WESTERN AUSTRALIAN INDUSTRIAL MAGISTRATES COURT

CITATION : 2015 WAIRC 00018

DELIVERED : WEDNESDAY 21 JANUARY 2015

FILE NO. : M 47 OF 2013

CLAIMANT

AND

J-CORP PTY LTD

RESPONDENT

FILE NO. : m 48 OF 2013

CLAIMANT

AND

J-CORP PTY LTD

RESPONDENT

Catchwords : Claimants assert entitlement to four weeks’ paid annual leave per year of service as full-time employees under the Minimum Conditions of Employment Act 1993 (WA), the Workplace Relations Act 1996 (Cth), and the Fair Work Act 2009 (Cth); Whether accrued annual leave should have been paid on termination of employment; Whether the Claimants, engaged as Sales Consultants by the Respondent, were remunerated wholly by commission or percentage reward; Whether the Claimants were entirely remunerated by incentive-based payments; Whether the Claimants took annual leave in any event; Whether the claims fall outside the limitation periods; Whether annual leave accrued during periods of leave taken;  Whether the quantum claimed was appropriately calculated.

Legislation : Industrial Relations Act 1979 (WA)

  Minimum Conditions of Employment Act 1993 (WA)

  Minimum Conditions of Employment Regulations 1993 (WA)

  Workplace Relations Act 1996 (Cth)

  Fair Work Act 2009 (Cth)

  Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth)

  Fair Work Regulations 2009 (Cth)

       Acts Interpretation Act (Cth)

Instruments

Referred to in

Judgement :  Vehicle Manufacturing, Repair, Services and Retail Award 2010 (MA000089)

Real Estate Industry Award 2010 (MA000106)

Cases Referred to

in Judgement : David John Hignett v Joburne Pty Ltd (2000 WAIRC 01598)

  Gregory Oats v Sanders Executive Pty Ltd (1999) 79 WAIG 3543

  ACE Insurance Limited v Trifunovski (No 2) [2012] FCA 793

Result : Claims not proven

Representation

Claimants : Mr P Mullally (Agent), of Workclaims Australia, appeared for the Claimants

Respondent : Mr A Power (Counsel), instructed by Squire Patton Boggs, appeared for the Respondent

REASONS FOR DECISION

Background

1          Mr Hugh Sutherland Rogers (Mr Rogers) and Mr Andjelko Budimlich (Mr Budimlich) are former employees of J-Corp Pty Ltd (the Respondent).  Mr Rogers worked for the Respondent from 24 December 1993 until his dismissal on 18 December 2012.  Mr Budimlich commenced working for the Respondent on 19 May 1997 and resigned from that employment on 2 November 2011.  Mr Rogers and Mr Budimlich were both employed as sales consultants and sold the Respondent’s home building products.  They were paid on commission, based on results.

2          Mr Rogers and Mr Budimlich claim that they were, upon the cessation of their employment, not paid for periods of untaken annual leave.  Mr Rogers claims that he is entitled to the payment of 76 weeks’ of untaken annual leave.  Mr Budimlich claims he is entitled to the payment of 56 weeks’ of untaken annual leave.

3          The Respondent, for reasons which will be outlined later in these Reasons for Decision, denies both claims.

Statutory Framework

4          The claims are founded on the relevant industrial legislations that governed Mr Rogers’ and Mr Budimlich’s employment.  There was, during the material period, changing legislation.  There is no dispute that the employment of Mr Rogers and Mr Budimlich can be recognised as fitting into three relevant periods which are identified by the legislation governing their employment at the time:

5          When the Workplace Relations Act 1996 (Cth) (WR Act) commenced, the Minimum Conditions of Employment Act 1993 (WA) (MCE Act) became, under Schedule 8 of the WR Act, a Notional Agreement Preserving State Awards (NAPSA).  Given that Mr Rogers’ and Mr Budimlich’s conditions of employment had been governed by the MCE Act when the NAPSA came into operation (Schedule 8: section 31(b)), Mr Rogers, Mr Budimlich and the Respondent became bound by the NAPSA (Schedule 8: section 32(1)).  It was a term of the NAPSA that accrued annual leave under the MCE Act was preserved (Schedule 8: sections 34(2) and (3)).  When the Fair Work Act 2009 (FW Act) repealed the WR Act and came into operation, any accrued rights were not affected by the repeal of the WR Act (see section 8, Acts Interpretation Act (Cth)).  The NAPSA became a WR Act instrument and continued in existence pursuant to Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth).  Consequently, accrued entitlements were preserved and carried forward.

Reasons for Denying the Claims

6          The Respondent denies the claims for the following reasons:

• Ground 1

For the period of employment during which the MCE Act applied, Mr Rogers and Mr Budimlich were not employees within the meaning of that Act because they were paid wholly by commission or percentage reward.

• Ground 2

For the period that the WR Act applied, Mr Rogers and Mr Budimlich were not entitled to be paid annual leave on the basis that annual leave is paid by reference to the employee’s basic periodic rate of pay (section 235(1), WR Act) which excludes incentive-based payments (section 178, WR Act).  Mr Rogers and Mr Budimlich were remunerated entirely by incentive-based payments.

• Ground 3

Further and in any event, Mr Rogers and Mr Budimlich have taken annual leave.  Any claim for the payment of unpaid annual leave runs from the time such leave was taken.  The limitation periods contained in the Industrial Relations Act 1979 (WA) (the IR Act) and the WR Act have the effect of making part of the claims statute barred.

• Ground 4

Mr Rogers and Mr Budimlich took annual leave and were remunerated in the same way as they would otherwise be remunerated during periods of work, being by payment of commission.

• Ground 5

Mr Rogers and Mr Budimlich have not accrued the amount of leave asserted, and the rate of pay applicable to annual leave not taken is not that which they assert.

7          The Respondent also raised a sixth ground of defence but for reasons given during the course of the Trial, was not permitted to pursue that ground.

Evidence

Mr Rogers

8          On 25 December 1993, Mr Rogers entered into a written agreement with the Respondent.  The agreement, entitled Finance and Housing Consultants Agreement (for Individual Acting as a Consultant) (Rogers Agreement), provided that Mr Rogers was engaged to secure clients and to sign contracts for home construction. 

9          Clause 19 of the Rogers Agreement provided:

“19.1 The relationship between the parties hereto shall be that of the Company and an independent consultant, and nothing herein shall be deemed to comprise a contract of employment or a partnership, joint venture or any other than an association between the Company and the Consultant other than an association between the Company and an independent contractor”.

10       It was agreed by the parties that Mr Rogers would be remunerated by commission in accordance with the Commission Schedule set out in Annexure A of the Rogers Agreement.  In addition to outlining the commission payable, the Commission Schedule also contained the following provision:

 “Holidays are to be paid quarterly”. 

11       The source for that reference was Clause 6.5 of the Rogers Agreement, which provided:

“6.5 In addition to the remuneration commission referred to herein the Company shall pay to the Consultant on a quarterly basis a holiday pay allowance as set out in the commission schedule”.

12       The reference to holidays in the Commission Schedule was contextually incongruent with the balance of the Schedule which inter alia sets out the rate of commission payable.  The “holiday pay allowance” provision within the Schedule does not set out any particular rate.

13       Mr Rogers’ evidence is that his remuneration was primarily, but not wholly, based on commission.  In addition to commission payments received he was also paid long service leave and superannuation throughout his employment.

14       Mr Rogers testified that he worked full-time for the Respondent and was not permitted to work for others.  All of his “leads” were owned by the Respondent.  The Respondent allocated Mr Rogers an office, a desk phone, and a computer (from 2007 onwards).  Mr Rogers was provided with keys to the Respondent’s building, enabling him access to it as required.

15       Mr Rogers says that his remuneration package during Period 1 consisted of commission payments, lump sum bonuses and overseas trips.  He also received salary continuance insurance through the Respondent’s superannuation scheme, however, that ceased in around August 2003.  In 2005, Mr Rogers had a dispute with the Respondent concerning bonus payments.  It suffices to say, that that dispute was resolved.

16       On 17 December 2010, Mr Rogers was granted long service leave.  He took that leave between 13 July 2011 and 20 August 2011 and was paid for it.

17       Following his dismissal, Mr Rogers commenced an action claiming that he was unfairly dismissed.  That action was resolved. 

18       Mr Rogers subsequently initiated this claim, in which he initially sought payment in the sum of $55,176.00, being payment equivalent to 76 weeks’ of unpaid annual leave, calculated on a gross weekly income of $726.00.

19       Following the receipt of discoverable documents, Mr Rogers submitted that his entitlement was that of $120,549.68, rather than the amount originally claimed.  Mr Rogers’ position was that commissions paid to him in December 2012 significantly increased his total earnings in his final 12 months of employment with the Respondent.  His total gross earnings for that period were $82,481.27, equating to a gross weekly income of $1,586.18.  At the commencement of the Trial, I was advised by Mr Rogers’ agent that his claim would not be one for $120,549.68, but rather an amount of $44,387.00.  That calculation was based on the weekly rate of $584.05, as had been outlined in Mr Rogers’ Amended Particulars of Claim lodged on 18 February 2014.

Mr Budimlich

20       On 21 May 1997, Mr Budimlich entered into a written contract entitled Agreement for Home Building Sales Consultants (Budimlich Agreement).  The Budimlich Agreement provided that Mr Budimlich would be remunerated based on commissions in accordance with the Commission Schedule for Consultants Holding Real Estate Sales Person’s Licence (Budimlich Commission Schedule) in Annexure A.  The terms of Mr Budimlich’s remuneration were governed by Clause 6 of the Budimlich Agreement.  Relevantly, Clause 6.2 provided:

 “6.2 The Consultant acknowledges that the total of all remuneration payable under this contract is earned as commission only and that the Minimum Conditions of Employment Act (1993) has no application whatsoever.”

21       Mr Budimlich says that his remuneration was primarily, but not wholly, based on commission.  He was paid superannuation, long service leave and a range of incentive-based payments.  Mr Budimlich was paid in accordance with a Sales Award and Incentive Scheme which the Respondent operated.  He was the Respondent’s representative of the year for four years running and was paid additional incentive-based lump sums of $5,000.00, $8,000.00, $10,000.00 and $8,000.00 for those respective years.  The incentive-based lump sum payments were subject to tax deductions and were paid to Mr Budimlich in the normal course of his regular remuneration.

22       Mr Budimlich also received other small incentive-based payments in the form of gift vouchers, restaurant vouchers and cash.  A number of other incentive-based payments such as quarterly prizes valued at between $2,000.00 and $5,000.00 were also received.

23       In the financial year ending 30 June 2004, Mr Budimlich achieved over $15,000,000.00 in net sales turnover.  In light of that achievement, he subsequently asked the Respondent to build a family home for him at cost price.  The Respondent refused, but gave Mr Budimlich a 10% discount on the standard retail price.

24       Mr Budimlich last worked for the Respondent on 8 August 2011.  He then went on 12 weeks’ long service leave and on completion of that leave on 2 November 2011, resigned from his employment.

25       At the time that Mr Budimlich’s employment came to an end he had been earning an equivalent of a gross weekly wage of $2,971.12.  He therefore claims 56 weeks of annual leave based on his average weekly earnings of $2,971.12, totalling $166,382.72.

Mr Kelvin Ryan

26       Mr Kelvin Ryan is the Executive General Manager of the Respondent.  Mr Ryan first joined the Respondent in 2003, in that same capacity, but left in 2005.  He returned to the Respondent in 2009, originally as a contractor but was then reappointed as Executive General Manager in August 2010.  Mr Ryan also concurrently holds the position of Executive General Manager of the Respondent’s associated company, B.G.C. Residential Pty Ltd (BGC).

27       Both the Respondent and BGC operate a number of different housing brands to cater for all sections of the housing market.  Mr Ryan is responsible for the overall management of both companies, and the Branch Managers report to him.  He had the management responsibility for both Mr Rogers and Mr Budimlich, each of whom he knew personally, and spoke to them two to three times a month.

28       Mr Ryan said that the only requirement placed on Mr Rogers and Mr Budimlich was that they attend a weekly sales meeting and that they, when required, attend one of the Respondent’s display homes for up to 14 hours per week.  They otherwise had the freedom to decide which hours they worked.

29       Mr Ryan asserts that in accordance with the Budimlich Agreement, Mr Budimlich’s remuneration was by commission only, with superannuation and long service leave having been paid in accordance with statutory requirements.  Mr Budimlich was not paid a retainer.  The more he sold, the more he earned.

30       Mr Ryan pointed out that the commission rate would increase in accordance with what was set out in the Budimlich Commission Schedule.  Achieving a higher commission rate is commonly known as “bonusing”.  In other words, if someone had “bonused” or “made bonus” that particular month, it meant that they had attained the higher commission rates referred to in the Commission Schedule of their Agreement.

31       Another type of additional commission or incentive-based payment included a quarterly award referable to the amount of gross sales achieved in the previous quarter.  In 2008, a payment of $1,500.00 was achieved for 15 or more gross sales per quarter, and $5,000.00 for 25 or more gross sales.

32       Another form of incentive-based payment was an annual award derived solely from the number of sales achieved in the previous year.  The award was a monetary award, payable on the proviso that the entire sales team and the individual achieved a sales target.  In 2008, an award of $20,000.00 was paid when the individual had achieved 60 net sales in that year.  There were prizes also for second and third highest achieving sales consultants.

33       From time to time, other ad-hoc discretionary incentives were offered to encourage greater performance.  Those incentives included rewards such as vouchers, restaurant vouchers, and the payment of holiday travel costs.  An additional commission structure was in place for those consultants who achieved a very high dollar value in sales.  Mr Budimlich achieved that in 2002.

34       Mr Ryan agrees that Mr Budimlich received a 10% discount on the build of a new home as part of an incentive, but says that did not occur until June 2007.

35       Turning to Mr Rogers, Mr Ryan points out that he too was paid on a commission only basis.  He says that the reference in Clause 6.5 of the Rogers Agreement to a holiday pay allowance was a drafting error because there is no provision for any holiday pay allowance.  Neither Mr Rogers nor any other consultant was ever paid a holiday pay allowance.

36       Mr Rogers was not paid a retainer or other payment, not being commissions, other than the statutory payment of superannuation and long service leave.

37       The additional commission arrangements in the form of “bonusing” applied to Mr Rogers, however, other additional commissions or arrangements in his area of sales was the exception rather than the rule.  Mr Rogers only received three additional payments in the 13 year period from 1993 until 2006.

38       Mr Ryan said that as commission only employees, as opposed to salaried employees, Mr Budimlich and Mr Rogers were given a high degree of autonomy over when and how they carried out their work.  In practice, they were more akin to independent contractors than to employees.  Mr Rogers and Mr Budimlich were able to take any amount of leave they wanted, without formally applying for it or requesting permission from their Manager.

39       Further, the Respondent imposed a company-wide shutdown at Christmas time.  There was a requirement for all staff to take annual leave during that shutdown period.  The office and all display homes attended by the Respondent’s sales representatives were closed during the Christmas shut down period.  In fact, display homes sometimes remained closed for a week or two beyond the shutdown period.  Mr Budimlich and Mr Rogers would have been on leave for at least those two weeks each year.

40       Mr Ryan says that throughout his employment, Mr Rogers took regular time off to go to his farm.  In speaking with Mr Rogers, he would often tell Mr Ryan that he was going to his farm.

Ms Tonya Miller

41       Ms Tonya Miller is the Organisational Development Manager, employed by BGC. Ms Miller works for BGC and its associated company, the Respondent.  She is responsible for organisational development, strategic recruitment, staffing and subcontract issues relating to the Respondent.

42       In preparation for the Trial of these claims, Ms Miller caused the interrogation of the Respondent’s data management systems.  That task was done by Mr Adam Stafford, Manager, Forensic Services at BDO Corporate Finance (WA) Pty Ltd (BDO).  Mr Stafford also interrogated the laptop computer which had been supplied to Mr Rogers.

43       Of relevance to these matters, Mr Stafford was instructed to recover:

• any information relating to payments made to Mr Budimlich or Mr Rogers from the Respondent’s Oracle data base; and
• any information or documents on the Respondent’s server indicating when Mr Rogers or Mr Budimlich took annual leave.

44       In furtherance of his instructions, Mr Stafford produced a written report dated 7 August 2014.  With the assistance of that report, Ms Miller searched for documents relating to the taking of annual leave by Mr Budimlich and Mr Rogers.  In that regard, Ms Miller found emails sent to Mr Rogers between January 2008 and September 2012, emails sent by current employees of the Respondent in which Mr Rogers’ or Mr Budimlich’s names appeared, and Minutes of sales meetings in which the names of Mr Budimlich or Mr Rogers appeared.  Ms Miller also caused a search to be made of the computerised client log record to ascertain any record of annual leave taken by Mr Budimlich or Mr Rogers.

45       It suffices to say that the searches produced evidence of email correspondence and forms of other communication in which Mr Rogers, in corresponding with clients, indicated the taking of annual leave.  Evidence was also produced showing that Mr Rogers and Mr Budimlich had, at various times, taken time off work in order to travel overseas.

Ms Nancy Burgess

46       The only other person called to give viva voce evidence was Ms Nancy Burgess.  Ms Burgess is the Respondent’s Payroll Manager.  She has held that position since 1995.  In Ms Burgess’ statement, dated 15 November 2013 and produced to this Court, she stated that during her employment with the Respondent, all sales representatives employed by the Respondent were paid on a commission only basis.  Their pay was contingent upon results achieved.  In addition, and in accordance with statutory requirements, sales representatives were paid long service leave and superannuation.

47       Ms Burgess’ evidence is that in the last 12 months of his employment, Mr Rogers earned $30,370.81 (gross), which equated to a weekly average earning figure of $584.05 (gross).  Other than superannuation and long service leave, Mr Rogers did not receive additional payments during that period.  It was Ms Burgess’ evidence also that Mr Rogers’ long service leave payment of $2,520.00, received on termination representing a gross weekly income of $726.00, was incorrectly calculated because that figure included a commission payment that fell just outside of the 12 month period prior to Mr Rogers’ termination.

48       Ms Burgess testified that in the 12 month period prior to his employment ceasing, Mr Budimlich earned $154,498.25 (gross), equating to a gross weekly income of $2,971.12.  Mr Budimlich did not receive any other payment for that year excepting superannuation and long service leave.

49       In a Supplementary Statement made by Ms Burgess on 11 March 2014, she said that it had been her understanding that the Respondent was unable to access any commission summary statements prior to 1999 because of commission software changes that occurred in 1996 and then again in 1999.  However, with the assistance of expert investigators, Mr Rogers’ commission summary statements for the period from 14 June 1996 to 21 September 1999 were retrieved.  Those documents were discovered to Mr Rogers and produced to the Court.

50       Two of the documents disclosed to Mr Rogers on 20 November 2013 were:

a)      a payslip for the period ending 29 March 1996 (Exhibit 12); and

b)     a commission summary statement dated 27 March 1996 (Exhibit 13).

51       Although Ms Burgess did not create those records, she concedes that the documents appear to reflect the payment of annual leave to Mr Rogers between September 1994 and March 1996.

52       By analysing those documents, Ms Burgess has extrapolated that, with one exception, the annual leave payments made to Mr Rogers between 19 September 1994 and 30 November 1997 were equivalent to 1/13th of the total commission paid for the quarter.  Put another way, the payments were equivalent to one week of the total commission earned during the quarter.

53       Finally, Ms Burgess addressed the issue of the introduction of new consultant agreements in March 1996.  The new agreements produced were in the form of that signed by Mr Budimlich in May 1997 (Exhibit 15).

54       Although the Respondent does not have a record of Mr Rogers having entered into a new written consultant’s agreement in 1996, the changes introduced in the new consultant agreements were nevertheless applied to him from that time.  The commission structure in the 1993 written agreement (Rogers Agreement) was replaced.

55       In the 1993 Rogers Agreement, commission was payable based on the number of homes sold, which became conditional during each quarter.  However, in 1996, commission became payable on the number of homes sold, which became unconditional during each month.

56       When cross-examined, Ms Burgess conceded that the Respondent did not keep any records relating to Mr Rogers or Mr Budimlich, or any other sales consultants taking annual leave.

Other Evidence

57       The Witness Statements of Mr Daniel Calcei (dated 8 August 2014), Mr Michael Cassidy (dated 7 August 2014), Mr Adam Stafford (dated 8 August 2014), and Mr Michael Vermaes (dated 8 August 2014) were, by consent, admitted into evidence (Exhibit 27).

Statement of Mr Daniel Calcei

58       Mr Calcei, a Senior Analyst with BDO, described his role in examining the Lenovo Thinkpad Laptop computer which had been supplied to and used by Mr Rogers.  He used an analysis computer and forensic software to make an exact copy of all of the data which was stored on the hard-drive of the laptop computer used by Mr Rogers. 

Statement of Mr Michael Cassidy

59       Mr Cassidy is the Associate Director for BDO and oversees the Forensic Service Team.  He received the subject laptop computer from Ms Miller and asked Mr Calcei to process and acquire forensic images from it.

Statement of Mr Adam Stafford

60       Mr Stafford is the Manager, Forensic Services at BDO.  He assists clients with the extraction, identification and analysis of information from computers, mobile phones and other electronic devices.

61       On 15 May 2014, Mr Stafford was instructed by Ms Miller to undertake an examination of the forensic images of the Respondent’s data systems and of the laptop computer which had been assigned to and used by Mr Rogers.  He was instructed inter alia, to search for any data relating to payments made to Mr Rogers or Mr Budimlich by the Respondent, and to allow a search of data systems to be undertaken to locate any documents relating to the taking of annual leave by Mr Rogers or Mr Budimlich.

62       On the completion of his examination, Mr Stafford prepared a report which detailed the work undertaken and his observations of the data examined.  The report was dated 7 August 2014 and is before this Court, forming part of Exhibit 27.

Statement of Mr Michael Vermaes

63       Mr Vermaes is employed by Realcognita.com Pty Ltd (Realcognita) as a Systems Administrator.  Realcognita designs, builds and maintains the Respondent’s information technology infrastructure.  Realcognita has been providing that service for the Respondent since 2006.  Mr Vermaes’ evidence is that Mr Rogers’ and Mr Budimlich’s email accounts were deleted approximately two months after they respectively ceased working for the Respondent.  Consequently, the only emails relevant to Mr Rogers and/or Mr Budimlich which remain on the Respondent’s server are those which were sent or received from current employees of the Respondent.  The only other email records available are those found on the hard-drive of the laptop computer which had been supplied to and used by Mr Rogers.   Copies of all data (including emails) contained on the Respondent’s files and database servers were provided to BDO.

Issues

64       Mr Rogers and Mr Budimlich bear the onus of proving, on the balance of probabilities, that:

1. in each instance they were entitled to the payment of annual leave;
2. annual leave was not taken during their employment; and
3. no payment of annual leave entitlements were received either during their employment or upon cessation thereof.

Determination

65       Industrial laws constantly evolve to meet the changing political and economic environment.  What may be considered the appropriate standard today, may not have been the appropriate standards applicable five, ten or 20 years ago.

66       Indeed, the evolving nature of industrial laws is well demonstrated in these matters before me.  The relevant industrial legislation moved from State legislation, in the form of the MCE Act in Period 1, to Commonwealth legislation, in the form of the WR Act in Period 2 and the FW Act in Period 3.

67       The various pieces of legislation reflect that there has been a change in how employees who are paid wholly by commission are treated.  While it was the case that they were not treated as employees for the purposes of the MCE Act, they now, in some instances are treated as employees for the purpose of the application of the National Employment Standards (NES).

68       To some extent, both now and in the past, the fact that one is remunerated by commission imports differing standards and working conditions. Such is self-evident in the MCE Act, the WR Act, and the FW Act and in some Modern Awards such as the Vehicle Manufacturing, Repair, Services and Retail Award 2010 (MA000089) and the Real Estate Industry Award 2010 (MA000106) (Real Estate Award).

69       Mr Rogers and Mr Budimlich were remunerated by commission and consequently the Respondent treated them differently to other employees who were not remunerated in the same way.  They were not required to work any particular spread of hours.  They could come and go from the Respondent’s office as they pleased.  Subject to them attending some sales meetings, they were not controlled as to how and when they did their work.  Mr Rogers’ and Mr Budimlich’s remuneration was, without doubt, results driven.  If they did not sell any product they could not be remunerated.  They were not paid a retainer or any other form of base payment, and they could have conceivably worked for extended periods without pay.

70       Despite Clause 19.1 of the Rogers Agreement and Clause 6.2 of the Budimlich Agreement, the Respondent does not deny the existence of an employment relationship and it is clear that nothing contained in those clauses could change what was fundamentally an employment relationship.

71       Prior to the introduction of the NES in the FW Act, there was no singular set of minimum standards applying.  Indeed, standards such as the provision of annual leave were very much dependent upon the particular contract of employment and the applicable industrial legislation and/or instruments in force.

72       Mr Budimlich’s contract of employment did not contain any provision for the taking of annual leave and Clause 6.2 of the Budimlich Agreement reflects that he was not to be considered an “employee” for the purpose of the applicability of certain minimum standards of his employment.

73       Mr Rogers’ situation was somewhat different.  Although his contract of employment did not contain any provision for the taking of annual leave, the Rogers Agreement did nevertheless, provide for the payment of a holiday pay allowance (Clause 6.5).  Indeed, Mr Rogers was paid a holiday pay allowance until 1996, when a different contractual regime was applied to him.  Exhibit 13 establishes that Mr Rogers was paid an annual leave allowance on a quarterly basis, at least for the period September 1994 until March 1996.  The quantum of holiday pay allowance received each quarter was dependent upon commissions earned.  For example, the amounts received in that regard fluctuated from $102.35 for the quarter March to May 1995, to $2,726.24 for the quarter September to November 1995.  It is also self-evident that, with one exception which is unexplained, each of the other quarterly payments made represented 1/13th of the commissions earned for the quarter.  The quarterly pay represented one weeks’ pay.  Consequently, Mr Rogers received four weeks’ holiday pay over a year.  How much he received was completely aligned to, and dependent upon, commissions earned.  It will be obvious that if Mr Rogers had not achieved sales and earned commissions, he would not have been paid a holiday pay allowance.  The payment was entirely results driven.

74       Given that the Rogers Agreement and the Budimlich Agreement did not otherwise provide for the taking of annual leave and/or payment for untaken annual leave upon cessation of employment, it will be necessary to examine the relevant industrial legislation which governed Mr Rogers’ and Mr Budimlich’s employment to determine whether their claims are supported.

75       It will be appropriate to consider each period separately.

Period 1 - MCE Act

76       The MCE Act expressly excludes from its coverage persons who are paid on a results basis.

77       The meaning of “employee” is found in section 3(1) of the MCE Act, which provides:

  “3. Terms used

(1) ….

  employee means a person who is an employee within the meaning of the IR Act, but does not include a person who belongs to a class of persons prescribed by the regulations as persons not to be treated as employees for the purposes of this Act;

…”

78       Regulation 3 of the Minimum Conditions of Employment Regulations 1993 (MCE Regulations) states:

  “3. Persons who are not employees for purposes of Act

 The classes of persons set out in Schedule 1 are prescribed as persons who are not to be treated as employees for the purposes of the Act.”

79       Schedule 1 of the MCE Regulations contains the following:

Schedule 1

[reg. 3]

Persons who are not employees for the purposes of the Act

1. Persons paid wholly by commission

Persons whose services are remunerated wholly by commission or percentage reward.

  …”

80       For Mr Rogers and Mr Budimlich to succeed in their claims with respect to Period 1, they must prove, on the balance of probabilities, that they were not remunerated wholly by commission or percentage reward.

81       Mr Rogers and Mr Budimlich assert that they received a range of payments other than commission.  These included superannuation payments, long service leave payments, and a number of different incentive-based payments, all of which were not commission based.

82       It is convenient at this point to deal with the issue of the payment of statutory based entitlements such as superannuation and long service leave.  In that regard, there is established authority that the payment of statutory based entitlements, including superannuation and long service leave, are not relevant to determining whether a person is paid by commission or percentage reward for the purposes of the MCE Act.

83       In Gregory Oats v Sanders Executive Pty Ltd (1999) 79 WAIG 3543 (Oats), the majority of the Full Bench of the Western Australian Industrial Relations Commission (WAIRC) determined that superannuation and long service leave payments did not alter the claimant’s position as a person remunerated wholly by commission.  Such was confirmed by the Full Bench of the WAIRC in David John Hignett v Joburne Pty Ltd (2000 WAIRC 01598) at 13 (Hignett).

84       Clearly, the payment of long service leave and superannuation does not affect consideration of whether persons are remunerated wholly by commission or percentage reward.

85       The Rogers Agreement and the Budimlich Agreement provide for remuneration that is results based.  Their contracts provided for remuneration in the form of commission in accordance with the Commission Schedules in their respective Agreements.

86       Mr Rogers says that his remuneration was primarily, but not wholly, commission based.  Apart from the payment of statutory based entitlements, he also received lump sum bonuses, overseas trips, and other benefits such as salary continuance insurance.

87       The salary continuance insurance which was taken out by the Respondent for Mr Rogers’ benefit in the early part of his employment did not constitute remuneration.  There was no payment made to Mr Rogers in that regard.  It was insurance cover provided by his employer.  It constituted a benefit falling outside remuneration.  Not all benefits received in employment are remunerative in nature.

88       It is obvious that all payments received by Mr Rogers in addition to commissions, which were lump sum bonuses, overseas trips and the payment of a holiday pay allowance, were all incentive-based payments.

89       The same can be said for Mr Budimlich, who in addition to commissions, received incentive-based payments in the form of lump sum bonuses, quarterly prizes, small payments, gift vouchers, restaurant vouchers, higher commission rates, and target payments.

90       There is established authority that such incentives form part of remuneration by commission or percentage reward, thereby removing the recipients from within the definition of employee for the purposes of the MCE Act.

91       Commission takes many forms and payments on results are not to be construed narrowly.  If they were, the intended exclusion of this class of employee from the MCE Act would not occur, and that would be contrary to the intention of the MCE Act (see Oats (supra) per Fielding SC, at page 3545).

92       In determining whether the bonus payments re-characterised a real estate agent’s status under the MCE Act, the majority of the Full Bench of the WAIRC in Hignett (supra) interpreted the term “commission” broadly.  Senior Commissioner Fielding noted at paragraphs 55, 57 and 58:

“55…  The bonus was not fixed by reference to a percentage of the sales income, as was the case for the regular commission… but a fixed sum which varied depending on the range or level of gross income from sales achieved…”

“57…  Such evidence as there was suggests that the additional payments made to the Appellant by way of bonuses and prizes were as the learned Industrial Magistrate postulated indeed in the nature of additional commission.  They were payments determined by and based on results.  Such evidence as there was suggests that the magnitude of those additional payments varied with the level of income from sales, albeit on the basis of scales of income rather than as a direct percentage of the income.  They were in a very real sense pro rata payments because they varied with the level of income from sales effected on behalf of the Respondent.  Instead of being based on a percentage of the value of the sales they were based on a scale which in turn was regulated by the value of the sales.  They were only “flat payments” to the extent that they were based on a particular scale.”

“58…   I adhere to the view I expressed in Oates v Sanders Executive Pty Ltd (1999) 79 WAIG 3543 at 3545 that a commission can take many forms.  It does not have to be a percentage‑based reward.  Indeed, that is evident from the provisions of the Minimum Conditions of Employment Regulations 1993 which clearly imply that remuneration by commission need not involve remuneration by percentage reward.  As explained in Drielsma v Manifold [1894] 3 Ch 100 the expression “commission” is not a term of art but is “primâ facie the payment made to an agent for agency work, usually according to a scale ‑ it may be an ad valorem scale, but not necessarily an ad valorem scale” (per Davey LJ at 107).  In my assessment that aptly fits the description of the additional payments in question on this occasion.”

93       A similar approach was taken by Chief Commissioner Coleman who in the same decision said, at paragraph 50:

“The characterisation of the sales awards of bonus prize as a “piggy back commission” correctly identifies the nature of the payment. However the fact that this additional level of remuneration was a flat payment and was not calculated on a pro rata basis does not in my view render the circumstance of employment not wholly by commission or percentage reward. The sales award albeit a flat payment was dependent on the level of gross income derived from sales secured by the salesperson.  It was wholly dependent on the attainment of a threshold level of income calculated as percentage reward.  Within the context of the Minimum Conditions of Employment Act and indeed in commerce generally “commission” comprehends the payment on the basis other than percentage reward or pro rata payment.  It is the attainment of a sale which attracts payment be that on a flat fee or percentage of the price. Here there was no entitlement to payment other than by the outcome of sales.  That was clearly the intention of the parties; the nature of the additional flat payment on top of the percentage reward did not alter that nor did it bring the arrangement within the scope of the Minimum Conditions of Employment Act for the calculation of annual leave.”    

94       Bearing in mind what was said in Hignett I find that payments received from the Respondent by Mr Rogers and Mr Budimlich, other than the statutory based entitlements, were incentive-based.  They were achieved on sales results.  Other rewards such as prizes, overseas trips, vouchers, discounts and the like, were all based on incentive results.  These incentives of the kind considered in Hignett were part of a reward scheme, based on Mr Rogers and Mr Budimlich reaching particular sales targets, or were otherwise inextricably linked to commission and were included in their remuneration.

95       I find that Mr Rogers and Mr Budimlich were not “employees” for the purposes of the MCE Act.  It follows that they have, in each instance, failed to establish an entitlement to annual leave for Period 1.

Period 2 - WR Act

96       I preface my consideration of the claims with respect to Period 2 by noting that the forms of remuneration received by Mr Rogers and Mr Budimlich remained relatively constant throughout Periods 1, 2 and 3.  The way that they were remunerated in Period 2 is much the same as they were remunerated in Period 1 and in Period 3.

97       It is against that background that I turn to consider whether they had an entitlement to annual leave during Period 2.

98       Division 4 of Part 7 of the WR Act governs annual leave entitlements.  Within sub-division A of Part 7 of the WR Act, section 227 provides that Division 4 of the WR Act applies to all employees other than casual employees.  Subdivision B of Part 7 of the WR Act guarantees the provision of annual leave and, subject to conditions, permits the cashing out of annual leave entitlements.

99       Subdivision C of Part 7 of the WR Act creates the rules about the accrual, crediting, accumulation, payment and the taking of annual leave.  Section 235, within subdivision C, provides:

“235  Annual leave—payment rules

  (1) If an employee takes annual leave during a period, the employee must be paid a rate for each hour (pro‑rated for part hours) of annual leave taken that is no less than the rate that, immediately before the period begins, is the employee’s basic periodic rate of pay (expressed as an hourly rate).

  (2) If the employment of an employee who has not taken an amount of accrued annual leave ends at a particular time, the employee must be paid a rate for each hour (pro‑rated for part hours) of the employee’s untaken accrued annual leave that is no less than the rate that, immediately before that time, is the employee’s basic periodic rate of pay (expressed as an hourly rate).”

100    The Respondent argues that, by virtue of section 235(2) and section 178 of the WR Act, an entitlement to annual leave does not include incentive-based payments and the remuneration by commission of Mr Rogers and Mr Budimlich is excluded from calculation, thereby resulting in no annual leave entitlement.

101    Payment of annual leave can only be made based on the employee’s basic periodic rate of pay (see section 235(1) of the WR Act).

102    Basic periodic rate of pay is defined in section 178 of the WR Act as follows:

“basic periodic rate of pay means a rate of pay for a period worked (however the rate is described) that does not include incentive‑based payments and bonuses, loadings, monetary allowances, penalty rates or any other similar separately identifiable entitlements. The meaning of basic periodic rate of pay is also affected by section 210.”

103    I note that section 210 of the WR Act is not material to the matters before me.

104    In view of the meaning given to basic periodic rate of pay and the fact that Mr Rogers and Mr Budimlich received incentive-based payments and bonuses, their remuneration did not fall within the definition of basic periodic rate of pay.  They are therefore excluded from the payment of annual leave.

105    In ACE Insurance Limited v Trifunovski (No 2) [2012] FCA 793 (ACE Insurance), Perram J concluded at paragraphs 52 to 58 that, pursuant to sections 235 and 178 of the WR Act, an insurance sales representative paid on a commission only basis had no entitlement to payment for annual leave under the WR Act.  Perram J said that incentive-based payments were excluded from the definition, and that the employee had no entitlement to the payment of annual leave.

106    Mr Rogers and Mr Budimlich invite me not to follow what was said in ACE Insurance (supra) on the basis that the observations are obiter and are, in any event, wrong.

107    In my view, the conclusion reached is not obiter.  Perram J, in  ACE Insurance (supra) said at paragraphs 57 and 58:

“57 …  In my opinion the commission payments received by Mr Perez were, as Combine submitted, ‘incentive-based payments’ and hence excluded from this definition.  …”

  “58 It follows that Mr Perez has no entitlement for this period.  …”

108    His Honour specifically considered and determined the issue of the meaning and effect of the term basic periodic rate of pay.

109    I am bound by the decision of Perram J and intend to follow it.  Consequently, I find that Mr Rogers and Mr Budimlich had no entitlement to payment for annual leave during Period 2.

Period 3 - FW Act

110    The entitlement to annual leave is provided for in Part 2-2, Division 6 of the FW Act.  The provisions came into force on 1 July 2009.  Section 86 of the FW Act provides that Division 6 applies to all employees other than casual employees.  Section 87(1) of the FW Act states that for each year of service, an employee is entitled to four weeks of paid annual leave.  In some circumstances, not relevant to these claims, five weeks of annual leave are provided.

111    Section 87(2) of the FW Act provides that annual leave accrues progressively during a year of service and from year to year.  Sections 88 and 89 of the FW Act stipulate how and when annual leave may be taken.

112    Section 90 of the FW Act provides:

 “90  Payment for annual leave

(1)     If, in accordance with this Division, an employee takes a period of paid annual leave, the employer must pay the employee at the employee’s base rate of pay for the employee’s ordinary hours of work in the period.

 (2) If, when the employment of an employee ends, the employee has a period of untaken paid annual leave, the employer must pay the employee the amount that would have been payable to the employee had the employee taken that period of leave.”

113    The term base rate of pay is defined in Division 4, within section 16(1) of the FW Act, to mean:

  “16  Meaning of base rate of pay

 General meaning

(1)          The base rate of pay of a national system employee is the rate of pay

   payable to the employee for his or her ordinary hours of work, but

  not including any of the following:

   (a) incentive‑based payments and bonuses;

   (b) loadings;

   (c) monetary allowances;

   (d) overtime or penalty rates;

   (e) any other separately identifiable amounts.

  …”

114    Mr Rogers and Mr Budimlich were award/agreement free national system employees and there was no agreement as to their “ordinary hours of work”.  As full-time employees, section 20(2)(a) of the FW Act operated to prescribe their ordinary hours of work  to be 38.   Despite the fact that their ordinary hours of work are determinable they are nevertheless in difficulty in establishing their respective claims with respect to Period 3.

115    I observe that section 86 within Division 6, Part 2-2 of the FW Act applies to all employees other than casual employees.  However, when section 90(1) of the FW Act is considered in context of the definition of base rate of pay in section 16(1), it is apparent that employees remunerated by incentive-based payments are excluded from the entitlement.  That is because their base rate of pay is incapable of determination. Incentive-based payments and bonuses cannot be used to calculate a rate for the purposes of annual leave entitlements. 

116    That approach is in keeping with how employees remunerated only by commission have been treated in the past. The fact that they have been and continue to be treated differently is unsurprising.  The way they are remunerated is entirely different to how most employees are paid.  Such incongruity creates a barrier to the application of certain benefits such as annual leave.

117    Having said that, I observe that their exclusion from such benefits can be overridden.  Some employees who are paid only by commission and/or other incentives and who are covered by Modern Awards, such as the Real Estate Award are entitled to annual leave payments notwithstanding their mode of remuneration.  That is because the Real Estate Award makes provision that they be treated as “pieceworkers” for the purposes of acquiring and taking annual leave.  There is provision in the FW Act and the Fair Work Regulations 2009 for pieceworkers to be paid annual leave.  If it were not for the specific provisions in the Real Estate Award, employees remunerated by commission and or other incentive-based payment would not have had an entitlement to paid annual leave.

118    Given that Mr Rogers and Mr Budimlich were award free, their position in Period 3 was no different to their position in Period 2.  A base rate of pay was incapable of calculation, and as a result, annual leave payments could not be made and were unavailable to them.  The same reasoning that was advanced in ACE Insurance (supra) applies to Mr Rogers and Mr Budimlich with respect to Period 3.

119    I find that upon cessation of employment, the Respondent had no liability to Mr Rogers and Mr Budimlich with respect to alleged untaken annual leave entitlements.  Annual leave entitlements had not accrued and were not payable in any event.

120    Given what I have said, it follows that the claims cannot succeed. 

121    For the sake of completeness, I will nevertheless address the other issues raised at the Trial.

Was Annual Leave Taken?

122    It is common ground that Mr Rogers and Mr Budimlich at various times, including the Christmas period, took time off work.  Breaks were taken to travel overseas and for other reasons. 

123    The Respondent’s operations closed for about two weeks at Christmas each year. It is common ground that Mr Rogers and Mr Budimlich were not required to attend the Respondent’s office or display homes during such periods.   The Respondent says that Mr Rogers and Mr Budimlich treated that time away from the office as annual leave.  Mr Rogers and Mr Budimlich on the other hand, say that despite the closure of the office and display centres they continued to work from their homes.

124    Ms Miller produced copies of a number of emails passing between Mr Rogers and his clients, in which Mr Rogers refers to himself being on annual leave during the Christmas closure.  Indeed, part of Exhibit 26 and in particular documents marked TM21, TM22 and TM23, demonstrate that Mr Rogers was unavailable during such closures.

125    So far as Mr Budimlich is concerned, he testified that on most but not all Christmas breaks, he made himself available and had the office phone diverted to his mobile phone so that he could answer any queries that might arise. 

126    Given the lack of employment records pertaining to the taking of leave, it is impossible to determine exactly how much leave Mr Rogers and Mr Budimlich took, and when it was that such leave was taken.  The fact that no employment records were kept is unsurprising, given that Mr Rogers and Mr Budimlich were treated differently to  wages or salaried employees. As Mr Ryan observed, they could come and go as they pleased and their leave and other working arrangements were neither monitored nor controlled. In reality, they were treated in much the same way that independent contractors would be treated.

127    The question which remains however, is whether the leave taken by Mr Rogers and Mr Budimlich can be characterised as “annual leave”?

128    “Annual leave” is an entitlement enacted by statute enabling an employee to take paid time off work for rest and recreation.  The mechanics of how much time is allowed, when leave can be taken, and how much is payable whilst on leave is governed by statute. 

129    An employee is remunerated for work performed.  If work is not performed an entitlement to remuneration does not exist.  However in some instances an employee may be paid his or her wages despite not having worked. Statutory provisions facilitate, subject to conditions, the payment of entitlements such as sick leave, annual leave; parental leave and so on and that is the case notwithstanding that work has not been performed.

130    The Respondent says that all leave taken by Mr Rogers and Mr Budimlich was in the form of paid annual leave.  Mr Rogers and Mr Budimlich say that any leave taken, other than approved long service leave, was leave without pay.

131    As previously indicated, the Respondent asserts that Mr Rogers and Mr Budimlich took paid annual leave.  It points out that whilst on leave their remuneration continued, albeit that their pay was calculated on results. The pay they received whilst on leave was by way of commission which had previously been earned.  The Respondent says that because Mr Rogers and Mr Budimlich were paid whilst on annual leave they should not be paid out in lieu on termination.

132    I reject that argument.  The fact that Mr Rogers and Mr Budimlich may have been paid commissions and/or incentive-based payments whilst on leave did not turn that leave into paid annual leave.

133    Despite the fact that Mr Rogers and Mr Budimlich may have characterised any leave taken during Christmas closure periods as annual leave it did not mean they took annual leave.  The attribution of a label does not change the fundamental character of something.  One cannot turn into paid annual leave something which is intrinsically not of that character.  Payments received by them whilst on leave had nothing to do with them being on leave.  Any payments made by the Respondent at such times were not for the purpose of annual leave entitlements but rather to satisfy the Respondent’s liability with respect to commissions already earned. Payments received at those times were wholly unconnected with any leave taken and were not made in contemplation of, or for the purposes of, annual leave. Such payments would have been received in any event, irrespective of whether Mr Rogers and Mr Budimlich were on leave. 

134    The leave variously taken by Mr Rogers and Mr Budimlich was nothing more than leave taken by agreement, consent or custom for which they were not otherwise remunerated.  Any leave taken at such times and most others was in the form of unpaid leave.

Limitation

135    The Respondent submits that for Period 1 and Period 2, to the extent that annual leave was taken but not paid prior to 26 March 2007, Mr Rogers or Mr Budimlich cannot now seek to recover the amounts allegedly underpaid.  That is because of the time limitation provisions contained in subsection 83A(2) of the IR Act and subsections 719(6) and (9) and section 720 of the WR Act.  The Respondent submits that any entitlement to payment arose at the time leave was taken and not at termination. The time for bringing a claim started each time there was a failure to make payment for annual leave taken.

136    The Respondent’s argument is contingent upon my finding that annual leave was taken by Mr Rogers and Mr Budimlich.  Given that I have found that any leave taken was not in the form of annual leave, it follows that the limitation argument raised by the Respondent cannot succeed.

137    If Mr Rogers and Mr Budimlich had been entitled to annual leave under the MCE Act, the WR Act and the FW Act, then given the statutory framework to which I have earlier referred, their entitlement under the MCE Act and the WR Act would have crystallised and been payable upon the termination of employment pursuant to section 90(2) of the FW Act.  That was when the cause of action accrued.  The obligation to pay at termination commenced the six year limitation period.  Consequently, the claims are within time. 

Accrual Defence

138    The Respondent submits that any periods of unpaid leave do not count as service for the purposes of the accrual of annual leave.

139    The argument needs to be considered in the context of the prevailing statutory provisions at the times that the unpaid leave was taken.

MCE Act

140    Section 23 of the MCE Act provides:

  “23. Paid annual leave, entitlement to

(1)          An employee, other than a casual employee, is entitled for each year of service, to paid annual leave for the number of hours the employee is required ordinarily to work in a 4 week period during that year, up to 152 hours.

(2)                                                                           …

   (2a) …

In subsection (1), year does not include any period of unpaid leave.  …”

141    Each period of unpaid leave taken by Mr Rogers and Mr Budimlich during the period of the MCE Act does not constitute service under section 23 for the purposes of calculating their entitlement to paid annual leave.

WR Act

142    Subdivision B of Division 4 (Annual Leave), section 232(2) of the WR Act provides that:

“(2)  An employee is entitled to accrue an amount of paid annual leave, for each completed 4 week period of continuous service with an employer, of 1/13 of the number of nominal hours worked by the employee for the employer during that 4 week period.”

143    Under this section, there is provision for the calculation of an employee’s annual leave entitlement, which accrues in respect of the nominal hours, and which forms the basis for the annual leave entitlement guarantee.

144    Section 229(4A) of the WR Act provides that, in calculating “nominal hours worked”, periods of unpaid leave do not count as service. 

145    Section 229(4A) states:

“(4A)  For the purposes of subparagraphs (1)(b)(i) and (4)(a)(ii), a period of authorised unpaid leave or unauthorised leave does not count as service in relation to an employee except:

(a)   as expressly provided by:

(i)                 a term or condition of the employee’s employment; or

(ii)               a law, or an instrument in force under a law, of the Commonwealth, a State or a Territory; or

(b) as prescribed by the regulations.”

146    None of the exceptions in section 229(4A)(a) or (b) have application in these matters.

147    The result is that as periods of unpaid leave do not form part of an employee’s nominal hours worked, annual leave does not accrue during periods of unpaid leave.  Such periods must therefore be discounted from Mr Rogers’ and Mr Budimlich’s annual leave accrual calculations.

FW Act

148    Section 87 of the FW Act provides:

 “Amount of leave

(1)   For each year of service with his or her employer, an employee is entitled to:

(a)   4 weeks of paid annual leave; or

…”

149    Section 22 of the FW Act provides:

“(1)  A period of service by a national system employee with his or her national system employer is a period during which the employee is employed by the employer, but does not include any period (an excluded period) that does not count as service because of subsection (2).

 (2)  The following periods do not count as service:

(a)     any period of unauthorised absence;

(b)     any period of unpaid leave or unpaid authorised absence, other than:

(i)  a period of absence under Division 8 of Part 2-2 (which deals with community service leave); or

(ii) a period of stand down under Part 3-5, under an enterprise agreement that applies to the employee, or under the employee’s contract of employment; or

(iii)  a period of leave or absence of a kind prescribed by the regulations;

(c)  any other period of a kind prescribed by the regulations.

…”

150    None of the periods of unpaid leave taken by Mr Rogers or Mr Budimlich fall within any of the exceptions set out in subsections 22(2)(b)(i) or (iii) or (c) of the FW Act.  Accordingly, those periods do not constitute service for the purposes of calculating Mr Rogers’ and Mr Budimlich’s entitlement to annual leave under section 87 of the FW Act.

151    I agree with submissions made that the periods Mr Rogers and Mr Budimlich took off, albeit in the form of unpaid leave or other authorised absence, cannot be taken into account for the purpose of calculating annual leave. 

152    I do not intend to delve into the documentary evidence to determine how much unpaid leave was taken by Mr Rogers and Mr Budimlich.  Neither party has attempted to reconcile how much leave has been taken.  For my purposes, it is sufficient that I rule on the principle rather than embark on quantifying what leave has been taken and how that impacts upon the amounts claimed. If necessary that can be addressed later.

Rate of Pay

153    Mr Rogers and Mr Budimlich have, in quantifying their claims, used a weekly rate based on their respective average earnings for the 12 month period prior to the cessation of their employment.  Given that the Respondent has used the same rate to pay Mr Rogers and Mr Budimlich their long service leave entitlements, it seems to accept that such is appropriate.  Indeed, it is the only feasible method of calculation.

154    If I am wrong in my conclusions that the MCE Act, the WR Act and the FW Act exclude Mr Rogers and Mr Budimlich from annual leave entitlements, then the amounts claimed should be allowed, subject to adjustments being made to account for unpaid leave taken, during which time, service did not accrue.

Result

155    Each claim will be dismissed.

G. CICCHINI

INDUSTRIAL MAGISTRATE