By Charles Power

A recent Fair Work Australia decision has clarified shift worker provisions in the Manufacturing Modern Award (AMWU v Rheem Australia Pty Ltd [2011] FWA 7602). The decision concerned a dispute between a union and an employer about the transfer of employees from the afternoon to the day shift.

Here’s the background of the case:

A factory operated a day shift and an afternoon shift. In the face of a steady and continuing decline in the demand for some of the units produced at the factory, the company informed employees and the union that there were too many operators on the afternoon shift.

The union and the company agreed on a process to deal with the transfer of employees to the day shift. This process included consideration of the family, financial and other circumstances of relevant employees as well as their length of service. An appeal process could be accessed by aggrieved employees. The company agreed that four weeks’ notice would be given prior to the transfer becoming effective.

The union and the employees made it clear to the company that although they would cooperate with the process, the matter would remain in dispute if employees who were chosen to transfer did not agree to be transferred.

The company then provided formal written notice to 11 employees, stating that they would be required to transfer shifts and notifying them of the agreed process. The employees were also provided with a “hardship application form” if they wished to claim extenuating circumstances.

Approximately 30 employees were identified as candidates for possible transfer and approximately 30 hardship applications were made. Further meetings were held between the company and union representatives. Two employees volunteered to transfer shifts which left nine employees still required.

The company completed the assessment of the hardship applications and advised the nine selected employees. Each of these employees accessed their right to appeal. Following those appeals and personal interviews, some employees were removed from the selected list and were replaced with others.

This was done on the basis of perceived degrees of hardship.

The nine remaining employees were formally advised of their selection and the requirement to transfer shifts subject to the outcome of this matter.

The company decided that it would continue to operate day and afternoon shifts with unchanged starting and finishing times. The only changes would be to the numbers and identities of the employees on each shift, and the fact that the employees who were transferred to the day shift would not be entitled to retain their 15% afternoon shift loading.

Fair Work Australia’s Decision

FWA’s decision in this matter dealt with the clause in the Manufacturing Award regarding shift work.

Clause 36.5(a) of the Award provides that:

“Subject to the employer’s right to fix the daily hours of work for day workers from time to time within the spread of hours referred to in clause 36.2(c) and the employer’s right to fix the commencing and finishing time of shifts from time to time, the arrangement of ordinary working hours must be by agreement between the employer and the majority of employees in the enterprise or part of the enterprise concerned. This does not preclude the employer reaching agreement with individual employees about how their working hours are to be arranged.”

Paragraph (b) then sets out that agreement may be reached about:

• the way in which hours are arranged in a work cycle;
• the duration of the work cycle;
• rosters;
• periods of notice, substitution, accumulation and flexibility of rostered days off; and
• the arrangement of ordinary hours which exceed eight in any day.

Paragraph (c) permits majority agreement for the introduction of 12 hour days or shifts.

FWA interpreted the words “the arrangement of ordinary working hours” in clause 36.5(a) as relating to how various shifts are arranged and worked, not to the question of who is allocated to each one.

In other words, FWA ruled that the clause should not be interpreted to mean that an employee has to be defined as either a shift worker or a day worker. Instead, it considered that the question of which category an employee fits into depends on their work arrangements, not what they might be called (i.e. a shift worker or a day worker).

FWA observed that the Award did not expressly provide for the company to be able to transfer employees from afternoon shift to day work. However, it also ruled that unless the award actually prevented an employer from making changes to shift arrangements, an employer was entitled to alter both the pattern and structure of shifts and the particular shift worked by an employee.

FWA ruled that in this case the Award did not prevent the employer from transferring its employees from afternoon shift to day work.

FWA also found that the company had followed a fair and reasonable process in deciding which employees should be transferred. It recommended that while 4 weeks’ notice of transfer was reasonable, the company should give consideration to providing a period of at least two weeks before the change is implemented.

It should be noted that FWA did not consider – and was not required to consider – contractual restraints that may also limit an employer’s ability to make unilateral changes to an employee’s contract of employment. If an employer does make unilateral changes to a contract of employment, then an employee may attempt to argue that he or she has been unfairly dismissed as a consequence of being constructively dismissal.