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23 October 2012 Payment for Standing By

By Laura Sowden, Solicitor


In Brief

Many industrial awards provide that employees are entitled to payment for "standing by" – ie periods of time where they are not at work but must be ready to be called in to work.

A recent Federal Court of Australia decision held that an employer owed four electricians for time "standing by" (Manildra Flour Mills (Manufacturing) Pty Limited v National Union of Workers [2012] FCA 1010).


The Facts

Manildra's flour mill operated 24 hours a day, 7 days a week.  There was a roster which nominated one of the mill electricians as the "after hours" electrician to be contacted by staff if something went wrong.  The question was whether the electricians were "standing by" when they were the "after hours" electrician.
Under the Milling Industry – General Award 1999 the employees were entitled to payment for time on standby:

25.3    Standing By
An employee required by the employer to hold in readiness for call back to work shall be paid standby time at ordinary award rates of pay from the time the employee is required to so hold in readiness until released by the employer from the requirement to.

Manildra claimed that the employees were not entitled to any standing by time as there had been no management directive requesting them to be on standby.

First Instance Decision – NSW Chief Industrial Magistrates Court

The Magistrate concluded that the evidence established:

that if a breakdown occurred it was the task of the electricians as maintenance electricians to attend at the mill if the maintenance fitters identified the problem as one that required an electrician to rectify the fault.i

The "after hours" electrician had to carry a pager and a mobile phone provided by Manildra so they could be contacted, had to remain within a certain distance of the mill and were not to drink alcohol in case they were called in to the mill.

The Magistrate held the roster thus had the effect of requiring the electricians to be on standby despite the fact that, in a strict sense, Manildra had never formally required the employees to be on standby.  Manildra was ordered to pay the electricians for that time.

Appeal Decision - Federal Court of Australia

In the Federal Court, Justice Cowdroy held that the Magistrate at first instance had ignored the evidence of a senior Manildra employee, Mr Chilcott.  As a result, instead of sending the matter back to be reconsidered (and causing delay) Justice Cowdroy considered the issue of standing by anew.ii

Manildra maintained that although the employees might have been "called back" to work if required and available, this was different from being required to be "on standby" pending call back to work.

In considering the relevant clause in the Award, his Honour reviewed and stated the principles of interpretation for industrial awards: first, they must be approached focussing on the actual words, using their plain, ordinary English meaningiii secondly, if the words of the clause are ambiguous then the context in which they appear must be considerediv, and lastly, the overall document and its purpose must be considered.v

Using these principles, his Honour held that, under clause 25.2 of the Award, there must be:

  1. a requirement, issued by the employer, that the employee 'stands by'
  2. a period of sometime during which the employee is required to hold themselves in readiness to work
  3. an instruction from the employer that the employee is no longer required to 'standby'.vi

It was really the first condition which was in issue. Justice Cowdroy looked at the decision of Chief Commissioner of Police v Kerley (2008) 171 IR 420 which concerned a police officer allowance for standing by.  In that case, the officers had to nominate themselves to be standing by on the roster.  It was held that being on standby could be voluntary and did not have to be specifically ordered by the employer.  Summing up that decision, Justice Cowdroy stated

Provided that the management knew and approved of the formation of the roster, that was sufficient to amount to an authorisation for the employee on call to hold himself or herself in readiness.vii

It followed that the fact that the four Manildra electricians could change the roster among themselves did not go against the "existence of the roster as a form of tacit instruction" to hold themselves available for after hours calls.viii  Further, the existence of very rare occasions when the nominated electrician did not attend did not change the general effect of the roster. Thus, Manildra had required its electricians to be standing by and the first part of the Award clause was met.

Justice Cowdroy held that the requirement for the "after hours" electrician to be fit for work (by not drinking alcohol) restricted their social activities.  It was significant that Manildra benefitted from having someone responsible for responding to any problem and organising a response.  The electricians were required to be in a position to respond to Manildra's call for a period.  This period would end when the morning shift began, so meeting the second and third conditions of the Award clause.

Accordingly, Manildra's appeal was dismissed.  The Court affirmed that the electricians were on standby and should have been paid for that time.  

What does this mean?
  • As always, the actual arrangement between employer and employee is vital when interpreting the employment relationship and conditions
  • The Courts will interpret Awards according to their plain, ordinary English meaning
  • Employees and employers need to be careful about any arrangements they make for an employee to be called back to work
  • Most importantly, employers must be aware that even if they do not directly instruct employees to be on standby, if they are aware of and permit a workplace roster or similar which provides employees be ready for return to work as required, it may amount to employees standing by under an Award and entitle them to payment for that standing by.

 


iManildra Flour Mills (Manufacturing) Pty Limited v National Union of Workers [2012] FCA 1010 at 9.
iiManildra Flour Mills (Manufacturing) Pty Limited v National Union of Workers [2012] FCA 1010 at 44.
iiiBryce v Apperley (1998) 82 IR 448 at 452.
ivKucks v CSR Ltd (1996) 66 IR 182 at 184.
vAmcor v CFWEU (2005) 222 CLR 241 at [95].
viManildra Flour Mills (Manufacturing) Pty Limited v National Union of Workers [2012] FCA 1010 at 55.
viiManildra Flour Mills (Manufacturing) Pty Limited v National Union of Workers [2012] FCA 1010 at 74.
viiiManildra Flour Mills (Manufacturing) Pty Limited v National Union of Workers [2012] FCA 1010 at 78.


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This article is not legal advice and the views and comments are of a general nature only. This article is not to be relied upon in substitution for detailed legal advice.

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