WESTERN AUSTRALIAN INDUSTRIAL MAGISTRATES COURT

CITATION : 2015 WAIRC 00938

DELIVERED : Wednesday, 14 October 2015

FILE NO. : M 183 OF 2014

CLAIMANT

AND

Paul Long

RESPONDENT

Catchwords : Alleged breach of the Transport Workers (General) Award No. 10 of 1961 and the Minimum Conditions of Employment Act 1993 (MCE Act); Consideration of whether there was non-compliance with section 8 of the MCE Act.

Legislation : Industrial Relations Act 1979

  Fair Work Act 2009

  Minimum Conditions of Employment Act 1993

Cases referred to in

these Supplementary

Reasons :  James Turner Roofing Pty Ltd v Christopher Lawrence Peters (2003) 83 WAIG 427

  Maslen v Core Drilling Services Pty Ltd and another

  [2013] FFCA 460

Instruments : Transport Workers (General) Award No. 10 of 1961

Result : Supplementary reasons provided

Representation

Claimant : Mr T. Jardine (counsel) of Jardine & Associates

SUPPLEMENTARY REASONS FOR DECISION

1          On 7 October 2015, I handed down my reasons for decision (reasons) in this matter (see Andrew Forster v Paul Long 2015 WAIRC 00925). When I did so, counsel for the claimant asked that I provide supplementary reasons concerning the matter and in particular with respect to the claimant’s argument concerning s 8 of the Minimum Conditions of Employment Act 1993 (MCE Act). Counsel for the respondent did not object to what was sought.  In view of that I agreed to the request. These are those supplementary reasons.

2          At paragraphs 25 and 26 of my reasons, I said:

“25  Given my findings, the Claimant’s contention that he was caused to forgo annual leave in contravention of section 8 of the Minimum Conditions of Employment Act 1993 is not maintainable.

26  The Claimant did not forgo annual leave. It is open to conclude that he took it and was paid for it.”

3          The finding to which I referred in paragraph 25 of my reasons was that the claimant had failed to prove that the payments he received did not include his annual leave entitlements.

4          Clause 6.1.1 of the Transport Workers (General) Award No. 10 of 1961 (the Award), which at the material time covered the claimant and the respondent, provides:

“6.1.1 Except as hereinafter provided, an employee (other than a casual employee) is entitled for each year of service, to 4 consecutive weeks annual leave with payment of ordinary wages, as prescribed by this Award.  Such entitlement shall accrue pro-rata on a weekly basis”.

5          There is no dispute that the respondent was obliged to pay the claimant his annual leave entitlements in accordance with cl 6.1.1 of the Award. The issue at trial was whether the respondent had done so. The respondent’s position was that the hourly rate paid to the claimant included a component which included his annual leave entitlements, as had been agreed between them.

6         The respondent relies upon what was said by Anderson J in James Turner Roofing Pty Ltd v Christopher Lawrence Peters (2003) 83 WAIG 427 (James Turner Roofing), at page 430, to support his contention that the over-award hourly payment made to the claimant included a component which was specifically attributable to the respondent’s liability with respect to annual leave. The respondent says that he has paid the claimant his annual leave entitlements in accordance with their agreement, and that such over-award hourly payments with respect to annual leave can be set off against the claimant’s claim.

7          In submissions, counsel for the respondent referred to the decision of the Federal Circuit Court of Australia in Maslen v Core Drilling Services Pty Ltd and Another [2013] FFCA 460 (Maslen) to support his contention that not only does such payment have to be specifically agreed to between the parties, but that it can only be set off against an ordinary hourly payment and not an entitlement such as annual leave.

8          In that regard, I observe that such a view is not entirely consistent with what was said in James Turner Roofing. In James Turner Roofing, which binds this court, Anderson J said at paragraph 21, that the whole of an amount paid for work done can be credited against the award entitlement “whether it arises as ordinary time, overtime, weekend penalty rates or any other monetary entitlement under the award” (my emphasis added).  I note that in this claim the claimant seeks a monetary entitlement.

9          Having made those observations I turn to comment about the claimant’s principal argument in this matter, being that the agreement concerning the payment of annual leave entitlements (if made) contravenes s 8 of the MCE Act, thereby rendering such agreement void or  unenforceable.

10       Before considering s 8 of the MCE Act it is necessary to consider how the claimant’s entitlement to annual leave payments arises.

11       Section 5 of the MCE Act provides:

 “5. Minimum conditions implied in awards etc.

  (1) The minimum conditions of employment extend to and bind all employees and employers and are taken to be implied —

  [(a) deleted]

  (aa) in any employer‑employee agreement; or

  (b) in any award; or

 (c) if a contract of employment is not governed by an employer‑employee agreement or an award, in that contract.

 (2)  A provision in, or condition of, an employer‑employee agreement, an award or a contract of employment that is less favourable to the employee than a minimum condition of employment has no effect.

 (3)  A provision in, or condition of, an agreement or arrangement that purports to exclude the operation of this Act has no effect, but without prejudice to other provisions or conditions of the agreement or arrangement.

 (4)  A purported waiver of a right under this Act has no effect.

 (5)  This section has effect subject to sections 8 and 9(1).”

12      The requirement to provide annual leave entitlements (s 23 MCE Act) and the terms in relation to how that is achieved (s 18, s 24 and s 25 MCE Act) is implied in the Award. It is obvious that those provisions have been picked up by the Award and that the respondent was obliged to comply with them. The respondent was unable to contract-out his annual leave obligations and the parties were unable to agree that the claimant forgo his annual leave entitlements.

13       Section 8 of the MCE Act provides:

 “8. Limited contracting‑out of annual leave conditions

  (1) After the completion of any year of service by an employee, the employer and employee may agree that the employee may forgo taking annual leave to which the employee became entitled in relation to that year of service if —

  (a) the amount of annual leave forgone does not exceed 50% of the whole amount of annual leave to which the employee became entitled in relation to that year of service; and

  (b) the employee is given an equivalent benefit in lieu of the amount of annual leave forgone; and

  (c) the agreement is in writing.

  (2) An agreement referred to in subsection (1) is of no effect if the employer’s offer of employment was made on the condition that the employee would be required to enter into the agreement.

   (3) The employer must not —

  (a) require the employee to forgo taking an amount of annual leave; or

  (b) exert undue influence or undue pressure on the employee in relation to the making of a decision by the employee whether or not to forgo taking an amount of annual leave.

   (4) A contravention of subsection (3) is not an offence but that subsection is a civil penalty provision for the purposes of section 83E of the IR Act.”

14       The claimant suggests that if there has been a contracting-out, such arrangement is of no effect. That is because the conditions required by s 8(1)(a) to (c) of the MCE Act have not been met. It is accepted that none of those conditions have been met.

15      As I understand it, the claimant argues that he has been caused to forgo his annual leave entitlements.  I note however that s 8(a) of the MCE Act is not concerned with foregoing annual leave “entitlements” but rather foregoing the “taking” of annual leave to which an employee becomes entitled.

16       The claimant does not suggest that he has foregone the taking of leave. It is self-evident that there was no agreement reached that he would forego the taking of accrued annual leave. Indeed he acknowledges having taken about seven weeks’ leave, including approximately five weeks, to travel to Europe. The leave taken was in the form of annual leave. The only issue between the parties is whether he has been paid his annual leave entitlements for those periods of leave taken and annual leave accrued at termination.

17      It appears that the claimant suggests that s 8 of the MCE Act is concerned with forgoing annual leave entitlements but that is not so. It relates solely to the “taking” of annual leave. In the circumstances, it has no role to play with respect to this claim in which he concedes that he has taken leave. What he claims is that he has not been “paid” his annual leave entitlements due to him. Section 8 of the MCE Act is of no relevance to that issue.

18       Whether he has or has not been paid his annual leave entitlements is a question of fact. In that regard, I have found against him by determining that he has not proven his claim.

G. CICCHINI

INDUSTRIAL MAGISTRATE