee working in two "separate and distinct" part-time roles for the same employer was not entitled to over $195,000 of claimed backpay.

In Lacson v Australian Postal Corporation1, the Federal Court of Australia dismissed an appeal lodged by an Australia Post employee for a considerable sum of entitlements (overtime, rest relief and meal allowances) purportedly accrued over a four-year period.  In dismissing the appeal, Justice Mortimer held that the proper construction of section 52(2) of the Fair Work Act 2009 (Cth) (FW Act) permitted one enterprise agreement applying to two concurrent — but distinct — employment agreements entered into by the same parties.

Background

Mr Lacson was originally employed as a 'Postal Delivery Officer' (PDO Role), which involved sorting mail at Australia Post's Collingwood Post Office.  His hours of work in this role were between 6.00 am and 9.00 am, Monday to Friday.

Mr Lacson subsequently applied for and secured a permanent part-time 'Postal Services Officer' (PSO Role), where he sorted bulk parcels at Australia Post's Melbourne Parcel Facility.  Initially, his hours of work in this role were 3.00 pm to 7.00pm, though this was subsequently increased, at his request, to 3.30 pm to 11.30 pm.

Accordingly, for nearly four years, Mr Lacson would start his day sorting mail in the PDO Role at 6.00 am until 9.00 am in Collingwood.  He would then go home to rest until his shift in the PSO Role at the Melbourne Parcel Facility began at 3.30 pm and ended at 11.30 pm. 

The 2010 Australia Post enterprise agreement (and the replacement agreement in 2013) applied to both the PDO Role and the PSO Role.

Over an approximately four-year period:

  • Mr Lacson worked with less than a 10-hour break in between his shifts; and
  • any overtime was calculated only on the total hours he worked in the PSO Role and did not include his three-hour shift as a PDO Role in Collingwood.

It was this unusual mixture of facts that led Mr Lacson to later claim he was entitled to over $195,000 in unpaid entitlements.  The essence of his claim was that Australia Post failed to consider the hours of his multiple roles cumulatively in determining these entitlements. He claimed neither of the enterprise agreements allowed for multi-hiring arrangements and their proper construction supported a cumulative assessment.

The first Judgment

At first instance, Judge McNab of the Federal Circuit Court found that Australia Post did not breach the enterprise agreements in failing to aggregate the hours worked by the Appellant in his two "separate and distinct part-time positions which were obtained at separate times". Judge McNab held that the entitlements and hours of each role were separate, and Australia Post was right to not consider them in tandem.

What was the issue on appeal?

Mr Lacson appealed the decision and argued Judge McNab had incorrectly interpreted section 52(2) of the FW Act in failing to consider the PDO Role and the PSO Role as one "particular employment".  Such a construction would mean that Mr Lacson's two roles must be considered unified for the purpose of calculating his entitlements under the Australia Post enterprise agreement. 

Section 52(2) of the FW Act provides: "[a] reference in this Act to an enterprise agreement applying to an employee is a reference to the agreement applying to the employee in relation to particular employment" (emphasis added). 

Judge McNab had determined that "particular employment" captured separate and distinct roles or positions occupied by one employee in relation to the same employer.

"Particular employment" may cover two roles with one employer

Justice Mortimer carefully considered the terms of section 52(2) of the FW Act, its statutory and curial context, and the inferred purpose of the provision.  In particular, her Honour:

  • considered other provisions of the FW Act that used the phrase "particular employment";
  • considered other cases that construed the use of the phrase "particular employment" in the FW Act; and
  • referred to the explanatory memorandum accompanying section 52.

Ultimately, her Honour held that the proper construction of "particular employment" is to enable the precise identification of an employee's job or position at any given time.  This construction, in her Honour's view, was consistent with the text, context and purpose of the provision, as described above. 

As such, s 52(2) of the FW Act allows for one enterprise agreement to apply to two or more discernible jobs or positions occupied by the same employee at differing times.

In summing up her reasoning, Justice Mortimer referred to Mr Lacson's predicament as being, to some degree, self-imposed.  Her Honour observed that he:

"… found himself performing two different jobs, at two different locations, with two
different kinds of work, for one employer,
[and this] was a function of choices he had
made. It does not appear he made those choices believing, or having it represented
to him, that they would be treated as one job and he should secure the considerable
additional sums of money he is now seeking. Rather, he appears to have made those
choices on the basis … that he had two separate employment arrangements with Australia
Post, each one regulated separately by the enterprise agreements.
"

As a corollary, her Honour also considered that Australia Post acted with integrity and the dual-roles occupied by Mr Lacson were not a "device" implemented by it to underpay him.

Bottom line for employers:

  • Although somewhat obscured by the systematic and thorough doctrinal analysis undertaken by the Court, Justice Mortimer appears to have been influenced by the view that Mr Lacson was the instigator of his own demise — he had requested the additional overtime hours and applied for a second part-time role at Australia Post. 
  • Employers should still exercise caution in employing an employee in two (or more) part-time roles to ensure that such arrangements cannot be perceived as devices to avoid paying employees cumulative entitlements under their relevant modern award or enterprise agreement.  If care is not taken, this judgment leaves open the possibility that an employer could be exposed to a considerable backpay application by an affected employee.
  • Notwithstanding the unique facts and decision in this case, an employer is still likely to have difficulty in establishing that engaging an employee to do two jobs under a single instrument is not a device to avoid paying cumulative entitlements or a prohibition on split shifts. 
  • For such an arrangement to be legally available, the duties performed by the employee in each role should be sufficiently distinct (e.g. different classifications and rates of pay under the enterprise agreement) and each arrangement should be reflected in a separate employment contract.
  • Employers should familiarise themselves with the terms of any applicable modern award or enterprise agreement, particularly where those instruments contain clauses that require an employee to be classified (and paid) at the highest level of duties they perform or prohibit multi-hiring arrangements.

 

Further information


[2019] FCCA 511

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