WESTERN AUSTRALIAN INDUSTRIAL MAGISTRATES COURT

CITATION : 2016 WAIRC 00291

DELIVERED : WEDNESDAY, 11 MAY 2016

FILE NO. : M 147 OF 2015

CLAIMANT

AND

  the governing council, south metropolitan tafe

RESPONDENT

Catchwords : Alleged failure to pay the claimant’s member pro-rata long service leave required by Western Australian TAFE Lecturers’ General Agreement 2014 and the Teachers (Public Sector Technical and Further Education) Award 1993

Legislation : Industrial Relations Act 1979

Instruments : Western Australian TAFE Lecturers’ General Agreement 2014
Teachers (Public Sector Technical and Further Education) Award 1993

Case(s) referred to
in Reasons  : Miller v Minister of Pensions
    (1947) 2 All ER 372
    City of Wanneroo v Michael Lindsay Holmes
    [1989] FCA 369
    Health Services Union of Western Australia (Union of Workers) v
    The Director General of Health as delegate of the Minister of
    Health in his Incorporated capacity under s. 7 of the Hospitals and
    Health Services Act 1927 (WA)
    [2012] WAIRC 01117
    New South Wales Nurses Association v Ramsay Health Care
    Australia Pty Ltd & Ors
    [2009] FMCA 579
    Trevor Kucks v CSR Limited
    (1996) 66 IR 182
    Australian Medical Association (WA) Incorporated v The Minister
    for Health
    [2016] WAIRC 00134
    Douglas William Bell v Western Australian Fire Brigades Board
    [1996] WAIRComm 219
    Civil Service Association of Western Australia Incorporated on
    behalf of Mr William Thung v Director General Department of
    Education
    [2016] WAIRComm 99

Result : Claim dismissed

Representation:

Claimant : Mr M Amati, agent for the State School Teachers’
 Union of W.A. (Incorporated)

Respondent : Ms D Underwood (counsel) as instructed by the State Solicitor of Western Australia

REASONS FOR DECISION

Overview

1          Mr Ian Stanley Smith (Mr Smith) is a member of the State School Teachers’ Union of W.A. (Incorporated) (the claimant).

2          The claimant asserts that Mr Smith’s employer, the predecessor of the Governing Council, South Metropolitan TAFE (the respondent) in breach of the Western Australian TAFE Lecturers’ General Agreement 2014 (the Agreement) and the Teachers (Public Sector Technical and Further Education) Award 1993 (the Award) failed to pay him his pro-rata long service leave entitlement amounting to $13,977.00. 

3          The claimant seeks a declaration that the respondent has failed to comply with the Award and the Agreement and that as a result, Mr Smith has been denied monies due and owing to him. It also seeks an order that the respondent pays Mr Smith $13,977.00 plus interest thereon and that it be ordered not to further contravene the Agreement and/or the Award.

4          The issue to be determined is whether the Agreement and/or the Award required, given the circumstances in which Mr Smith’s employment ended, payment to him of a lump sum amount with respect to pro-rata long service leave.

Burden of Proof and Standard of Proof

5          The claimant carries the legal burden of proof.

6          The standard of proof required to discharge the burden of proof is the balance of probabilities. This standard was explained by Lord Denning in Miller v Minister of Pensions (1947) 2 All ER 372 at 374 as follows:

That degree is well settled. It must carry a reasonable degree of probability but not so high as is required in a criminal case. If the evidence is such that the tribunal can say ‘we think it more probable than not’ the burden is discharged, but if the probabilities are equal it is not.

7          Accordingly, where in these reasons I say that ‘I am satisfied’ of a fact or matter or otherwise make a finding as to a fact or matter, I am saying ‘I am satisfied on the balance of probabilities’ of that fact or matter. Where I state that ‘I am not satisfied’ of a fact or matter I am saying that ‘I am not satisfied on the balance of probabilities’ of that fact or matter.

Agreed Facts

8                 1.              Mr Smith is a member of the claimant.

 2. The claimant’s member, Mr Smith, was employed by the respondent from 2 May 2011 to 31 July 2015, on a series of continuous and contiguous fixed term employment contracts without a break in service.

 3. From 2 May 2011 to 31 July 2015 Mr Smith was an employee of the respondent.

 4. From 2 May 2011 to 31 July 2015 Mr Smith was employed by the respondent on four fixed term contracts.

 5. Mr Smith’s employment with the respondent was for a period of continuous service of four years and three months; that is less than seven years.

 6. As at 31 July 2015, Mr Smith was over 64 years of age.

 7. The provisions of the Agreement and Award applied to Mr Smith throughout his employment with the respondent.

 8. The respondent employed Mr Smith on a fixed term contract from 2 May 2011 to 4 November 2011 as a full time Lecturer Electrical Trades.

 9. The respondent extended Mr Smith’s contract from 4 November 2011 to 30 December 2011 to provide cover for a one-off period of relief, with the same terms and conditions.

 10. The respondent extended Mr Smith’s contract from 30 December 2011 until 30 March 2012, with the same terms and conditions, whilst a recruitment and selection process to fill the position was undertaken.

 11. Mr Smith’s contract was extended by the respondent from 30 March 2012 until 29 June 2012 as the recruitment and selection process took longer than expected.

 12. Mr Smith was the recommended applicant for the mentioned recruitment and selection process, and as such, the respondent employed Mr Smith on a new fixed term contract from 2 July 2012 until 28 June 2013 as a full time Lecturer Electrical Trades.

 13. The respondent extended Mr Smith’s contract from 28 June 2013 until 31 December 2013, with the same terms and conditions.

 14. From 1 January 2014 until 31 December 2014 Mr Smith was employed by the respondent on a new fixed term contract as a full time Lecturer Electrical Trades resulting from an expression of interest process.

 15. Mr Smith’s contract was extended by the respondent from 31 December 2014 until 3 July 2015 to meet the current work requirements of the agency, with the same terms and conditions.

 16. Mr Smith was employed by the respondent on a new fixed term contract from 6 July 2015 until 31 July 2015 as a full time Lecturer Electrical Trades to provide cover for a one-off period of relief.

 17. The aforementioned employment contract ended on 31 July 2015 and it was the final continuous employment contract between the respondent and Mr Smith.

 18. The respondent advertised a position for Construction and Utilities Lecturing Trades (advertised vacancy number CHL6.15) in April 2015. The position was for a term of 12 months with the possibility of extensions.

 19. Mr Smith submitted an application in relation to the advertised Electrical Trades Lecturer position, vacancy number CHL6.15.

 20. Mr Smith was shortlisted for the Electrical Trades Lecturer position, and on 14 May 2015, was interviewed by the respondent in relation to the position.

 21. On 22 June 2015 Mr Smith was notified by the respondent that he was not the recommended applicant and was unsuccessful in relation to the advertised Electrical Trades Lecturer position, vacancy number CHL6.15. On that date, Mr Smith was also notified that he had been deemed suitable for any similar vacancies that may become available within the next six months.

 22. Mr Smith did not inform or notify the respondent that he was retiring.

 23. The respondent did not inform or notify Mr Smith that he was being retired.

 24. Due to the lack of any further offer of an employment contract, pursuant to cl 49(1)(g) of the Agreement, Mr Smith applied to the respondent for the lump sum equivalent to his pro-rata long service leave.

 25. The application for pro-rata long service leave was refused by the respondent.

 26. The respondent subsequently offered, and Mr Smith accepted, employment as a casual employee to cover the Store-Person/Technician position whilst a recruitment process was being finalised.

 27. Between 11 August 2015 and 28 October 2015 Mr Smith was employed on several occasions by the respondent, as a casual employee, in the positions of a Store-Person/Technician and Lecturer.

 28. An employee employed on a ‘casual basis’ is only entitled to leave as prescribed in cl 19 – Casual of the Agreement and does not include accruing long service leave.

Other Undisputed Facts

9         On 21 July 2015 Mr Smith emailed the respondent’s human resource department, saying:

… If you are not going to offer me my 6 month contract extension then you have to pay me 225.43 hours of accrued annual leave & about 7.9 weeks of Pro Rata Long Service leave.  As per Western Australian T.A.F.E Lecturs(sic) Agreement 2014.

10      On 30 July 2015 Ms Caroline Dixon (Ms Dixon), a Human Resource Consultant employed by the respondent, replied to Mr Smith’s email of 21 July 2015, as follows:

... Pro-rata LSL is only paid out if you are retiring from your position as per clause 49.1(f).

Please can you confirm if you are retiring as payroll will also notify GESB.

11      On 3 August 2015, Mr Smith replied to Ms Dixon’s email of 30 July 2015. He said:

Hi Caroline , I no longer have a job to retire from, so effectively you are retiring me by not offering a new contract. Therefore clause 49.1(g) applies.

12      Later that same day, Ms Dixon replied saying:

… Unfortunately this clause does not apply as we are not retiring you from your position. Your contract is ceasing and Challenger has chosen not to renew it.

Did the Circumstances of the Ending of Mr Smith’s Employment Entitle Him to the Payment of Pro-rata Long Service Leave?

13      Pro-rata long service leave must be paid to Mr Smith if he retired or if he was retired by the respondent.

14      The claimant asserts that, by not offering Mr Smith a further contract of employment, the respondent retired him. The respondent denies that it retired him and says that Mr Smith’s employment ceased pursuant to the expiry of a fixed term contract and therefore is not entitled to pro-rata long service leave.

15      In order to resolve the issues between the parties, it will be necessary to consider the relevant provisions of the Award and the Agreement.

16      Clause 49.1 of the Agreement provides, relevantly:

49.1 Entitlement

(a)      Employees are eligible for 13 weeks of long service leave after seven (7) years of continuous service.

…

(f)     An employee who has elected to retire at or over the age of 55 years and who will complete not less than 12 months continuous service before the date of retirement may make application to the employer to take pro-rata long service leave before the date of retirement, based on continuous service of a lesser period than that prescribed by this clause for a long service entitlement.

(g)    On application to the Managing Director a lump sum payment equivalent of any:

 …

ii. pro rata long service leave based on continuous service of a lesser period than that provided in sub-clause 49.1 (a) shall be made to an employee who retires at or over the age of 55 years, is retired on the grounds of ill health, is retired by the employer for any other reason, or dies. A lump sum payment for pro rata long service leave is also subject to the employee not having completed less than twelve months continuous service.

17      Clause 25 of the Award provides, relevantly:

(1)    Subject to this clause, a permanent employee shall be entitled to long service leave of thirteen weeks on completion of –

(a) ten years’ continuous service; and

(b) any subsequent period of seven years’ continuous service following.

(2)    A temporary employee shall be entitled to long service leave of thirteen weeks on completion –

(a) of ten years’ continuous service within eleven calendar years;

  …

(12)  (a) Long service leave shall be taken over a complete term or a complete semester or complete college year commencing in the year specified by the application from such date as is approved by the employer and any portion of a long service leave entitlement that is not exhausted by virtue of the operation of this subclause shall be credited to the employee; (the credit being a “carry-over entitlement”).

(b) Notwithstanding paragraph (a) of this subclause, the employer may, in special circumstances, direct that the provisions of that subclause do not apply.

(13)  (a) An employee who has a carry-over entitlement (or carry-over entitlements) may take the long service leave entitlement pursuant to paragraph (b) of subclause (1) on a pro-rata basis before the expiry of seven years if the period of any carry-over entitlement (or carry-over entitlements) of the employee, when added to the period of pro-rata long service leave, equals one complete term.

(b) The employer may, in special circumstances, permit an employee to take a carry-over entitlement before the employee’s long service leave entitlement and the pro-rata long service leave equals one complete term.

…

(15)  A lump sum payment for the money equivalent of any long service leave entitlement of an employee under the provisions of this clause and/or any proportional long service leave credit of an employee under the provisions of this clause shall be due -

(a)  as of the date of retirement, to an employee who is retired because of age or incapacity, provided that at least twelve months continuous service has been completed prior to the date of retirement;

(b)  as of the date of retirement, to an employee who retires at or over the age of 55 years provided that at least three years of continuous service has been completed prior to the date of retirement;

…

(16)  A lump sum payment for the money equivalent of any long service leave entitlement of an employee under the provisions of this clause shall be made as soon as practicable after the date of the employee’s resignation or dismissal, to an employee who -
 

(a) resigns; or
 

(b) is dismissed.

(17)  The long service leave credit of an employee for each period of continuous service less than that required to entitle the employee to long service leave shall be that proportion of thirteen weeks as the period bears to the total period of service required.

(18)  For the purposes of subclauses (15), (16) and (17) of this clause any long service leave entitlement of an employee shall include any carry-over entitlement but shall not include any pro-rata long service leave.

(19)  Except as provided in subclauses (15) to (18) inclusive, an employee shall not be entitled to a lump sum payment in respect of any period of continuous service prescribed in paragraphs (a) or (b) of subclause (1) but shall be entitled to a lump sum payment in relation to any carry-over entitlement that remains to be taken.

…

Construction of the Award and the Agreement

18      Awards and industrial agreements are not legislative instruments. Although they are given legislative effect by the Industrial Relations Act 1979 they are not regarded as having been drafted by persons skilled in drafting legislation.

19      When constructing an industrial instrument, the matter must be viewed broadly, and consideration and weight given to every part of the award and or agreement to endeavour to give it a meaning consistent with the general intention of the parties, to be gathered from the whole industrial instrument (see City of Wanneroo v Michael Lindsay Holmes [1989] FCA 369; Health Services Union of Western Australia (Union of Workers) v The Director General of Health as delegate of the Minister of Health in his Incorporated capacity under s. 7 of the Hospitals and Health Services Act 1927 (WA) [2012] WAIRC 01117).

20      The task of construction of industrial instruments is to be approached in a way that allows for a generous construction.  They should be interpreted beneficially and not subjected to an overly literal construction (see New South Wales Nurses Association v Ramsay Health Care Australia Pty Ltd & Ors [2009] FMCA 579). Part of the context of construction of an industrial instrument is how it is made.

21      Although a too literal adherence to the strict technical meaning of words should be avoided, the court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into an award or industrial agreement (see Trevor Kucks v CSR Limited (1996) 66 IR 182).

22      In this matter the parties agree that the Agreement prevails to the extent of any inconsistency with the Award.

23      Clause 25 is the Award provision which deals with long service leave. I observe that pursuant to cl 25(1)(a) of the Award, an employee has a long service leave entitlement on the completion of 10 years of continuous service. An employee with a long service leave entitlement is to be paid a money  equivalent lump sum as soon as practicable after the employee resigns or is dismissed (cl 25(16) of the Award).  However in order for cl 25(16) of the Award to be enlivened a person must have a long service leave entitlement. Clauses 25(15) – (17) of the Award are not enlivened if the employee does not have a long service leave entitlement.

24      Clause 25(18) of the Award is clear in that the long service leave entitlement of an employee does not include any pro-rata long service leave. Clause 25(12) of the Award defines a carry-over entitlement as meaning any portion of a long service leave entitlement that is not exhausted (i.e. unused). Such portion must be credited to an employee and is payable to an employee upon resignation or dismissal. However, a carry-over entitlement does not include any pro-rata long service leave (cl 25(18) of the Award).  Accordingly, cl 25(19) does not have application where a long service leave entitlement has not accrued and payment sought is with respect to pro-rata long service leave.

25      It is apparent that because Mr Smith had not completed 10 years continuous service with the respondent he had not accrued a long service leave entitlement (Agreed Facts [2] and [5]) and therefore the aforementioned clauses do not assist his argument. It is the case that he did not have a ‘carry-over entitlement’ because such an entitlement is predicated on the achievement of the long service leave entitlement in the first place.  It follows that the Award provisions cannot be the source of entitlement claimed by Mr Smith.

26      Any possible entitlement to the payment of pro-rata long service leave can only possibly arise from cl 49.1(g)(ii) of the Agreement.  Pursuant to cl 49.1(g)(ii) of the Agreement, a pro-rata long service leave payment must be made to Mr Smith if he:

1. retires at over the age of 55 years;
2. is retired on the grounds of ill health;
3. is retired by the employer for any other reason; or
4. dies.

27       The claimant asserts that Mr Smith was retired by the respondent and that he is therefore entitled to the payment of pro-rata long service leave. The other criteria referred to above are not relevant for the purpose of this claim.

28       Mr Smith accepted employment for fixed terms pursuant to four fixed term contracts. His final fixed term contract was for employment from 6 July 2015 to 31 July 2015. Consequently his employment with the respondent ended on 31 July 2015 as expressly provided in the final contract.  His contract of employment came to an end consensually according to its terms (see Australian Medical Association (WA) Incorporated v The Minister for Health [2016] WAIRC 00134 [105] (AMA)). It is clear that the employment relationship terminated because the contact of employment ended (see AMA [127]). 

29       I find that the end of Mr Smith’s employment occurred without it being a dismissal or resignation. Where an employer allows a fixed term contract to expire and does not offer a further contract, as was the case in this instance, the employee is not retired or dismissed by the employer. The employment comes to end according to the terms of the contract of employment, without it constituting a dismissal, resignation, or retirement.

30       In any event, to be retired by an employer requires a unilateral initiative on the part of the employer (see Douglas William Bell v Western Australian Fire Brigades Board [1996] WAIRComm 219 (Bell); Civil Service Association of Western Australia Incorporated on behalf of Mr William Thung v Director General Department of Education [2016] WAIRComm 99).  In the present case there was no initiative or action taken by the respondent to retire Mr Smith. The respondent did not notify Mr Smith that he was being retired. His employment ceased in accordance with the terms of his contract of employment.

31       The claimant asserts that the respondent’s ‘omission’ in not granting Mr Smith a further contract of employment constituted Mr Smith being retired by the respondent. It asserts, in effect, that Mr Smith was constructively ‘retired’.

32       The Shorter Oxford English Dictionary defines ‘omission’ to mean …the non-performance or neglect of action or duty. I observe that the respondent was not under any obligation or duty to offer Mr Smith another contract of employment immediately upon the cessation of Mr Smith’s final contract. It was not required to perform any act with respect to which neglect could arise, nor was it under any duty to do anything else with respect to Mr Smith’s future employment. The failure to offer Mr Smith another contract of employment cannot constitute constructive retirement at the initiative of the respondent.

33       The term ‘retire’ is not defined in the Award or the Agreement. It is defined in the Macquarie Dictionary (6th Edition) as to withdraw from office, business or active life.  In the Shorter Oxford English Dictionary ‘retire’ is defined to mean to withdraw from office, or an official position, to give up one’s business or occupation in order to enjoy more leisure or freedom. Retired is defined in the Oxford Dictionary as a person ‘that has left office, employment, or service permanently … that has stopped working.

34       In Bell it was said that ‘retire’ has the connotation of leaving an office or position with some intention not to continue to work or engage in work full time.

35       In my view what was said in Bell encapsulates the modern view of what is meant to be retired, that is, the employee withdraws from regular, ongoing employment. The respondent’s conduct did not cause Mr Smith to withdraw from regular ongoing employment. He was not precluded from engaging in future regular ongoing employment with the respondent or others.

Conclusion

36       The ordinary meaning of the words in cl 49.1(g) of the Agreement and cl 25 of the Award, when read in the context of the Agreement or Award as the case requires, is unambiguous in each instance.  Neither the Agreement nor Award provides any foundation for the claim.

37       I find that Mr Smith’s employment with the respondent ceased as a result of the expiry of the final contract.  In that regard I conclude that clause 49(1)(g)(ii) of the Agreement is not enlivened because when Mr Smith’s employment ended he did not retire nor was he retired by the respondent.

38       Further for the reasons previously stated I find that clause 25 of the Award cannot be the source of the entitlement of pro-rata long service leave claimed.

39       I am satisfied that Mr Smith is not entitled to a payment for pro-rata long service leave.  The claimant has failed to prove its claim.

G. CICCHINI

INDUSTRIAL MAGISTRATE