WESTERN AUSTRALIAN INDUSTRIAL MAGISTRATES COURT

CITATION : 2017 WAIRC 00782

DELIVERED : WEDNESDAY, 6 SEPTEMBER 2017

FILE NO. : M 13 OF 2017

CLAIMANT

AND

Tyson Holdings Pty Ltd trading as IMPACT PUBLICATIONS

Respondent

CatchWords : Alleged breach of the Clerks Private Award 2010 [MA000002] – Alleged failure to pay annual leave entitlement upon termination of employment – Alleged failure to pay all of the claimant’s long service leave entitlement

Legislation : Fair Work Act 2009 (Cth)
Industrial Magistrates Courts (General Jurisdiction) Regulations 2005

Instruments : Clerks Private Award 2010 [MA000002]
  Commercial Sales Award 2010 [MA000083]

Case(s) referred to
in reasons : Miller v Minister of Pensions [1947] 2 All ER 372
  Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014]
  FCA 1365
  Telum Civil (Qld) Pty Limited v Construction, Forestry, Mining
  and Energy Union [2013] FWCFB 2434
  Loves Bus and Tax Service v Zucchiatti [2006] WAIRC 5758
  Hamzy v Tricon International Restaurants trading as KFC [2001]
  FCA 1589
  Melrose Farm Pty Ltd T/as Miles Away Tours v Milword [2008]
  WASCA 175

Result :  Claim proven in part

Representation:

Claimant : In person

Respondent : Sofia Hurd and Christopher Hurd (directors of the respondent)

REASONS FOR DECISION

Background

1.      At all material times the respondent owned and ran a publishing business which traded as Impact Publications.  
2.      The business was primarily involved in the publication of travel related directories and magazines. It relied heavily upon advertising sales to fund its operations.
3.      Although the business has operated for almost 40 years, the introduction of the internet and social media has resulted in its profitability and operations declining. Whereas it used to employ several staff, the business is now carried on by the services provided by the respondent’s directors Sofia and Christopher Hurd. The claimant was its’ last employee.
4.      The respondent employed the claimant in late December 1997 after she responded to an advertisement placed in the West Australian Newspaper seeking the services of a clerk.
5.      The claimant was employed to manage of all the business’ accounts. Her duties included invoicing, recording purchases, paying accounts, posting mail, attending to the banking, preparing quarterly bank reconciliations, maintaining wages records, preparing information for the production of Business Activity Statements, chasing up debtors and the maintenance of the mail databases. Her role however changed over time in that she also became involved in the sale of advertising. The sales aspect of her work entailed travelling overseas to represent the business at conferences and other meetings.
6.      In the initial stages of her employment the claimant went into the respondent’s premises at Leederville and then West Perth a couple of days a week to perform her duties. Whereas in the last six years of her employment she worked independently from her own residence and only would go into the office for the purposes of invoicing, purchasing and producing reconciliations. That was necessary because the respondent’s MYOB accounting package was on a computer in the home office of the respondent’s directors.
7.      There is no dispute about the fact that the claimant’s role changed over time however the issue between them is the extent of the change. The claimant says that by the end of her employment, her sales work comprised about one third of her duties, whereas the respondent says that it comprised in excess of eighty percent of her work.
8.      The type and extent of work performed by the claimant is pivotal in determining which award applied to her employment at the material time (the last 6 years of employment). The claimant asserts that Clerks – Private Sector Award 2010 [MA000002] (Clerks Award) had application, whereas the respondent contends that the claimant was covered by the Commercial Sales Award 2010 [MA000083] (Sales Award).
9.      The claimant resigned her employment on or about 18 November 2016. 
10.   The claimant initially alleged with respect to this claim that she was, during the course of her employment, not correctly paid. However she has now changed her claim and says that she did not receive her correct entitlements upon termination.
11.   The parties are now in a dispute about this and other issues.

The Claim

12.   The claimant commenced this claim on 13 February 2017 utilising the small claims procedure as permitted by s 548 of the Fair Work Act 2009 (Cth)
13.   She initially alleged that the respondent failed to comply with the Clerks Award by not paying her the correct hourly rate as provided by that award. She alleged that she was underpaid $14,802 (limited to the six years prior to her resignation).
14.   In about July this year, she abandoned her claim in that regard. Instead she now claims that she was, upon termination, not paid her annual leave entitlements and correct long service leave entitlements. She claims she is owed $10,563.28 in unpaid holiday pay and $6,732.44 in unpaid long service leave.
15.   The respondent initially denied both aspects of the claim but has, subsequent to the trial hearing, conceded the long service leave part of the claim.
16.   The respondent defends the claim on the following grounds:
    1. That that claimant has sued the wrong party. It asserts that the claimant’s employer was in fact Flaxa Pty Ltd; and
    2. That the claimant was at all material times a casual employee and therefore not entitled to holiday pay, and
    3. If she is entitled to holiday pay then, the Sales Award rather than the Clerks Award would apply.

Issues

17.   Consequently the following issues need to be determined:
    1. The identity of the claimant’s employer; and
    2. Whether the claimant’s engagement was that of a casual or part-time employee; and
    3. Whether there was at any stage during the course of the claimant’s employment a change in her employment status; and
    4. Whether the claimant is entitled to holiday pay and if so, how much; and
    5. Whether a particular award had application to the claimant’s employment and if so, which one.

Burden of Proof and Standard of Proof

18.   The claimant carries the legal burden of proof for her claim whilst the respondent carries the legal burden of proving those things which it asserts.
19.   The standard of proof required to discharge the respective burdens 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 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 [374].

20.   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.

Determination

The Claimant’s Employer

21.   The claimant asserts that she worked for the respondent between 19 December 1997 and about 18 November 2016.
22.   The fact that the claimant worked for Impact Publications during that period is not in issue.
23.   The evidentiary material before this court conclusively establishes that, throughout the course of the claimant’s employment, Impact Publications was owned by Tyson Holdings Pty Ltd (see ASIC extract in tab D in exhibit 1). Other documents such as the 2000 Group Certificate issued to the claimant shows that the claimant’s employer was ‘Tyson Holdings’ (see tab E in exhibit 1). The respondent points out that subsequent PAYG payment summaries issued to the claimant indicated that the payer was in fact Flaxa Trust trading as Impact Publications. An example of such is the PAYG summary for the year ended 30 June 2014 (see annexure xxA5-1 in exhibit 2).
24.   In a letter sent to the claimant by the respondent’s solicitors, Orion Law, dated 17 March 2017 (see xxA3 in exhibit 2) the respondent’s position is explained. In that letter the writer said:
    1. Incorrect party

In your Claim, you stated that you were employed by “Impact Publications” commencing in December 1997 and ending on 18 November 2016.

According to the Australian Business Register, “Impact Publications” is registered to the Hurd Family Trust. It follows then that the trustee for the Hurd Family Trust, being Flaxa, is the appropriate respondent to the Claim as your employer.

We are instructed that Tyson is and was not the trustee of the Hurd Family Trust between December 1997 and 18 November 2016. In view of this, Tyson was never your employer and is not the appropriate respondent to the Claim.

25.   However, on the available evidence, it appears that Flaxa Pty Ltd only became the owner of Impact Publications on or about 4 May 2017 (see xxA4-5 in exhibit 2).  Indeed such was conceded by Mrs Sofia Hurd (Mrs Hurd) in her testimony.
26.   It seems from what Mrs Hurd told the court, that for accounting purposes Impact Publications’ accounts were administered through Flaxa Pty Ltd. How and why that occurred remains unexplained. Despite that it is clear that throughout the course of the claimant’s employment Impact Publications was owned by and registered to the respondent.
27.   In the circumstances, I have no hesitation in finding that the respondent was at all material times the claimant’s employer.

Was the Claimant’s Employment Casual or Part-Time and Did Her Employment Change?

28.   There can be no doubt that when the claimant was initially employed that she was employed as a casual employee. She responded to an advertisement seeking the services of a clerk to be engaged on a casual basis to work one or two days a week. The claimant readily concedes that when employed she was told that she was a casual employee.
29.   The wages records for the early years of the claimant’s employment have been lost and consequently the court has not had the ability to empirically review the pattern of the claimant’s work hours during that period. It seems that although the claimant says that her hours of work progressively increased over the early years she nevertheless remained a casual employee in attending the respondent’s premises as required managing the accounts and performing other administrative duties.
30.   Over time the claimant’s skills improved and she began selling advertising for the respondent. It is somewhat unclear as to exactly when that commenced but appears to have been around the year 2000. The claimant’s involvement in sales increased progressively to the point where she was the respondent’s primary and then only salesperson. In the years leading up to the termination of her employment, the claimant sold most of the advertising.
31.   It is quite evident from the evidence given by the claimant and the respondent’s directors that for about six years prior to the termination, the claimant worked primarily from her home. She used to book the time she worked at home and then would print her time sheets to facilitate payment. She was left very much to her own devices. There was only limited monitoring and vetting of hours. The claimant testified that some of her work entailed the maintenance of databases for sales purposes.
32.   The claimant would only go into the respondent’s office quite intermittently as required to prepare business activity statements and the like. It was Mrs Hurd’s evidence that, given that the respondent did not have any employees other than the claimant in the later stage of her employment, her payroll duties were very much limited.
33.   Mrs Hurd’s evidence is that the mainstay of the claimant’s work was not that of keeping the accounts but rather related to sales. Although the claimant does not disagree with the fact that she carried out those functions, she says that they did not form the majority of her functions.
34.   It is difficult to ascertain with any degree of precision the ratio of administration work performed by the claimant with respect to accounting and clerical work as opposed to sales, however it is quite apparent from the claimant’s own evidence that a substantial amount of work that she performed from her home was related to sales. I accept Mrs Hurd’s evidence that it was the claimant’s primary function. In that regard I accept that the claimant’s administrative work related to the maintenance of lists and databases which were administrative functions connected to sales. The maintenance of books of account became a subservient role.
35.   Indeed the fact that sales became an important and significant part of the claimant’s employment is reflected in the fact that she received commissions with respect to profits achieved on quarterly issues of the magazine.
36.   There can be no doubt that when the claimant was first employed, she was employed as a casual employee whose duties were initially covered by the Clerks Award. However, for about the last six years at least, the claimant’s duties changed. They changed so much so that she became covered by the Sales Award. As her role changed and hours increased, there was no discussion about the nature of her engagement.
37.   Clause 4 of the Sales Award states that the award covers employers throughout Australia with respect to commercial travellers, merchandises and advertising sales representation and those employees. The award is subject to various exceptions not relevant in this matter.
38.   Clause 3.1 of the Sales Award defines “advertising sales representative” to mean a person employed, substantially away from the employer’s place of business, in soliciting orders, obtaining sale leads or appointments or otherwise promoting sales for, or selling advertising space or time of any kind.
39.   I am satisfied that such description accurately reflects the claimant’s duties in working for the respondent during the period of the claim. It is clear that the claimant was left to her own devices to achieve sales. She worked away from the respondent’s place of business.
40.   When her role changed there was no discussion held between the parties about whether she worked on a full-time, part-time or casual basis.
41.   Whereas the claimant initially worked on a casual basis one or two days a week, her hours increased significantly to the point that she occasionally worked up to 65 hours per week and on the available evidence (exhibit 1), an average of 28 hours per week during the material period. I find that the claimant worked an average of 18.6 hours per week during her final years of employment.
42.   The claimant suggests that she was a part-time employee whereas the respondent says that she was a casual employee.
43.   Clause 10 of the Sales Award sets out the type of employment under the award.
44. Clauses 10.2 to 10.4 provide:

10.2 Full-time employment

Any employee not specifically engaged as a part-time or casual employee is, for all purposes of this award, a full-time employee unless otherwise specified in the award.

10.3 Part-time employment

10.4 Casual employment

45. The claimant asserts that she was in fact employed as a part-time employee and therefore entitled to annual leave. Although the respondent referred to the claimant as a part-time employee in a document produced to the court (see attachment F to exhibit 1), it is clear that it says that the claimant was at all material times a casual employee.
46. In determining the issue it is clear that the claimant did not agree with the respondent as to the number of hours to be worked, the days to be worked or the commencement and finishing times for these hours. The requirement set out in clause 10.3 of the Sales Award was not met. The hallmarks of a part-time employment is that the employee on average works less than 38 hours per week, usually works regular hours each week, is entitled to the same benefits as a full-time employee but on a pro-rata basis and is a permanent employee or on a fixed-term contract.
47. It cannot be concluded based on the evidentiary material before me that the claimant was employed on a permanent basis, that she worked regular hours and/or that she received the same benefits as a full-time employee.
48. In Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365 [140] White J observed that the modern awards establish a scheme for the employment of employees as full-time employees, part-time employees or casual employees. Employees are to be regarded as full time employees unless they are specifically engaged as part-time or casual employees.
49. The word engaged is capable of more than one meaning. One view is that it can refer to the way in which the parties identified their arrangement on commencement (see Telum Civil (Qld) Pty Limited v Construction, Forestry, Mining and Energy Union [2013] FWCFB 2434). On another view it can be a reference to the objective characterisation of the engagement, as a matter of fact and law, having regard to all the circumstances (see Loves Bus and Tax Service v Zucchiatti [2006] WAIRC 5758). In Devine His Honour White J said that the approach taken in Telum ought to be preferred.
50. In this instance it is clear that the claimant’s engagement was not one of part-time employment. Indeed it appears that there was never any discussion about part-time employment. The initial engagement was, clearly, one of casual employment. The contention by the claimant that she was a part-time employee arises from the number of hours and days worked and the labelling of her as a part-time employee in a couple of the documents produced by the respondent.
51. I observe the fact that she may have been labelled as a part-time employee does not in fact make her a part-time employee. To be a part-time employee the claimant needed to have been employed in accordance with clause 10.3 of the Sales Award. On any objective analysis, that did not occur. In any event the claimant did not work a regular pattern of hours. Her hours of work fluctuated significantly dependant upon the circumstances that existed from time to time.
52. I am satisfied that the claimant was never engaged as a part-time worker, was never told that she was a part-time worker and did not work as a part-time worker would. The subsequent labelling of her as a part-time worker did not make her a part time employee.
53. Clause 10.2 of the Sales Award provides that any employee not specifically engaged as a part-time or casual employee is, for all purposes of this award, a full-time employee unless otherwise specified in the award. It follows that I must consider whether the claimant was engaged as a casual employee. If she was not, then she must be regarded as having been employed as a full-time employee.
54. Upon commencement the claimant was engaged as a casual employee and paid at a flat hourly rate. It is clear that the parties continued that arrangement as the claimant’s hours and duties changed. The initial arrangement was the foundation for her remuneration with respect to the performance of her duties which drew her into the Sales Award. She continued to be paid at a flat hourly rate however with the provision for commission payments in some circumstances.
55. On any objective analysis, the claimant was at all material times a casual employee.
56. In Hamzy v Tricon International Restaurants trading as KFC [2001] FCA 1589 [38] the Full Court of the Federal Court of Australia said that the essence of casual employment is the absence of a firm advance commitment as to the duration of the employee’s employment or the days (or hours) the employee will work, however that is not inconsistent with the possibility of the employee’s work pattern turning out to be regular and systematic.
57. In Melrose Farm Pty Ltd T/as Miles Away Tours v Milward [2008] WASCA 175 [106] Le Miere J said ‘it is not a necessary characteristic of casual employment that the employee will work under a series of separate and distinct contracts of employment each entered into for a fixed period’.
58. Casual employment involves a situation where the employee has no guaranteed hours of work (although can work regular hours), is not paid sick or annual leave and can have his or employment ended without notice.
59. On the available evidence it appears that the parties conducted themselves on the basis that the claimant worked the hours required of her by the respondent. Those hours varied significantly each fortnight and significantly reduced towards the end of her employment. There is no evidence before the court to suggest that during the currency of her employment the claimant took sick leave or annual leave. It is the case that no payment of such has been demonstrated. Further, there is no evidence before me which would indicate that such entitlements were accrued and the liability for which was accounted for.
60. Such conduct demonstrates that the nature of the engagement was clearly a casual engagement albeit that it appears that the respondent failed to pay the claimant the 25% casual loading required by clause 10.4(b) of the Sales Award. The fact that the respondent has failed to pay the claimant’s correct entitlement does not change the nature of the engagement.
61. The claimant’s claim is, in part, founded on the fact that her employment with the respondent was longstanding. I observe however that even casual employment can be long standing.
62. The reality is that during the currency of the employment relationship both parties conducted themselves on the basis that the claimant would not be entitled to the entitlements associated with full-time or part-time employment. It is only now that the relationship has ended and the parties are in conflict with respect to various matters that the issue has arisen.
63. I am satisfied that the claimant was at all material times a casual employee. That negates full-time employment for the purposes of the award.
64. It follows that the claimant is not entitled to the annual leave payment sought.
65. Given such finding the issue of quantum falls away.

Long Service Leave

66. Following the trial hearing Mrs Hurd wrote to the court advising that the respondent would concede the claimant’s claim for long service leave entitlements. A further hearing was conducted on 17 August 2017 at which time the respondent formally made that concession.
67. I observe that the concession was appropriately made because it is apparent that the respondent’s initial calculation made with respect to the claimant’s long service leave was erroneous. Had the concession not been made, I would have found in favour of the claimant in that regard.

Result

68. The claim with respect to annual leave entitlements fails. Judgment will entered in favour of the claimant with respect to the conceded long service leave component of the claim.
69. Regulation 12 of the Industrial Magistrates Courts (General Jurisdiction) Regulations 2005 enables this court to order a party who is ordered to pay a sum of money to pay interest on that sum. Given that claimant has been denied her entitlement over a considerable period it will be appropriate that the respondent be ordered to pay to the claimant interest on her outstanding entitlement.

Orders

70. I propose to make the following orders:
    1. The respondent is ordered to pay to the claimant $6,732.44 being that part of her long service leave entitlement which remains unpaid, and
    2. The respondent is ordered to pay interest on $6,732.44 at the rate of 6% per annum calculated from 18 November 2016 until payment and if payment of $6,732.44 has not been made until judgment.
    3. The respondent pay the claimant the value of the court fees disbursements incurred in bringing the claim fixed at $40.

G. Cicchini

INDUSTRIAL MAGISTRATE