Pay­ment for Stand­ing By 

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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).

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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 con­sid­ered^iv, 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.