WESTERN AUSTRALIAN INDUSTRIAL MAGISTRATES’ COURT

PARTIES COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING, AND ALLIED WORKERS UNION OF AUSTRALIA, ENGINEERING & ELECTRICAL DIVISION, WA BRANCH

CLAIMANT

-v-

NETSPARK ELECTRICAL PTY LTD, GJ MCBRIDE

RESPONDENT

CORAM INDUSTRIAL MAGISTRATE G. CICCHINI

DATE 24 FEBRUARY 2005

FILE NO. M 230 OF 2004

CITATION NO. 2005 WAIRC 01519

Representation 

Claimant Mr L Gandini (of Counsel) instructed by Chapmans, Barristers & Solicitors

Respondent Mr TCP Crossley-Solomon of Crossley-Solomon Industrial Relations Consultants

Reasons for Decision

Background

1         The Claimant is an industrial organisation registered pursuant to Part II Division 4 of the Industrial Relations Act 1979.  The Respondent is a company incorporated under the Corporations’ Laws of the Commonwealth whose principal business is that of electrical contracting.  The Respondent employed Brad Bayfield as an Electrical Installer from 15 April 2002 until 30 June 2002.  The Electrical Contracting Industry Award No R 22 of 1978 (the Award) issued by the Western Australian Industrial Relations Commission (the WAIRC) bound the employer and Mr Bayfield, whose classification as an Electrical Installer is contained within subclause (2)(a)(iii)(aa) of the First Schedule – Wages of the Award.

Claim

2         The Claimant alleges that over the period of employment the Respondent failed to pay Mr Bayfield the following:

1. Travel Allowance in accordance with clause 20(2)(c) of the Award.  Amount claimed $319.20 (48 days @ $6.65 per day).
2. Grievance Procedure and Special Allowance in accordance with clause 27(3)(a) of the Award.  Amount claimed $256.85 (11 weeks @ $23.35).
3. Footwear Allowance in accordance with clause 6(1) of the Award.  Amount claimed $21.56 (359.4 hours @ $0.06 per hour).
4. Annual Leave Loading in accordance with clause 23(3)(c) of the Award.  Amount claimed $ 97.15 ($555.12 @ 17.5%).
5. Redundancy in accordance with clause 38(2) of the Award.  Amount claimed $346.50 (19.25 hours @ $18.00 (the agreed rate)).

3         Accordingly the Claimant seeks to recover the total of the aforementioned in the sum of $1041.26 allegedly underpaid together with interest thereon plus costs.  It also seeks the imposition of penalties.

Response

4         The Respondent submits that the Claimant is barred from bringing this claim by virtue of a Deed of Settlement entered into by the parties in November 2002, which inter alia settled a claim made by the Claimant in the WAIRC alleging that Mr Bayfield was unfairly dismissed.

5         In the alternative the Respondent contends that Mr Bayfield was, during the course of his employment, paid above the prescribed award rate for his classification and that such over award payment should be “offset” in accordance with what was said by Anderson J in James Turner Roofing Pty Ltd v Christopher Lawrence Peters

6         83 WAIG 427.  The Respondent says that Mr Bayfield was, during the relevant period, paid more than he would have been entitled to under the Award and is therefore not entitled to that which the Claimant seeks.  The Respondent says that during the material period Mr Bayfield was only entitled to an amount of $608.78 per week comprised of ordinary hours, Tool Allowance, Licence Allowance, Special Allowance and Boot Allowance however he was paid $760.00 per week comprised of the following components:

  38 hours @ $18.00 per hour (all in)                                   $684.00

  38 hours @ $1.00 per hour – Special Allowance                  38.00

  38 hours @ $1.00 per hour – Company Allowance              38.00

                                                                                             $760.00

7         The Respondent says that during the course of his employment Mr Bayfield was paid $509.23 in excess of his Award entitlement and that therefore the Claimant is not entitled to recover that which is sought.  The Respondent submits that given the circumstances the claim ought to be considered as frivolous and vexatious particularly  in light of the James Turner Roofing Pty Ltd decision (supra).  It accordingly seeks that costs be awarded against the Claimant.

8         During the course of the hearing the Respondent raised an additional ground of defence not previously disclosed in its outline of case filed prior to the hearing.  The Respondent also now contends that because Mr Bayfield was dismissed for “misconduct” he is precluded by virtue of clauses 38(1) and 23(3)(d) of the Award respectively from receiving a redundancy payment and annual leave loading.

Evidence

9         The Claimant called only one witness being Peter John Carter, an organiser employed by the Claimant.  His evidence addressed the relevant pay rates and allowances payable pursuant to the Award.  He also gave hearsay evidence, without objection, of what Mr Bayfield had told him about aspects of his work.  Mr Carter also gave evidence concerning his knowledge of the Respondent’s operations.  Further he was taken to testify about the meaning of certain Award provisions including the meaning of the term “construction”.  In my view Mr Carter’s evidence was of limited value.  His hearsay evidence carries little weight.  His evidence concerning the meaning of certain Award provisions is of no value.  His views with respect to the Award provisions are irrelevant.  In the end the Award speaks for itself and it is for the Court to construe the Award having regard to the ordinary rules of construction.

10      The Claimant did not call Mr Bayfield, whom I was told from the bar table was not available.  The effect of Mr Bayfield’s unavailability in this matter causes the Claimant difficulties.  Without the benefit of his evidence aspects of the evidence called by the Respondent remain unchallenged.  If necessary it could have sought to reopen in order to rebut evidence given on matters that it could not have possibly anticipated in the light of the pleadings (I use such term loosely).  The Claimant could have, but did not seek to adjourn the proceedings to facilitate Mr Bayfield giving evidence on material issues.

11      The Claimant seeks to prove its claim based on the admissions made by the Respondent in its “Answer and Counter Claim” filed 30 September 2004 and from the inferences to be drawn from copies of payslips for the relevant period relating to Mr Bayfield which were introduced into evidence by consent. 

12      The Respondent in its defence of the claim called three witnesses.  They were Gregory McBride, the Respondent’s Managing Director; Garrie Taylor, its General Manager and Ben Stokes, a supervisor which it employs.

13      Mr McBride testified that the Respondent was, at the material time, contracted to Western Power to carry out the conversion of the overhead power provision to that of underground power.  It was required to carry out such work in various suburbs but at the material time was primarily working in the Mount Lawley area.  Although such work was its main work, the Respondent also carried out other work.  Mr Bayfield’s job however was related to the converting of overhead power to underground power to private residences in Mount Lawley.  Mr McBride testified that Mr Bayfield was employed for that purpose as an “A Grade Electrical Mechanic” in the calling of Electrical Installer.  He said that Mr Bayfield was told upon appointment that he would be paid $18.00 per hour, which included a Licence Allowance, Tool Allowance and Boot Allowance.  In addition the Respondent was to pay him and did pay him a $1.00 per hour Special Allowance in recognition of the repetitive nature of the work performed and further a $1.00 per hour Company Incentive Allowance which was only payable if the employee was not late to work, and had not taken sick leave or caused damage or loss to the Respondent.  The payment of the Company Incentive Allowance for the week was entirely subject to Mr Bayfield meeting the employer’s criteria in that regard.  It was an all or nothing allowance.  If for example sick leave were taken during a week then the allowance would not be paid at all.  Mr McBride testified that Mr Bayfield was the subject of an induction carried out by Mr Taylor during which issues relating to pay rates and allowances “would have been discussed”.

14      Mr McBride testified that Mr Bayfield worked on residential properties in the Mount Lawley area in converting those properties from overhead power to underground power.  He was not involved in construction.  Indeed the Respondent’s work was that of “jobbing” and not construction.  He testified that Mr Bayfield was supplied with a company vehicle for such purpose which he could drive to and from work and in the course of his employment, subject to him keeping the vehicle clean and tidy and ensuring that the vehicle had oil and water.

15      Mr McBride testified that Mr Bayfield’s work performance was less than satisfactory throughout, culminating in an incident in late June 2002, which cost the Respondent significantly.  What occurred was that Mr Bayfield caused a power pole to be pulled up rather than it be cut and capped as required.  That resulted in the Respondent being forced to carry out significant remedial work at great cost.  It was that incident which precipitated his dismissal for misconduct rather than the reasons given by Mr Bayfield in his Notice of Application filed in the WAIRC in matter No C 137 of 2002 in which Mr Bayfield alleged that he was unfairly dismissed.  Mr McBride said that the annual leave loading and redundancy payments were not made to Mr Bayfield upon termination on account of his termination occurring for misconduct. 

16      Mr McBride testified that the Grievance Procedure and Special Allowance (hereinafter referred to as the Grievance Special Allowance) was not paid at any time during the course of Mr Bayfield’s employment because he did not regard the same to be payable.  Travel Allowance was also not paid because Mr Bayfield was not engaged in construction work.  Travel Allowance was only payable for construction work.

17      When cross-examined Mr McBride conceded that he told Mr Bayfield on a Tuesday or a Wednesday of his final week of employment that his employment would be terminated.  Notwithstanding that he allowed him to work until the end of that week (Friday). He reaffirmed that the failure to cut and cap the pole was “the straw that broke the camel’s back”.  That act of misconduct warranted dismissal, albeit not immediate, when considered in the light of other substandard work carried out.  It was for that reason that Mr Bayfield was allowed to work out the rest of the week and was paid an extra week’s pay in lieu of notice.

18      Following the close of the Respondent’s case, the Respondent was given leave by the Court, which was consented to by the Claimant, to re-open.  The Respondent reopened its case on the second day of hearing.  Mr McBride was again called to testify concerning award rates.  He told the Court that in discussing the matter with his wife (who did the books) the previous evening he had discovered that the $18.00 per hour payment included all allowances including the Grievance Special Allowance.  He was in error with respect to the evidence given the previous day in limiting that rate to the allowances previously specified.  He said the rate of $18.00 per hour included every allowance.

19      Garrie Taylor who was at the material time the Respondent’s General Manager also testified concerning the matter.  It is noted that he no longer works for the Respondent.  Mr Taylor said in evidence that he interviewed Mr Bayfield and conducted his induction.  He said that during that process pay rates would have been discussed.  He said that Mr Bayfield was employed on a full-time basis and was paid an “all in figure” to take into account all allowances payable under the Award.  In addition he was paid an over award Special Allowance and an Incentive Allowance.  He said “he had to make it clear to him (Bayfield) that the allowances were in an all up payment”.

20      Over the two and a half months during which Mr Bayfield was employed with the Respondent Mr Taylor had reason to speak to him on a number of occasions in relation to his substandard work.  The substandard work resulted in notices being issued against the Respondent by Western Power Electrical Inspectors.  A considerable amount of re-work was required.  In essence Mr Taylor’s evidence was that Mr Bayfield was incompetent, resulting in cost to the Respondent.  Mr Taylor said that Mr Bayfield was challenged about his competence.  Mr Bayfield responded by saying that he was doing the best that he could.  The incident with the pole immediately before dismissal was the last of a long line of difficulties with the standard of Mr Bayfield’s work.

21      When cross-examined Mr Taylor re-confirmed that when discussing pay rates with Mr Bayfield he made it clear that the $18.00 per hour rate payable was an “all in rate” inclusive of allowances payable under the Award for the job undertaken (i.e. jobbing).  Mr Taylor said that he would have sacked Mr Bayfield because he was not competent.  His mistakes amounted to gross misconduct.

22      Ben Stokes, a supervisor employed by the Respondent, was also called to testify in relation to the matter.  He has worked for the Respondent for about three and a half years.  Mr Stokes said that he was at the material time Mr Bayfield’s supervisor.  He said that he had to repeatedly speak to Mr Bayfield concerning his substandard work, which on occasions did not comply with the Australian Standards.  Mr Bayfield’s work, he said, was below average.  He was not competent.  He, on occasions, left his work unfinished.  His work was unsafe.  He said that the work carried out by Mr Bayfield was on established residential dwellings and did not constitute construction work.  They did not work on construction sites.

23      Mr Stokes said that he was aware that Mr Bayfield had been terminated for performing substandard work and for not following directions.  He said that on the final day of his employment Mr Stokes drove Mr Bayfield home.  En route to his home Mr Bayfield and Mr Stokes discussed his termination.  He said that Mr Bayfield told him he had no problem with what had occurred.

Determination

Deed of Settlement

24      The first limb of the Respondent’s defence is that this claim is barred by virtue of a Deed of Settlement entered into by the Claimant on the one hand and Netspark Electrical Pty Ltd on the other with respect to the application in the WAIRC in matter No C 137 of 2002 alleging that Mr Bayfield and another had been unfairly dismissed.

25      The Deed provides inter alia as follows:

 Without any admission of liability the parties agree:

 to (d)  . . .

 The Union and the Employees agree that this settlement is in full and final settlement of any               and all matters relating to and arising from the employment relationship, save for any alleged               breach of the Electrical Contracting Industry Award or Western Power Certified Agreement in               relation to the payment of wages, and may be pleaded as a bar to any further proceedings;

26      The first observation to be made is that the Deed is made between the Claimant and a different legal entity to the Respondent in these proceedings.  Assuming that the Deed contains a correctable error, which would make it enforceable against this Respondent, the question remains whether the Deed bars this claim.

27      Mr Crossley-Solomon argues that the exclusionary provision found in clause 2(e) of the Deed relates to the payment of wages only.  He argues that the concept of “wages” excludes contractual benefits in the form of allowances.  He says that allowances are in the form of “reimbursement for a cost incurred”.  Mr Crossley-Solomon has not cited any authority to support his contention.  I reject his contention.  Using the current claim as an example I cannot comprehend how it could be successfully maintained that the Grievance Special Allowance is a reimbursement for a cost incurred.  The allowance is a flat rate allowance payable pursuant to clause 27(3)(a) of the Award for each week that the employer and employee are not involved in an industrial dispute resulting in direct action.  It could hardly be categorised as a reimbursement.  The concept of “wages” includes all award payments.  Accordingly clause 2(e) of the Deed cannot operate to prevent the claim from being considered and determined.  Indeed the same specifically facilitates this claim.

Application of the Principle in James Turner Roofing Pty Ltd

28      The application of the principle established in James Turner Roofing Pty Ltd (supra) requires an analysis of a particular allowance and a determination as to whether the particular allowance is capable of being the subject of an all in rate.  In my view the Claimant’s claim for payment of redundancy cannot be the subject of the “all in rate”.  In James Turner Roofing Pty Ltd (supra) His Honour Anderson J said at page 432 (paragraph 48):

 I do not say that in no instance has the appellant contravened the award. It may be, for  example, that some of the entitlements prescribed in the award and which were denied to               the respondent cannot be discharged by payment of money. The obligation to provide those               entitlements may not be capable of being discharged by the payment of an all-in rate, no               matter how much it may exceed the rates set forth in the award. In that case there could be               no question of set off. For example, I would doubt that there is a sufficient degree of               correlation between the nature of the payment made to the respondent and the nature of the               obligation to pay untaken long service leave. I would doubt that the over award payment               for hours worked could be set-off against the obligation to pay untaken long service leave.               It will be for the Industrial Magistrate to consider these matters.

29      Only entitlements, which are finite and determinable for the purpose of calculation of any pay period, are those to be considered as subject to set-off.  Redundancy pay for example could not possibly be contemplated as being part of the “all in rate”.  That entitlement accrues upon the happening of a triggering event of termination.  It is indeterminable on a weekly basis.  Further the payment is entirely variable contingent on the length of service.  Given that the quantum payable is contingent upon variable factors that cannot be known or calculated until the triggering event occurs the same cannot therefore be calculated on a weekly basis.  It follows that it cannot form part of the “all in rate”.  The entitlement is in the same class as entitlements such as long service leave, to which His Honour referred.  On the other hand other Award entitlements such as Annual Leave Loading, Travel Allowance, Grievance Special Allowance and Safety Footwear Allowance are finite in nature.  They are calculable for each pay period.  There is certainty in the quantum payable and are not contingent upon a triggering event.  They are entitlements to which the principle outlined in James Turner Roofing Pty Ltd (supra) applies.

Was Mr Bayfield Entitled to the Allowances Claimed?

30      The Claimant says that Mr Bayfield was not, during the course of his employment, paid Travel Allowance, Grievance Special Allowance and the Safety Footwear Allowance.  It is the case that such allowances are not specifically described in Mr Bayfield’s weekly payslips (see exhibit 1).  The Respondent says that those allowances, and others, save for the Travel Allowance, which was not payable in any event, make up the “all in rate” of $18.00 per hour described as “Normal Hours” in Mr Bayfield’s payslips.

Travel Allowance

31      Clause 20 of the Award is entitled “Allowance for Travelling and Employment in Construction Work”.  It is axiomatic therefore that the allowance is only payable for construction work.  “Construction Work” is defined in clause 5(12) of the Award as follows:

 (12) "Construction Work" means work on site in or in connection with -

 (a) The construction of a large industrial undertaking or any large civil engineering project;

 (b) The construction or erection of any multi-storey building; and

 (c) The construction, erection or alteration of any other building, structure, or civil  engineering project which the employer and the union agree or, in the event of disagreement,               which the Board of Reference declares to be construction work for the purposes of this award.

32      It is for the Claimant to prove on the balance of probabilities that the Respondent was engaged in construction work.  In that regard Mr Carter testified that he was aware of the nature of the Respondent’s operation and that his view was that the Respondent was engaged in civil engineering, which constituted construction work.  Later in his evidence he said that the Respondent was engaged in construction work as defined in clause 5(12)(c) because the work carried out by the Respondent at Mount Lawley constituted “alteration of a building”.  The Respondent on the other hand says through Mr McBride and Mr Taylor as supported by Mr Stokes that it was not involved in construction but rather carried out “jobbing” work.

33      The evidence called by the Claimant to prove that the Respondent was engaged in construction work is very limited indeed.  It is obvious that Mr Carter did not see the work that Mr Bayfield did.  He has never been to the job at Mount Lawley.  Indeed he has never had a meeting with Mr Bayfield.  All he can do is put forward what he was told by Mr Bayfield over the telephone.  Such evidence is extremely limited, and hearsay in any event.  Such hearsay evidence carries little or no weight.  The state of the evidence is far from what is required to prove that Mr Bayfield was engaged in construction work.  The evidence given by Mr Carter concerning the nature of work carried out by the Respondent is also of little assistance.  Obviously the evidence needed to be specific to the work carried out by Mr Bayfield for the Respondent.  The uncertainty in Mr Carter’s view is reflected in his evidence.  He gave two differing bases for considering Mr Bayfield to be working for the Respondent in construction work.  His evidence amounted to no more than opinion evidence with little or no foundation.  In reality he could not say what Mr Bayfield did.  On the other hand the witnesses called by the Respondent could.  Their evidence dictates that Mr Bayfield did not work in construction.  The fact that the Respondent paid Mr Bayfield a Safety Footwear Allowance, only usually payable with respect to construction work, does not of itself change the nature of the work Mr Bayfield was doing nor does it prove that the Respondent was engaged in construction work.  In my view the payment of the Safety Footwear Allowance, to which Mr Bayfield was not entitled as of right, must constitute an over award payment.

34      The state of the evidence does not permit a finding to be made that Mr Bayfield was engaged in the alteration of a building, structure or civil engineering project “which the employer and the union agree(d)” was declared to be construction work for the purpose of the Award (see clause 5(12)(c) of the Award).

35      I find that the Claimant has failed to prove that Mr Bayfield worked in construction work and accordingly has failed to prove that he was at all material times entitled to the Travel Allowance claimed.

Safety Footwear Allowance

36      Similarly, this allowance is only payable in respect to construction work.  Accordingly I adopt my reasons with respect to Travel Allowance in finding that the Claimant has not proved its claim in this regard.  Having said that, I acknowledge that the Respondent has purported to pay Mr Bayfield such allowance as an over award payment as part of the “all in rate”.

Grievance Procedure & Special Allowance

37      Mr McBride, when giving his evidence on the first day of the hearing made it clear that he was unaware of the obligation to pay such Grievance Special Allowance.  It is obvious to me that he did not even contemplate the payment of the same.  He was simply unaware of his obligation in that regard.  It was not, in his own mind, factored into the “all in rate” of $18.00 per hour paid to Mr Bayfield.  Mr McBride shifted ground on the second day of the hearing to say that it was included in the “all in rate”.  I fear that the shifting of ground occurred because Mr McBride came to the realisation that the same was payable.  However that becomes irrelevant.  It matters not what was in his mind.  The real issue was what did the parties contract.  In that regard Mr Taylor discussed pay rates with Mr Bayfield at the commencement of Mr Bayfield’s employment.  Mr Taylor testified (and his evidence remains unchallenged) that he told Mr Bayfield that the “all in rate” of $18.00 per hour would include all allowances.  I accept Mr Taylor’s evidence.  Accordingly I find that the $18.00 hourly rate paid to Mr Bayfield was an “all in rate” inclusive of the Grievance Special Allowance provided for in clause 27(3)(a) of the Award.

38      Mr Carter, for the Claimant, testified that “Normal Hours” as referred to in the payslips of Mr Bayfield cannot, by virtue of what is contained in the First Schedule – Wages of the Award, be said to include the Special Allowance provided for in clause 27(3)(a) of the Award.  In that regard he referred to the decision of Senior Commissioner Fielding of the WAIRC in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Workers Union v AB Tilbury Pty Ltd 77 WAIG 1510.

39      In Tilbury the central issue was whether or not the allowances were payable for “all purposes”.  More specifically the question the applicant union sought answered was one of whether or not the allowances set out in the First Schedule of the Award form part of the wage prescribed under the Award for the purpose of calculating overtime and other penalty entitlements.  The applicant union submitted that the provisions in question applied so as to make the allowances payable for all purposes of the Award.  The Respondent on the other hand contended that the Award operated to provide for a flat weekly payment to be paid irrespective of the hours worked.  It suffices to say that the applicant union was successful in its application.

40      The Claimant now argues, as I understand it, that in the light of the aforementioned decision “Normal Hours” as referred to in pay slips (see exhibit1), cannot by definition, include the Grievance Special Allowance provided for by clause 27(3)(a) of the Award.  Put another way, that allowance falls outside normal hours as contemplated by the Award in the First Schedule – Wages.  The Claimant’s argument in that regard is rejected.  The Tilbury decision (supra) is to be distinguished on its own facts.  In my view nothing turns on the description “Normal Hours” contained in the payslips.  To give the description “Normal Hours” the legal effect that the Claimant seeks would in my view be inappropriate because it is quite apparent that the term “Normal Hours” is no more than a convenient term used by the Respondent in its payslips to describe the “all in rate” agreed to.  The Special Allowance payable pursuant to clause 27(3)(a) is one of those allowances agreed upon as making up part of the “all in rate” which is capable of being set-off in accordance with what was said in James Turner Roofing Pty Ltd (supra).

Annual Leave Loading

41      The Claimant claims annual leave loading.  The relevant Award provision is clause 23(3) which provides:

 (3) (a) Except as hereinafter provided, a period of four consecutive weeks leave with  payment as prescribed in paragraph (b) shall be allowed annually to an employee by the               employer after a period of twelve months continuous service with that employer.

 (b) (i) An employee before going on leave shall be paid the wages they would have  received in respect of the ordinary time the employee would have worked had they not been on               leave during the relevant period.

 (ii) Subject to paragraph (c) hereof, an employee shall, where applicable, have the amount of               wages to be received for annual leave calculated at the rate applicable to the employee as               prescribed in the First Schedule to this award and the allowances prescribed by Clause 22. -               Location Allowances of the award.

 (c) In addition to the payment prescribed in paragraph (b) hereof an employee shall receive a               17.5% loading calculated on the rate of wage prescribed by that paragraph.

 (d) The loading prescribed by paragraph (c) of this subclause shall apply to proportionate  leave on termination except in the case of an employee whose services are terminated by the               employer for misconduct.

42      Unlike many other award provisions which do not enable, upon termination, the payment of Annual Leave Loading on the proportionate annual leave entitlement, clause 23(3)(d) of the Award specifically provides for the same.  Accordingly the payment of Annual Leave Loading in this instance is not contingent upon any other variable factor.  In this case the quantum payable is capable of calculation for the purpose of weekly payments and can be the subject of an “all in rate”.  However I would have thought that in other awards where the Annual Leave Loading is not payable on proportionate leave that the same may not be the subject of a weekly payment as part of an “all in rate”.  In such circumstances there will be contingent and variable factors which will preclude the Annual Leave Loading from being considered as part of an “all in rate”.  The consideration of whether the loading can be set off in accordance with what was said in James Turner Roofing Pty Ltd (supra) will always remain a matter to be determined on a case by case basis.  In this case it can be; in other cases it may not.

43      The transformation of the entitlement into a weekly payment calculated as part of the yearly entitlement is permissible and is akin to what happens when a casual worker is paid a casual loading.  The potentiality of the entitlement being forfeited in cases of misconduct does not vitiate the agreement.  If the employer is willing to pay up front such entitlement which may render the exception to payment for misconduct nugatory, then that is a matter for the employer.

44      It follows that the weekly pay of $684.00 received by Mr Bayfield as his gross weekly “all in rate” (which included allowances) exceeded that which was payable to him pursuant to the Award which was $615.46 comprising of the following:

  38 Ordinary Hours                                      $555.30

  Tool Allowance                                              11.30

  Licence Allowance                                         16.55

  Annual Leave Loading                                     8.96

  Special Allowance                                          23.35

                                                                       $615.46      (or $16.20 per hour)

45      The evidence dictates that the Respondent has for each week of Mr Bayfield’s employment paid him an “all in” amount described as “Normal Hours” which it was obliged to pay to him pursuant to the Award.  Accordingly there has not been a breach of the Award in that regard.

Redundancy

46      The redundancy provision is found in clause 38 of the Award.  I set out the relevant subclauses:

 (1) Definition

 "Redundancy" means a situation where an employee ceases to be employed by an employer,               respondent to this award, other than for reason of misconduct.  "Redundant" has a               corresponding meaning.

 (2) Redundancy Pay

 A redundant employee shall receive redundancy/ severance payments, calculated as follows, in               respect of all continuous service (as defined in subclause (4) of this clause) with his or her               employer provided that any service prior to 22 November 1990 shall not be counted as service.

47      Provided that an employee employed for less than twelve (12) months shall be entitled to a redundancy/severance payment of 1.75 hours per week of service if, and only if, redundancy is occasioned otherwise than by the employee.

48      Mr Bayfield worked for the Respondent only for a short duration but is nevertheless entitled to redundancy pay within the meaning of clause 38(1) unless it can be demonstrated that his employment was terminated for reason of misconduct; the onus resting upon the Respondent to prove the same on the balance of probabilities.

49      The Respondent’s case is that Mr Bayfield was dismissed for misconduct.  In essence the evidence given by each of Mr McBride, Mr Taylor and Mr Stokes supports a finding that Mr Bayfield was incompetent.  Mr McBride’s evidence, which remains unchallenged, is that Mr Bayfield was terminated for misconduct on account of his incompetence and for no other reason.

50      Misconduct connotes positive and intentional wrongdoing whereas other grounds for dismissal, such as incompetence and neglect, do not involve intentional misconduct.  Incompetence of an employee may be sufficient justification for the exercise of the right of summary dismissal.  In Harmer v Cornelius (1858) 141 ER 94 the Court said at page 98:

 “supposing that, when the skill and competency of the party employed are tested by the  employment, he is found to be utterly incompetent, is the employer bound nevertheless to go on               employing him to the end of the term for which he is engaged notwithstanding his               incompetency? … it seems very unreasonable that an employer should be compelled to go on               employing a man who, having represented himself competent, turns out to be incompetent …

51      Misconduct in a servant is, according to every day’s experience, a justification of a discharge.  The failure to afford the requisite skill which had been expressly or impliedly promised, is a breach of legal duty, and therefore misconduct.”

52      In each instance the bases upon which the employer is entitled to summarily dismiss an employee are two-fold, firstly, an express or implied representation by the employee of competence to fulfil a job and, secondly, actual incompetence.

53      Can the Respondent establish that Mr Bayfield was justifiably terminated for misconduct arising from such incompetence?  Was his termination a summary dismissal?

54      The answer to the second question posed is clearly no.  The documentary evidence in the form of the payslips (exhibit 1) dictates that he was paid a week’s wages in lieu of notice.  Further the actual conduct of the Respondent in keeping Mr Bayfield on until the Friday following his being notified on the Tuesday or Wednesday that he would be dismissed contra indicates summary dismissal.  Indeed he was not summarily dismissed.

55      It is said that Mr Bayfield’s incompetence, which justified his dismissal for misconduct, disentitles him to payment of certain entitlements.  The factual matrix in this case is not dissimilar to the matter considered by His Honour Olney J in Industrial Inspector of the Office of Industrial Relations v Kevin Henry Holliday and Joyce Eva Holliday T/As Central Electronics – Wongan – Moora 66 WAIG 477 in which His Honour said at page 479:

56      A number of principles are now well established by the authorities. First, it is accepted that incompetence of an employee may be sufficient justification for the exercise of the right of summary dismissal and this will arise where there has been an express or implied representation by the employee that he was competent to fulfil the job and he has been shown to be incompetent.  [Harmer v. Cornelius (1858) 5 CB (NS) 236 at 246].  Second, a right of summary dismissal for inefficiency arises if an employee who possesses a particular skill fails or neglects to exercise that skill.  [Printing Industry Employees Union of Australia v . Jackson and O'Sullivan Pty Ltd (1957) 1 FLR 175 at 180].  Third, if there is no general or particular representation as to ability or skill the workman undertakes no responsibility. (Harmer v Cornelius at 246).

57      An employee who does not possess the skill and ability which he has either expressly or impliedly represented to have or who, having such ability or skill, fails or neglects to properly exercise the same, and for that reason has had his service terminated by his employer cannot say other than that the termination of his service is through his own fault.  But to say that an employee whose incompetence is not such as to justify summary dismissal is, when dismissed because of his incompetence, dismissed through his own fault, is to attribute a wholly unreasonable meaning to the word fault.  I do not think that the resolution of the matter is assisted by adopting terms such as “conduct . . . justifying of blame” or “failure . . . to give of his best” unless that conduct or failure is such as to justify summary dismissal.  It is wholly unreasonable and lacking in logic that conduct which does not disentitle an employee to the normal period of notice or payment in lieu of notice upon termination of his services might nevertheless prevent him from becoming entitled to a pro rata annual leave payment.

58      The question of competency was also recently considered by Harrison C of the WAIRC in Cheryl Johnson v Millswan Holdings Pty Ltd T/A Drivewest Car Rental 83 WAIG 348 in the context of an unfair dismissal claim where there was a failure to give adequate warning with respect to incompetence.

59      Appreciating that I am not dealing with an unfair dismissal claim, it is nevertheless appropriate to consider the Respondent’s conduct appertaining to warning.  Indeed in that regard it is the case that there is no evidence before the Court that Mr Bayfield was ever given a written warning.  I was told that he was spoken to concerning his performance.  However I was not told in precise terms what he was told.  The paucity of evidence concerning warnings given to Mr Bayfield suggests that he was not threatened with termination if his performance did not improve.  Indeed neither Mr McBride nor Mr Taylor warned him in those terms.  It follows that his lack of competence, although sufficiently concerning so as to cause the Respondent to terminate him, was not of sufficient concern as to warrant summary dismissal for misconduct based on incompetence.

60      Indeed the Respondent has never suggested in its response filed with the Court prior to the hearing that Mr Bayfield was dismissed for misconduct as a result of his incompetence.  I do not accept that Mr Bayfield was dismissed for misconduct.  I find that he was not dismissed for misconduct.  Misconduct is just a convenient label that the Respondent, through its Director Mr McBride, has recently given to what occurred in order to rationalise and justify the non-payment of entitlements.  What in reality happened is that Mr Bayfield made a lot of mistakes on the job.  The Respondent was unhappy about the same.  His last mistake caused the Respondent to decide that it should no longer employ him.  He was accordingly dismissed with pay in lieu of notice.  He was not summarily dismissed and his performance, although unsatisfactory, had not at the time of termination amounted to misconduct.  It is for that reason that there has not been any suggestion of misconduct until the commencement of the hearing of this matter.  The Respondent has failed to prove that Mr Bayfield was dismissed on account of misconduct.  It follows also that the Claimant has proved a breach of the Award constituted by the Respondent’s failure to pay redundancy.  On termination Mr Bayfield should have received a redundancy payment of $311.85 being 19.25 hours at the Award rate which I calculate to be $16.20 per hour.  It is appropriate to calculate the redundancy payment based on the Award rate rather than the agreed rate.  His Honour Anderson J said in James Turner Roofing Pty Ltd (supra) at page 429 (paras 13 and 14):

61      I note that the "total amount . . . " is arrived at not by reference to the hourly rates prescribed in the award but by reference to the higher rate agreed between the parties and actually paid to the appellant for the hours which he worked. For myself, I can see no basis upon which the amount due upon enforcement of an award can be calculated by reference to an hourly rate which is not the rate prescribed in the award. . . . There is no reason why parties cannot contract by reference to the terms and conditions of an award. So for example, an employer might offer employment expressly or impliedly on the basis that the employee is to receive all of the benefits of the award save that instead of the ordinary hourly base rate prescribed by the award, a higher base rate will be paid. But then the employee who complains of a breach of the obligation to pay at the higher rate is not seeking to enforce the award but is seeking to enforce the agreement: Amalgamated Collieries of WA Ltd v True (1938) 59 CLR 417 per Evatt J at 434 and Dixon J at 431. See also (1940) 62 CLR 451 (Privy Council) per Lord Russell at 455. The failure to pay at the agreed rate would be a breach of the agreement, not a breach of the award. . . .

62      I should perhaps say that it was not submitted that agreed over award payments are picked up by the award and become part of its terms and conditions; nor was our attention drawn to any statute which brings about such situation, that is, which converts an over award arrangement into an award condition. Therefore an application for enforcement of the terms and conditions of the award, which is what this application is, cannot proceed on the basis that what is due under the award is to be calculated by reference to the over award rate agreed between the parties.

63      I will now hear from the parties concerning the orders that are to be made.

G Cicchini

Industrial Magistrate