WESTERN AUSTRALIAN INDUSTRIAL MAGISTRATES COURT

PARTIES GLENN KERSHAW

CLAIMANT

-v-

Sun Valley Australia Pty Ltd

RESPONDENT

CORAM INDUSTRIAL MAGISTRATE G. CICCHINI

HEARD Thursday, 24 August 2006, Wednesday, 30 August 2006, Wednesday, 23 August 2006, Wednesday, 18 October 2006, Monday, 5 December 2005, Wednesday, 5 April 2006

DELIVERED Wednesday, 18 October 2006

CLAIM  NO. M 131 OF 2005

CITATION NO. 2006 WAIRC 05676

CatchWords Employer; employee; subcontractor; long service leave; annual leave; jurisdiction; termination of employment; continuous service; transfer or assignment of contract of employment; unauthorized absences.

Legislation  Minimum Conditions of Employment Act 1993

Long Service Leave Act 1958

Industrial Relations Act 1979

Income Tax Assessment Act 1936

Cases referred to in decision

Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16

United Construction Pty Ltd. v Birighitti [2004] WASCA 312

Climaze Holdings Pty Ltd v Dyson (1993) 13 WAR 487

Commissioner of Taxation (Cth) v J Walter Thompson (Australia) Pty Ltd [1944] 69 CLR 227

Marshall v Whittakers Building Supply Co [1963] 109 CLR 210 at 216-217

Australian Timber Workers’ Union v Monaro Sawmills Pty Ltd (1980) 29 ALR 322 (FC)

Australia Mutual Providence Society v Allan (1978) 52 ALJR 407 (PC)

Narich Pty Ltd v Commissioner of Payroll Tax (1983) 58 ALJR 30 (PC)

Connelly v Wells (1994) 55 IR 73 (CA)

Cam & Sons Ltd v Sargent (1940) 14 ALJR 162

BWIU v Odco Pty Ltd (1991) AILR 239

Neale v Atlas Products Pty Ltd [1955] 94 CLR 419

Burke v Reander Pty Ltd (1996) 69 IR 346

Ellis v Saks Design Pty Ltd (1997) AILR 2963

Hollis v Vabu Pty Ltd (Trading as Crisis Couriers) (2001) 181 ALR 263 (HC)

Augustyn v Vistadale Pty Ltd as trustee for the Ranger Family Trust trading as Ranger Contracting (2002) 82 WAIG 939 (FB)

Articulate Restorations and Development Pty Ltd v Crawford (1994) 57 IR 371

Queensland Stations Pty Ltd v Commissioner of Taxation (Cth) [1945] 70 CLR 539

Commissioner of Taxation (Cth) v Barrett [1973] 129 CLR 395

Barro Group Pty Ltd v Fraser [1985] VR 577 at 180

Jennings Industries Ltd v Negri (1982) 44 ACTR 9

Cases also cited  Zurich Australian Insurance Ltd v AMEC Services Pty Ltd [1988] WASCA 68.

Murcia & Associates v Grey (2001) 25WAR 209

Personnel Contracting Pty Ltd v CFMEU [2004] WASCA 312

Massey v Crown Life Insurance Co [1978] 2 All EK 576

Oates v Sanders Executive Pty Ltd 79 WAIG 1198

Brow –v- University of W.A. 84 WAIG 189

Quinlivan v Austral Ltd 84 WAIG 1328

Alderson v St Columbia – Kingswood College and the Uniting Church Property Trust 84 WAIG 181

Nokes v Doncaster Amalgamated Colleries [E1940] 3All ER 549

Casinos Australia International (Christmas Island) Pty Ltd v Christmas Island Resort Pty Ltd. Library No. 980726

Result Claim successful in part

Representation 

Claimant Mr G McCorry (Agent) of Labourline-Industrial and Workplace Relations Consulting

Respondent Mr M Cuerden (of Counsel) instructed by Michael Patterson & Associates

REASONS FOR DECISION

Background

1          In about 1990 Trevor Kershaw (Trevor) and his wife Julie formed a partnership (T and J Kershaw) for the purpose of conducting a mining related earthmoving business based at Kalgoorlie.  At about that time Trevor’s brother, namely David Glenn Kershaw (known as Glenn), was also working in the earthworks industry but was located at Perth.

2          In 1991 Trevor approached Glenn and their father to rebuild an old excavator that he had purchased.  Glenn and his father agreed to carry out that task and accordingly they, between mid 1991 and the end of 1991 at Kalgoorlie, stripped and completely rebuilt the excavator.  Glenn asserts that he funded the purchase of parts for the excavator because Trevor did not have the ready cash to fund the purchase of the necessary parts.  He was later reimbursed for the parts and was paid for his work.

3          Glenn asserts that in late 1991 Trevor approached him to be his partner in his and his wife’s earthmoving business.  Trevor told him that he was unable to build the business on his own and wanted Glenn to join him as a partner.  He hoped that together they could advance the business.  Just prior to Christmas in 1991, for the purpose of joining his brother in partnership, Glenn moved residence to Kalgoorlie. The arrangement was informal and accordingly never documented.  Trevor on the other hand denies that he offered his brother a partnership interest in the business.  He says that following the carrying out of repairs to the excavator Glenn offered to work in the business.  Consequently he was taken on as an excavator operator.  It was only later that he developed into the business’ operations manager.

4          Glenn asserts that in early 1992 he approached Trevor for the reimbursement of money expended in purchasing the parts used in the rebuilding of the excavator.  At that time he took the opportunity to raise the issue of the partnership.  He was told that a partnership was not technically feasible but that they should continue to work together in the advancement of the business which in the long run would benefit them both.  Remuneration was discussed at that time and it was agreed that Glenn would be paid at the rate of $20 per hour whilst operating the excavator and at a rate of $15 per hour whilst carrying out maintenance or mechanical repairs on equipment.  Trevor informed him that he would be paid by cheque.  Glenn suggests that Trevor instructed him to adopt the Prescribed Payment System (PPS) to deduct tax because of its simplicity and benefits such as income splitting.  Trevor on the other hand refutes that he instructed his brother to use PPS.  He said that the payment of an “all in rate” and the use of PPS was an industry standard that both understood to be applicable in the circumstances.

5          To facilitate the use of PPS Glenn, with the assistance of his accountant, created a partnership with his wife.  The partnership known as “Jade Earthmoving” was set up as a receptacle for the receipt of income derived from T and J Kershaw which later traded as Rocks N Tails.  Glenn provided no more than his labour to the business for which Jade Earthmoving was paid.  It was Glenn’s labour which gave rise to the invoices issued to Trevor’s business for payment.  The frequency of payment was not regular.  Payment was made monthly, fortnightly or weekly dependant upon circumstances. Glenn’s wife’s involvement in Jade Earthmoving was no more than to provide basic book keeping services.

6          During the course of 1992 Rock N Tails became incorporated as Rock N Tails Pty Ltd (RNT) of which Trevor became the Managing Director.

7          Glenn initially worked as an excavator operator, but as the business grew he became RNT’s operations manager.  As operations manager he was required inter alia to hire and fire employees, supervise works, bid for jobs, liaise with clients and effectively run the operations.  He was paid at the rate of $20 per hour which was later increased to $25 per hour.

8          Glenn testified that he threw himself into the business working very long hours, usually in excess of eighty hours per week and up to one hundred and thirty hours per week, but was not remunerated for all the hours he worked.  No provision was made for sick leave, annual leave, public holidays and long service leave.

9          In about 1995 Glenn bought a grader and a rock breaker.  They were variously dry hired out by Jade Earthmoving to RNT.  Glenn explained that “dry hiring” is a term used to describe the hiring out of plant without an operator. He testified that the hiring out of the rock breaker was only of short duration however the hiring out of the grader to RNT took place over a lengthy period.  Jade Earthmoving was paid $45 per hour for the use of the grader.  Glenn testified that his labour and the hire of the grader were separately invoiced.  Notwithstanding that, RNT withheld income tax from payments made for the hire of the equipment.

10       During the course of the 1990’s Glenn worked long hours with the objective of building up the business so that the benefits of a successful business would also flow to him.  He had been told by his brother that once the business had become sufficiently sound that they each would be able to take a few months off each year.  That is denied by Trevor.  Although he does not dispute that Glenn worked long hours he says that all invoiced time worked was paid. 

11       In 1999 Glenn’s marriage failed.  Consequently he took time off to reorganise his affairs and to look after his children.  Notwithstanding that, he continued to work reasonably long hours.  Given the circumstances, the arrangements in that regard were informal.  Each occasion that he took time off was with Trevor’s consent.  As a consequence of the break up of his marriage the partnership of Jade Earthmoving was dissolved.  Glenn thereafter continued to invoice RNT but in his own name.

12       On 1 July 2000, with the introduction of the Goods and Services Tax (GST), Glenn stopped invoicing his time and commenced receiving wages.  In reality nothing changed.  His conditions remained the same.  There was no new agreement to reflect the change.  He simply moved from the PPS to the Pay As You Go (PAYG) system.  He was still paid for time worked.  He continued to receive payment by way of cheque but that later changed to electronic transfer payments.

13       In about January 2002 Glenn became critically ill as a result of complications following surgery.  That necessitated him being off work for several months until about October 2002.  By that time he had remarried.  The grader that had been an asset of Jade Earthmoving had been transferred to his second wife.  The grader was dry hired to RNT during his incapacity and that generated income for his family.  In addition Trevor approached Glenn to assist him in his time of need.  Consequently it was agreed that a payment of $4,000 per month in addition to the grader hire would be made to Glenn’s wife to help the family survive.  Those payments were in fact made.  At that time the relationship between the brothers was good but regrettably later deteriorated.

14       When Glenn returned to work in October 2002 his financial situation was difficult, however RNT’s financial position appeared to be in good order.  It was agreed between the brothers at that time that Glenn was to be paid $35 per hour for 60 hours worked each week.  By mid 2003, notwithstanding RNT’s previously sound financial position, it found itself in financial difficulty and was placed into voluntary liquidation.  Consequently the administrators sold the business and assets of the company to Sunvalley Pty Ltd (Sunvalley) as trustee for the Kershaw Family Trust. Glenn did not have any direct involvement in the sale of the business and assets.  That resulted in Glenn’s employer changing.  All employees formerly working for RNT subsequently became employed by Sunvalley.  Glenn signed an Employment Tax Declaration Form on 1 August 2003 to reflect the change in his employment.  Sunvalley agreed to take over responsibility for employee entitlements. There is a dispute as to whether there was, at that time, discussion about Glenn’s existing entitlements.  Julie Kershaw testified that she overheard Glenn inform an employee working for RNT’s administrator that he did not have any existing entitlements.  Glenn on the other hand denies that was ever said.  In my view little turns on that in any event, because Glenn’s view on his legal position is of little significance. It is his actual position at law which is determinative. 

15       The change in employer did not affect the practical circumstances.  Although the business had a new owner the reality was that little changed.  The people involved in the business remained constant as did the nature and scope of the work undertaken.  Notwithstanding that, it was part of Glenn’s role to facilitate the changeover by arranging the transfer of existing contracts into Sunvalley’s name.

16       Later that year Glenn became aware that Sunvalley had adopted a new trading name being 3D Earthmoving.  He was unaware at that stage that 3D Earthmoving was in fact a proprietary limited company.  It appears that 3D Earthmoving Pty Ltd (3D), which was controlled by Trevor, became incorporated in about October 2003.  Trevor initially asserted that from that time onwards Glenn was employed by 3D; however he now concedes that Glenn may not have been made aware of the change.  I accept that Glenn did not, during the course of his employment, become aware that 3D had become his employer. 

17       In late 2003 Glenn experienced financial difficulty and sought to increase his income.  Consequently in 2004 he had discussions with Trevor concerning his position as operations manager.  In late November or early December 2004 Trevor and Glenn entered into negotiations about changes to Glenn’s terms and conditions of employment.  At that time Glenn was receiving remuneration at the rate of $109,200 per annum.  It suffices to say that on 2 December 2004, as a consequence of discussions, Trevor made a written offer to Glenn which was rejected. 

18       Glenn alleges that during the course of negotiations he became aware that another employee who was subordinate to him had in fact been receiving incremental $5,000 per annum increases in pay, a fact not previously known to him.  Trevor on the other hand maintains that Glenn was well aware of that other employee’s situation.  That led to a dispute between the brothers and negotiations concerning Glenn’s new rate of pay broke down.  There was, as a result, disharmony.  Glenn was concerned that his sister-in-law Julie had played a pivotal role in the deterioration of the relationship between him and his brother.  Given the situation the brothers agreed that a trusted family friend and Pastor, namely Dawson Elliott, be asked to mediate.  Mr Elliott agreed to become involved and facilitated mediation but that was unsuccessful. Notwithstanding that it was agreed that the parties should again involve themselves in mediation to attempt to resolve their differences.

19       On or about 17 December 2004 Glenn commenced a 6 week period of annual leave for which he was paid in advance.

20       A second mediation meeting took place at Mr Elliott’s home on 31 December 2004.  Glenn asserts that during the meeting it was agreed that:

1. Glenn would not leave his employment; and
2. Glenn’s remuneration would be increased to $170,000 comprising a salary of $155,000 and a motor vehicle allowance of $15,000; and
3. Glenn would be reimbursed motor vehicle expenses for repairs and replacements; and
4. Glenn would be paid $105,000 representing the amount that the other employee had received by way of yearly increases.  Such was to be paid by instalments with the first two instalments being $20,000 each; and
5. Glenn would return to work immediately and not continue to take annual leave; and
6. Trevor would confirm the terms of the agreement in writing.

21       Glenn thereafter did not go on a planned family holiday but returned to Kalgoorlie from Perth for the purpose of immediately returning to work following receipt of the written confirmation of their agreement.  Glenn says that thereafter, despite several assurances from Trevor that he would soon receive written confirmation of their agreement, the same did not eventuate.  In the end, out of a sense of frustration, Glenn attended the Kalgoorlie office to speak to his brother.  That occurred on 12 January 2005.  He then recommenced work and worked for a few days before going on stress leave.

22       Trevor says that at the meeting held on 31 December 2004 it was agreed in principal that Glenn was to be paid $155,000 plus a car allowance of $15,000 and that he was to confirm that offer in writing.  It was his intention to do that but discovered, prior to doing so, that Glenn was still pursuing his claim for $105,000.  He rejects Glenn’s contention that such sum had been agreed to be paid.  He believed that Glenn was dropping all other claims in light of their discussion.  Glenn’s continued claim for $105,000 made him suspicious that he had ulterior motives.  Accordingly the draft letter that he had prepared was never sent.  Trevor also asserts that Glenn did not return to work as had been agreed.  He had expected his return to work in Kalgoorlie on 2 January 2005 but that did not eventuate.  As it turned out Glenn returned to work for a few days before going off on sick leave.  In fact Glenn left work on 19 January 2005 and did not return.

23       On 27 January 2005, Julie Kershaw invited Glenn to a meeting to discuss Glenn’s employment and his claim against “Rock N Tails Pty Ltd”.  The meeting held on 31 January 2005 was attended by both Trevor and Glenn.  With them was Andrew Mercer, the Respondent’s accountant, who chaired the meeting.  During the meeting Glenn’s employment was terminated.  He was offered a $45,000 redundancy payment conditional upon his execution of a deed of settlement and release.  It suffices to say that Glenn refused to sign the same and the brothers then became involved in litigation.

Claim

24       Glenn asserts that on termination he was entitled to 38 weeks of untaken and unpaid annual leave amounting to $124,230.77.

25       Further he claims that on termination he had completed, or was deemed to have completed, at least twelve years of long service leave (see written submissions) thereby entitling him to payment of 10.4 weeks of long service leave in a sum of $34,000, which was not paid.

26       An amount of $158,230.77 is claimed.

Response

27       The Respondent contends that between 1 December 1993 and 30 June 2000 Glenn was not its employee.  It says that until 1 July 2000 Glenn was a sub-contractor variously engaged by T and J Kershaw, Rock N Tails Pty Ltd and Sunvalley Australia Pty Ltd.  In the circumstances Glenn was not entitled to annual leave during that period.

28       Furthermore given that Glenn was, during that period, a subcontractor he is not entitled to long service leave, as he has not met the qualifying period of service required for such payment.

29       The Respondent says that it has paid out all of Glenn’s entitlements and accordingly Glenn is not entitled to any payment.

30       The Respondent also argues that in order to enliven this Court’s jurisdiction the claimant must establish the Respondent’s liability for any accrued annual leave under a “contract of employment”.  The Deed of Confirmation of Sale of Business and Assets of Rock N Tails through which the Respondent took over the business, contemplates separate contracts of employment with transferring employees including Glenn.  The Respondent says that insofar as Glenn’s claim is based on an assignment of the contract of employment from RNT to the Respondent there was no assignment of employment.

31       Subject to Glenn establishing that he was an employee, there is no issue taken with the jurisdiction of this Court to determine the claim for long service leave insofar as such claim is based on the transmission of business provisions found in the Long Service Leave Act 1958 (LSLA).

Issues to be Determined

32       The parties agree that the following issues require determination.

1. Was the Claimant an employee for the period up to 1 July 2000?
2. Did the Claimant have an annual leave entitlement in respect of the period July 2000 to July 2003 when Rock N Tails Pty Ltd was the Claimant’s employer?
3. If the Claimant had any annual leave entitlements owing to him from Rock N Tails Pty Ltd as at 1 July 2003 in respect of any period of prior service as an employee, does the Industrial Magistrates Court have any jurisdiction to grant them to him?
4. Was Sunvalley Australia Pty Ltd the employer of the Claimant at the time of termination?
5. If the Claimant was an employee prior to July 2000, had the Claimant on 31 January 2005 completed 10 years or more of continuous long service leave within the meaning of the term in the LSLA?
6. If the Claimant had, at the time of his termination of employment on 30 January 2005, completed 10 or more years of continuous service within the meaning of the terms in the LSLA, was Sunvalley Australia Pty Ltd liable to pay the Claimant anything in the way of long service leave benefits?
7. If there are any entitlements owing, at what rate of pay should they be calculated?

Credibility Issues

33       Each party in submissions attacks the credibility of the other.  The credibility of Julie Kershaw was particularly challenged by the Claimant.  However, it is difficult in a matter such as this to prefer any particular version to the other.  I say that because the evidence given by the witnesses is to be assessed in light of the break down in the relationship between two brothers and all the emotions that flow from that.  In those circumstances it is understandable that the evidence will, in each instance, be tainted by the witness’s particular perspective as to what happened.  It will be possible, therefore, for two sets of witnesses to be giving truthful but different evidence on the same issue.  The emotional circumstances that surround the dispute can cloud what happened.  In such circumstances it will be difficult, if not impossible, to find a witness who can in an objective sense recall precisely what happened on any given issue.  In the circumstances I am not given to find that one brother is truthful and the other is not.  In my view they both attempted to give truthful evidence.  It is just that they recall the incidents differently.

34       So far as Julie Kershaw is concerned, I reject the contention that she fabricated documents for the purpose of this hearing.  Such is not demonstrated.  Her explanation concerning the reproduced documents such as payslips for example denotes innocent error.  In any event, much of the evidence on crucial issues does not stand in dispute.  In those circumstances it will be possible to consider the matter from a historical perspective of events gained from the evidence of both Glenn and Trevor Kershaw in particular and from Julie Kershaw to a lesser extent.

Findings

35       Notwithstanding the differing perspectives of witnesses it is nevertheless possible to distil certain facts from the evidence.

36       I find that in early 1992 Glenn was informed by Trevor that he would not be a partner in the business.  From that time onwards Glenn worked for Trevor providing his labour in the expectation that the building of a successful business would bring rewards in which Glenn would also share.  Given the close family ties and the good relationship between the brothers it is hardly surprising that all family members pulled together to advance the business.  I accept that the arrangements made were informal and that the promise of reward was somewhat nebulous.

37       It was the case however that at that time Glenn was paid a flat hourly rate which I accept was common within the industry.  His job was to operate an excavator and to carry out maintenance and mechanical repairs on the plant owned by the business.  The method of tax deduction was discussed.  I accept that at about that time it was an industry standard for tax to be deducted using PPS.  There were perceived benefits for employers and employees.  It presented employers with simplicity.  Employees benefited by being able to income split and gain tax deductions to which employees would not otherwise have been entitled.  I find that the arrangement for the implementation of the PPS was at Trevor’s direction because he was implementing the “industry standard”.  I accept Glenn’s evidence that he was presented with a “fait accompli”.

38       Consequently Glenn, together with this wife, created the business of Jade Earthmoving through which his hours worked were billed.  It is obvious that initially Glenn provided no more than his labour.  The formation of the business of Jade Earthmoving was nothing more than a vehicle to facilitate the industry standard of tax deduction by PPS.

39       Glenn worked for Trevor initially in the partnership name of T & J Kershaw and later in the business name of Rock N Tails until that business was incorporated in the same name.

40       Glenn commenced working as an excavator operator but as the business quickly grew, he was appointed RNT’s operations manager.  Glenn worked tirelessly without particular regard to pay or other conditions.  I accept that Glenn did not claim sick leave or annual leave.  That was in keeping with the industry standard and the billing arrangement.  Glenn was only paid for hours worked.  He worked long hours to do what was required for the advancement of the business in the expectation that he would one day benefit from a successful business. 

41       In about 1995 Glenn bought plant which was dry hired to RNT.  The purchase and subsequent hire of the plant to RNT was separate to Glenn’s work.  The dry hire of the plant was separately invoiced albeit through Jade Earthmoving.  The hire of the plant in my view is to be seen as distinct.  It was a separate enterprise which had no bearing on Glenn’s work.

42       Throughout the 1990’s Glenn worked for Trevor in the advancement of RNT.  There was no concern for formality.  Glenn just did what needed to be done.  His brother trusted him.  Glenn worked the hours that were necessary to achieve the task at hand and in that regard was left to his own devices.  Glenn was free to arrange his work situation as it best suited him.  He could take time off if needed.  He could come and go as he pleased, subject always to ensuring that he did that which was required.  If any extended period of leave was necessary such would be taken as required subject to Trevor being informed.  Those flexible arrangements are of the type that one would expect in a family situation.  Flexibility suited both parties.  There is no dispute about the fact that on 1 July 2000 Glenn became an employee and that his mode of remuneration and tax deduction changed.  That occurred because he did not meet the relevant test under the GST legislation for being a contractor.  Notwithstanding that, his work situation before and after the onset of the GST remained constant.

43       In about October 2002 Trevor and Glenn agreed upon an increase in the hourly rate and a reduction in Glenn’s work hours, however little else changed.  Glenn continued to operate with a high degree of autonomy.

44       In mid 2003 the Respondent became Glenn’s new employer.  Glenn signed an Employment Tax Declaration form on 1 August 2003 recognising that fact.  Notwithstanding that the legal entity which employed him had changed, little else changed.  Both RNT (except when under administration) and Sunvalley were controlled by his brother.  The personalities, the equipment, the work and such like remained constant.  Glenn continued his work in the same manner in which he had done for years.

45       In October 2003 Trevor caused 3D Earthmoving (Pty Ltd) to be incorporated.  It seems that 3D took over the business operated by Sunvalley.  Although Glenn knew of the existence of 3D he was unaware that the same was a corporation.  He thought it was no more than a trading name.  He did not sign a new Employment Tax Declaration form.  He was unaware that his employer had changed.  What happened was that Sunvalley unilaterally transferred his contract of employment to 3D being something it was not entitled to do.  In those circumstances Sunvalley remained, until termination, Glenn’s employer.

46       By late 2003 or early 2004, Glenn was in receipt of a salary of $109,200 per annum.  He was of the view that his salary was not commensurate with his efforts.  Accordingly at about that time he embarked upon the process of attempting to increase his rate of pay.  The pay issue ultimately led to dispute which was pivotal in the breakdown of Glenn’s relationship with Trevor and Julie.  It is obvious that Glenn thought that he was undervalued and underpaid.  On the other hand Glenn and Julie formulated the view that Glenn’s approach in demanding back pay equivalent to the incremental increases received by another employee was no more than a money grab aimed at lifting him and his wife out of their financial predicament. 

47       In an attempt to resolve their pay dispute and restore their relationship, Trevor and Glenn agreed to participate in mediation.  Glenn asserts that the mediation session held on 31 December 2004 resulted in a concluded agreement between them concerning the matters in issue.  Trevor denies that.  Unfortunately I have not had the benefit of Dawson Elliot’s evidence as to what occurred.  Notwithstanding that, I am nevertheless satisfied that there was a concluded agreement reached on 31 December 2004.  I do not accept that the parties left the meeting on the basis that Trevor was to make an offer in writing.  In my view the fact that Glenn abandoned his holiday plans and returned to Kalgoorlie in anticipation of resuming work is reflective of the concluded agreement.  Indeed his act constitutes part performance of the same.  It is most improbable for Glenn to have abandoned his holiday plans to return to Kalgoorlie in preparation to work if the issue remained in the air.  I am confident that the dispute had been resolved and the agreed terms simply awaited confirmation.  I find that it was agreed that Glenn’s remuneration was to be increased to $170,000 which included a $15,000 motor vehicle allowance subject to Glenn returning to work immediately.  I accept also that it was agreed Glenn would be paid $105,000 being equivalent to the amount received by his subordinate by way of incremental increases.  It is apparent that Glenn was not prepared to return to work until he had received written confirmation of the agreement.  I accept that it was agreed that Glenn would return to work immediately upon receipt of Trevor’s letter of confirmation. 

48       I infer that the payment of $105,000 remained a bitter pill for Trevor and Julie to swallow and that following the mediation session held on 31 December 2004 they balked at implementing what had been agreed.  Given the circumstances, distrust ensued and the relationship between Glenn and Trevor and his wife broke down irretrievably.  The inevitable consequence was that Glenn’s employment was terminated on 31 January 2005.

Determination

1.   Was the Claimant an employee for the period up to July 2000?

49       The Respondent submits that the fact that Glenn provided his labour through a partnership; issued invoices and was paid on a PPS basis all point strongly to the relationship being one of principal and contractor, rather than employer and employee.  Further it submits that a consideration of the relationship reveals that RNT through Trevor exercised little, if any, practical control of Glenn’s work.  Glenn decided when, how and for how long he worked.  He did not complete time sheets and no record was kept of his hours worked.  He was paid a flat rate completely inconsistent with the position of an employee.  His hours fluctuated greatly from week to week.  There was no regularity in the hours worked.  The fact that Glenn ran his own business styled “Jade Earthmoving” is reflected in the fact that the business hired out equipment and that Glenn provided his own mobile phone and motor vehicle for the business.  Depreciation and other expenses were claimed in tax returns for those items.   Further the Respondent points out that Glenn never received paid annual leave or sick leave benefits.  If he did not work he was not paid.  He took time off as and when it suited him.  He simply, as a matter of courtesy, would advise his brother of when leave would be taken.

50       The Respondent argues that the fact that Glenn remained a contractor when others moved to become employees in 1997-1998 reflects the true intention of the parties.  It is argued that the arrangement between the parties was not a sham but rather a genuine arrangement with respect to which Glenn took advantage through his tax returns. 

51       The Respondent submits that the fact that Glenn became an employee on 1 July 2000 is irrelevant.  He only became an employee because he did not meet the relevant test under the new GST legislation for being a contractor.  That was a statutory test which had no direct bearing at common law.

52       The Respondent points out that Glenn’s situation changed materially after 2000 in that he was paid a salary for which PAYG tax was deducted, a job description for his position was prepared, he filled in time sheets and was paid a fixed salary for 60 hours of work, being substantially less than that invoiced by Jade Earthmoving.

53       In United Construction Pty Ltd. v Birighitti 82 WAIG 2409 his Honour Sharkey P cited a number of principles which govern the determination of whether a worker is an employee or a contractor.  He said at page 2414;

(a) Whether a worker is an employee is a mixed question of fact and law.

(b) Ascertaining the terms of the contract and the correct inferences to be drawn from those terms, are questions of fact.  Whether or not the relationship arising from those terms is an employment relationship is a question of law (see Commissioner of Taxation (Cth) v J Walter Thompson (Australia) Pty Ltd [1944] 69 CLR 227 and Marshall v Whittakers Building Supply Co [1963] 109 CLR 210 at 216-217 per Windeyer J and also Australian Timber Workers’ Union v Monaro Sawmills Pty Ltd (1980) 29 ALR 322 (FC) per J B Sweeney and Evatt JJ at pages 323-324).

(c) (i) The nature of a contract of employment is to be ascertained from its terms, except when those terms are ambiguous or perhaps when they are a sham.

(ii) The nature of the relationship between an employer and a worker is determined by a proper characterisation of the contract between them.

(iii) Evidence relating to the subsequent conduct of the parties is admissible for the purpose of determining if the contract has been varied (see Australia Mutual Providence Society v Allan (1978) 52 ALJR 407 (PC) which was followed in Narich Pty Ltd v Commissioner of Payroll Tax (1983) 58 ALJR 30 (PC)).

(d) As many contracts to perform work are informal or not reduced to writing, it is often necessary to consider the totality of the relationship to ascertain the true nature of the contract (see Connelly v Wells (1994) 55 IR 73 (CA) per Gleeson CJ at pages 74-75).

(e) If the true parties to the contract are the employer and either a partnership or an employee corporation then it is very unlikely that the contract is an employment contract (see Australia Mutual Providence Society v Allan (op cit) (PC) at pages 410-411).

However, if the alleged partnership (or the attempted “incorporation” of the worker) is a sham or was divorced from the reality of the relationship then it will not be a bar to a finding of an employment contract (see Cam & Sons Ltd v Sargent (1940) 14 ALJR 162).

Remuneration of a worker need not be paid to the worker directly (see BWIU v Odco Pty Ltd (1991) AILR 239).

(f) An express term in a contract indicating the nature of the relationship created by it will carry weight in determining whether the relationship is one of employment (see Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 and Australia Mutual Providence Society v Allan (op cit) (PC)).

This is especially true if the contract and relationship are otherwise ambiguous (see Australia Mutual Providence Society v Allan (op cit) (PC) and Narich Pty Ltd v Commissioner of Payroll Tax (op cit) (PC)).

(g) However, a statement in a contract categorising the relationship as either one of employment or not does not determine the issue (see Cam & Sons Pty Ltd v Sargent (op cit)).

(h) If the expressed intention of the parties are a sham, or the evidence clearly establishes that the term categorising the relationship is misleading and contrary to the established facts then the term will be ineffectual (see Cam & Sons Pty Ltd v Sargent (op cit) at page 162 and also Neale v Atlas Products Pty Ltd [1955] 94 CLR 419 and also see Australia Mutual Providence Society v Allan (op cit) (PC)).

(i) The parties cannot alter the substance or true nature of their relationship by such an express term (see Cam & Sons Pty Ltd v Sargent (op cit)).

(j) An employee can arrange for remuneration to be paid by the employer to a partnership or a corporation without such arrangement affecting the nature of the relationship between the employee and the employee (see Burke v Reander Pty Ltd (1996) 69 IR 346 and Ellis v Saks Design Pty Ltd (1997) AILR 2963).

(k) (i) In determining whether an employment relationship exists there is no single test to be applied.

(ii) The correct approach is to consider a wide range of indicia, none of which is determinative by itself (see Stevens v Brodribb Sawmilling Co Pty Ltd (op cit) per Mason CJ, Brennan J, Wilson and Dawson JJ and Deane J) (see also Hollis v Vabu Pty Ltd (Trading as Crisis Couriers) (2001) 181 ALR 263 (HC)) (see also Augustyn v Vistadale Pty Ltd as trustee for the Ranger Family Trust trading as Ranger Contracting (2002) 82 WAIG 939 (FB)).

(iii) A considerable amount of discretion is left in the hands of the court determining the issue (see Articulate Restorations and Development Pty Ltd v Crawford (1994) 57 IR 371).

(iv) It is fair to say that the courts engage in balancing a number of factors (see Stevens v Brodribb Sawmilling Co Pty Ltd (op cit)).

(l) In ascertaining whether an employment relationship exists, the control test is “significant” and “remains the surest guide” (see again Stevens v Brodribb Sawmilling Co Pty Ltd (op cit)).  That test, however, is not the sole criteria and is not in itself sufficient to conclusively determine the nature of the relationship (see Queensland Stations Pty Ltd v Commissioner of Taxation (Cth) [1945] 70 CLR 539).

(m) The mode of remuneration is one of the factors to be taken into account when determining if an employment relationship exists, but it is not alone determinative of that fact (see Stevens v Brodribb Sawmilling Co Pty Ltd (op cit) at pages 24 and 37, and see Queensland Stations Pty Ltd v Commissioner of Taxation (Cth) (op cit) also).

(n) The provision of benefits commonly provided to an employee is relevant in determining if an employment relationship exists ((eg) holiday pay, long service leave, PAYE tax, etc).

(o) Whether or not a worker is in business on his or her own account is irrelevant indicium in determining whether an employment relationship exists (see Marshall v Whittakers Building Supply Co (op cit)).

(p) Whether or not a worker is “part and parcel” of an organisation is a factor to be taken into account when determining if an employment relationship exists (see Commissioner of Taxation (Cth) v Barrett [1973] 129 CLR 395).

Put another way the question is whether the worker is an integral part of the business of he employer (see Commissioner of Taxation (Cth) v Barrett (op cit)).

(q) Whether tax deductions are or are not made from the remuneration paid to a worker and the type of tax that is deducted from that remuneration is relevant in determining whether an employment relationship exists (see Stevens v Brodribb Sawmilling Co Pty Ltd (op cit) and Climaze Holdings Pty Ltd v Dyson (1995) 13 WAR 487).

(r) These factors are not determinative ((ie) whether tax is deducted on a PAYE basis or not) (see Stevens v Brodribb Sawmilling Co Pty Ltd (op cit) per Wilson and Dawson JJ).

(s) In certain circumstances it has been held that the weight given to those factors is slight (see Connelly v Wells (op cit) (CA) and see Re Porter; Transport Workers’ Union (1989) 34 IR 179 per Gray J, and see also Australian Timber Workers’ Union v Monaro Sawmills Pty Ltd (op cit)).

For example, if the parties have adopted a particular tax position based on advice from others, and if weight is to be placed on this indicium, then the court is assuming that the parties are complying with the laws (see Australian Timber Workers’ Union v Monaro Sawmills Pty Ltd (op cit) at pages 378-379).

(t) Given the uncertainty of that assumption, heavy reliance should not be placed on those factors (see Re Porter; Transport Workers’ Union (op cit) per Gray J).

On the other hand courts have been critical of workers who seek to claim the benefits of income tax laws by representing themselves as independent contractors yet who represent themselves as employees for the purpose of claiming a statutory or other benefits (see Barro Group Pty Ltd v Fraser [1985] VR 577 at 180, but see also Jennings Industries Ltd v Negri (1982) 44 ACTR 9 per Kelly J).

54       It will be obvious from the authorities that there is no single test to determine the issue of whether a worker is an employee.  It will be necessary to consider a wide range of indicia.  Whilst the control test is the most significant and remains the soundest guide, it is not the sole criterion.  In this matter, where the arrangement was informal and not reduced to writing, it will be necessary to consider the totality of the relationship to ascertain its true nature. 

55       From 1992 until termination Glenn was an integral part of the business.  He played a key role in generating goodwill for the benefit of Trevor and Julie’s business.  He did not concern himself with conducting or promoting his own business.  In reality he did not have a business.  He was paid a flat rate for the hours worked.  Such represented no more than payment for his labour.  He was not required to provide his own tools or equipment to carry out his job.  I acknowledge however that he used his own motor vehicle and mobile telephone in the performance of his duties. 

56       Until about 1995 when plant was acquired, Jade Earthmoving produced no income by way of profit.  The only income of the partnership was the receipt of payment in the nature of wages for hours worked by Glenn.  The partnership did not conduct a business.  From about 1995 until the dissolution of the partnership, it provided plant to RNT.  Glenn’s acquisition and dry hiring of plant to RNT through Jade Earthmoving was, in my view, a distinct enterprise separate from his work for RNT.  At that time Jade Earthmoving derived income from two sources being from the dry hire of plant and from Glenn’s labour.  In the circumstances he was in two distinct but concurrent relationships with RNT.  In one instance he hired plant to RNT and in the other he worked for RNT.  The relationships coexisted.  They were not mutually exclusive.

57       In my view the evidence establishes that if it were not for the mode of payment and deduction of tax there would be no difficulty in finding that Glenn was an employee.  The adoption of PPS of tax deduction caused the creation of Jade Earthmoving for the sole purpose of facilitating the receipt of income from Glenn’s labour.  In those circumstances the creation of the partnership had little significance other than being a receptacle for the receipt of money earned.  It was only later that the partnership was, as part of a separate enterprise, utilised as a vessel for the receipt of income derived from the dry hiring of plant.  Glenn was clearly an employee when working as an excavator operator.  When he became RNT’s operations manager his role obviously changed.  In that capacity he functioned with a high degree of autonomy.  He was not required to fill in time sheets and was trusted with respect to claims made for hours worked.  In reality he was treated as any other senior executive would be treated.  Although autonomy is part and parcel of such a position, the employer’s right to exercise control always remains.  The worker in such circumstance is always subject to control and may be required to account if called upon to do so.  Glenn was no different.  In his position of “operations manager” he always remained responsible and accountable to Trevor.  That of itself was more in keeping with him being an employee rather than a contractor.

58       The mode of payment and tax deduction must be carefully considered in determining whether there existed an employment relationship.  Jade Earthmoving rendered accounts to RNT calculated by reference to a flat hourly rate for work done by Glenn, which amounts were accepted and paid by RNT.  This enabled Glenn to submit partnership tax returns and present himself to the Australian Taxation Office as an independent contractor not an employee, and claim and obtain the entire income tax benefits attendant upon that status.  These facts tend to indicate that the relationship between the parties was intended to be that of principal and independent contractor.  On the other hand there was no change in the manner in which Glenn performed his work for RNT from 1 July 2000 onwards.  He performed exactly the same duties as an operations manager.  He took on no other business activity.  The grader which had been dry hired by Jade Earthmoving had been transferred to his second wife.  He accordingly did not have any direct involvement with that enterprise.  He worked full time and exclusively for RNT and later the Respondent.  The most significant change occurred on 1 July 2000 when the mode of tax deduction previously adopted could no longer apply.  That necessitated a change in accounting for the hours Glenn worked.  He could no longer render accounts for hours worked and accordingly the keeping of time sheets was required by RNT so as to enable it to pay Glenn each pay cycle.  The keeping of time sheets was in substitution of the previous process and had no more significance than that.

59       The Claimant’s agent submitted that the use of PPS is neither persuasive nor confirmatory of any intention to establish a subcontractor relationship because it is obvious that it was implemented to take advantage of the tax laws and to make the accounting process more convenient.  He says that there was no consideration given by either party to what the legal nature of the relationship was going to be.  Further that when examined objectively the notional subcontractor relationship between the parties must be seen as a sham, that is something false that is purported to be genuine.  In that regard for there to be a finding that the subcontract arrangement was a sham does not require the parties to have knowingly intended to deceive because that conclusion could be reached even if they were recklessly indifferent to, or ignorant about, the notional effect of the label they put on the relationship.  However I am satisfied that the parties did not intend to create a sham but rather that they adopted the PPS method of tax deduction because that was the way things were done in the industry back then.   I accept that it was perceived to be an industry standard.  Consequently, Trevor presented to Glenn that form of tax deduction as a fait accompli.  It was administratively easier for him and I am sure that he thought that such would also be beneficial for Glenn in that it would bring tax benefits.  The mode of tax deduction had nothing to do with defining the relationship between them and all to do with administrative convenience.  Glenn worked for Trevor in the advancement of Trevor’s business.  He did not work for anyone else.  He had an expectation of regular weekly work on an ongoing basis.  Continuity of employment was a given.  There was no suggestion that Glenn’s work was determinable at any stage at the whim of either party.  Both parties carried on as an employer and employee would under a continuing contract of employment. 

60       The evidence establishes that nothing really changed in Glenn’s situation from 1 July 2000 onwards, except for the treatment of his income tax.  The onset of the GST caused the parties to act appropriately given the reality that Glenn had always been an employee and that the PPS should not have been used in the first place.  The industry practice which had previously enabled employees including Glenn to inappropriately receive tax benefits of the type usually attendant upon contractors was brought to an end.

61       Finally I need to make comment about the Respondent’s submission that the change in Glenn’s role from contractor to employee on 1 July 2000 is demonstrated by the preparation of a job description for his position and the requirement that he complete time sheets.  In that regard I am satisfied that the preparation of a job description for Glenn’s position had nothing to do with a change in Glenn’s status but rather was something which became necessary for a tender process.  In any event the job description simply reduced to writing what had hitherto been Glenn’s functions and responsibilities as an operations manager.

62       I find that Glenn had, at all material times, been an employee of T and J Kershaw, RNT and the Respondent.

2. Did the Claimant have an annual leave entitlement in respect of the period July 2000 to July 2003 when there is no dispute that Rock N Tails Pty Ltd was the Claimant’s employer?

63       It is not contested that the Claimant was RNT’s employee between July 2000 and July 2003.  Given that there is no evidence of an agreement made pursuant to section 8 of the Minimum Conditions of Employment Act 1993 (MCEA) for Glenn to forgo his entitlement to annual leave for an equivalent benefit; it is the case that he accrued an entitlement to annual leave for that period.  It appears he did not take annual leave during that period and therefore that he may be able to recover payment in that regard.

3. If Glenn had any annual leave entitlement owing to him from RNT Pty Ltd as at 1 July 2003 in respect to any period of prior service as an employee, does this Court have jurisdiction to order Sunvalley Australia Pty Ltd to pay him with respect to such entitlement?

64       The Respondent asserts that given the basis of Glenn’s claim is against Sunvalley for annual leave entitlements allegedly accrued whilst he was an employee of RNT, that this Court does not have jurisdiction to determine his claim in that regard. 

65       Section 5(1)(c) of the MCEA provides that the minimum conditions of employment which includes the right to annual leave, extend to and bind all employees and employers and are taken to be implied in “a contract of employment”.  Section 7(c) of the MCEA provides that where the condition is implied in a contract of employment it may be enforced under section 83 of the Industrial Relations Act 1979 (IRA) as if the conditions were a provision of an award, industrial agreement or order.  Accordingly in order to enliven the jurisdiction of this Court Glenn must establish Sunvalley’s liability for any accrued annual leave pursuant to a contract of employment between them. 

66       The Respondent argues that it was not party to a contract of employment with respect to which the claim for annual leave prior to 1 July 2003 relates.  Whilst there was, from 1 July 2003 until termination a contract of employment between Glenn and Sunvalley that cannot be the source of Glenn’s claim against Sunvalley.  The entitlements allegedly accrued relate to Glenn’s contract of employment with RNT which has nothing to do with Sunvalley.

67       Glenn on the other hand says that his claim for annual leave is based on an assignment of his contract of employment from RNT to Sunvalley and on an agreement made pursuant to section 8 of the MCEA of which the Deed between RNT and Sunvalley is evidence.  He points out that he and other RNT employees transferred their employment to Sunvalley.  The transfer of Glenn’s contract of employment and RNT’s obligations there under to Sunvalley was done with his consent.  It was a consensual assignment.  It follows that all obligations owing under the assigned contract were assumed by Sunvalley.  Further he argues that by consenting to the transfer of those obligations from RNT to Sunvalley, he entered into an agreement with his employer to forgo the annual leave entitlements owed by RNT in return for an equivalent benefit.  The “equivalent benefit” was truly that because it was that Sunvalley Australia Pty Ltd would assume the obligations.  He argues that the agreement was in writing and satisfies section 8 of the MCEA.  He points out that the MCEA does not require the agreement to be executed by all the parties to it.  Furthermore Glenn points out that only an Industrial Magistrates Court can determine if Sunvalley owes any annual leave, the quantum thereof and make orders accordingly.  It has exclusive jurisdiction in that regard.

68       In my view there are difficulties with the arguments that Glenn advances.  The primary difficulty is that the Deed (exhibit C8) is not a contract of employment.  Glenn is not party to it.  It contemplates new separate contracts of employment with “Transferring Employees” including Glenn.  The Deed did not reflect an assignment of employment.  The Deed acknowledged the release of all transferring employees from RNT’s employment from 30 June 2003.  The Respondent agreed to assume any employee entitlement owing by RNT as at 1 July 2003.  It confirmed the offer of employment to employees on the same terms and conditions previously offered by RNT.

69       Glenn had no part to play in the agreement between RNT and Sunvalley as is reflected in the Deed.  His consent to the assignment was never sought, acquired or indeed given.  There was no transfer of employment.  He ceased working for RNT and commenced working for Sunvalley.  The Deed reflects that.  Further the Deed does not indicate or constitute an agreement of the type referred to in section 8 of the MCEA.  Glenn was not a party to the Deed.  In my view any agreement pursuant to section 8 of the MCEA requires it to be between an employer and employee, to be expressed in such terms and to be signed by both parties.  That did not occur in this instance.  No such agreement was made.

70       I am in complete agreement with the submission made by the Respondent that this Court is without jurisdiction to determine that part of Glenn’s claim which relates to annual leave entitlements accrued whilst working for RNT.  It seems that Glenn’s recourse is against RNT.

4.   Was Sunvalley Australia Pty Ltd the employer of the Claimant at the time of termination?

71       The question is resolved in the affirmative.  Indeed the Respondent no longer takes issue with the fact that Glenn was Sunvalley’s employee at the time of termination.  Even if that concession had not been made the evidence before the Court would have enabled findings to have been made that Glenn was Sunvalley’s employee at termination.

5.   If the Claimant was an employee prior to July 2000 had the Claimant on 31 January 2005 completed 10 years or more of continuous long service leave within the meaning of the Long Service Leave Act 1958?

72       Section 6(4)(i) of the LSLA deems employment to be continuous when there has been a transmission of business from one employer to another and an employee of the transmittor becomes an employee of the transmittee.  The Respondent does not take issue with the jurisdiction of this Court to determine the claim for long service leave, insofar as the Claimant can base his claim on a transmission of business as provided for in the LSLA rather than the Deed.

73       Relevantly subsection 6(4) of the LSLA provides:

(4)(i) Where a business has, whether before or after the coming into operation hereof, been transmitted from an employer (herein called “the transmittor”) to another employer (herein called “the transmittee”) and an employee who at the time of such transmission was an employee of the transmittor in that business becomes an employee of the transmittee-the period of the continuous employment which the employee has had with the transmittor (including any such employment with any prior transmittor) shall be deemed to be employment of the employee with the transmittee.

  (ii) In this subsection “transmission” includes transfer, conveyance, assignment or succession, whether voluntary or by agreement or by operation of law, and “transmitted” has a corresponding meaning.

74       The evidence overwhelmingly establishes that the earthmoving business in which Glenn was employed was transmitted from the partnership T and J Kershaw to RNT and then onto the Respondent.  The question remains however as to whether Glenn was continuously employed in that business.

75       Pursuant to section 6 of the LSLA an employee’s employment is deemed to be continuous notwithstanding certain absences from duty.  All absences authorised by an employer can be taken into account as part of an employee’s continuous service (see section 6(2)(d) of the LSLA).  The evidence establishes that all of Glenn’s absences on leave including his extended period of sick leave were authorised.  Section 6(1)(b) of the LSLA does not prevent an employer from authorising the taking of more than 15 days sick leave each year.  In such circumstances section 6(2)(d) of the LSLA has application to deem all such authorised leave taken to be part of the employees’ continuous service. 

76       The evidence establishes that Glenn was in continuous employment from early 1992 at the very least until termination on 31 January 2005.  It follows that Glenn had completed ten years or more of continuous service at the time of his termination having worked in the earthmoving business for T and J Kershaw, Rock N Tails Pty Ltd and Sunvalley Pty Ltd.  There was no break in his continuity of service.  He remained an employee throughout.  Even in 2002 during his extended absence because of sickness, he continued to be treated as an employee and was paid as such.  Glenn’s absence was approved and encouraged to assist him in his rehabilitation and return to active duty. 

77       It will be obvious from what I have said that Glenn was in the continuous service of the Respondent for more than ten years.

6.   If the Claimant had, at the time of his termination of employment on 30 January 2005, completed 10 years or more of continuous service within the meaning of the terms in the Long Service Leave Act 1958, was Sunvalley Australia Pty Ltd liable to pay the Claimant anything in the way of long service leave benefits?

78       The Claimant abandons any claim for long service leave entitlement in excess of twelve years continuous service.  Given that the claim is limited to twelve years service there can be no difficulty, given my earlier findings, in concluding that Glenn has completed or is deemed to have completed twelve years of continuous service with respect to which the Respondent is liable.  Sunvalley was the last in line of transmittees that conducted the business in which Glenn had been employed.

7.   If there are any entitlements owing, at what rate of pay should they be calculated?

79       It is common ground that prior to 31 December 2004 Glenn’s salary was $109,000 a year.  However on 31 December 2004 an agreement was reached that his salary would be increased to $155,000 per annum.  It was also agreed at that time that he was to be paid an additional amount of $15,000 per annum by way of car allowance.  As indicated earlier, I find that the agreement reached on 31 December 2004 was a concluded agreement which was operative and not contingent upon any particular event.  It was operative upon termination.  The agreement had not been rescinded or rendered inoperative.  It follows that Glenn’s annual salary at termination was $170,000 which included the $15,000 motor vehicle allowance.  Section 9(2) of LSLA provides that where payment in lieu of long service leave is made the employee is deemed to have commenced leave immediately prior to termination.  Accordingly, the question to be asked is what was Glenn’s rate of pay at that time?  The answer is $170,000 per annum.  That is the rate at which he would have been paid had he taken long service leave.  There can be no doubt that the $15,000 vehicle allowance would have been rolled up with his salary to provide the annualised figure of $170,000 apportioned each pay period.

Conclusion

80       This Court lacks jurisdiction to determine the issue of annual leave entitlements accrued by the Claimant with respect to his employment by T and J Kershaw and Rock N Tails Pty Ltd.

81       Insofar as his claim for annual leave relates to the Respondent for the period July 2003 until termination, it has not been established that there has been a failure on the part of the Respondent to pay the Claimant’s entitlements in that regard.

82       The claim with respect to long service leave is made out.  Pursuant to section 8(3) of the LSLA the Claimant’s entitlement is calculated as follows:

12 ÷ 15 x 13 = 10.4weeks x $3,269.2308 ($170,000 ÷ 52) = $34,000.00 

83       The Claimant is accordingly entitled to payment with respect to untaken long service leave in the amount of $34,000.00.

84       I will now hear from the parties regarding the orders to be made.

G Cicchini

Industrial Magistrate