WESTERN AUSTRALIAN INDUSTRIAL MAGISTRATES COURT

CLAIMANT

AND

SHAUN HOGAN

FIRST Respondent

TERRI HOGAN

SECOND Respondent

CatchWords : Alleged breach of Building Trades (Construction) Award 1987 – Clause 41 rates of pay – Clause 13 paid rostered days off – arrangement to defer paid rostered day off - Clause 22 annual leave – Clause 15 overtime – Employer sets off alleged cash payment to employee against award entitlement – Employer alleges employee wrongfully absent and deducts amounts from award entitlements

Legislation : Vocational Education and Training Act 1996 (WA)
Industrial Relations Act 1979 (WA)
Industrial Magistrates Courts (General Jurisdiction) Regulations 2005 (WA)
Industrial Relations (General) Regulations 2015

Instrument : Building Trades (Construction) Award 1987

Result : Judgement for the Claimant

Case(s) referred to
in reasons  : McShane v Image Bollards Pty Ltd [2011] FMCA 215
    Palace Tandoori Indian Restaurant Pty Ltd & Anor [2012] FMCA                                                        258
    Linkhill Pty Ltd v Director, Office of the Fair Work Building
    Industry Inspectorate [2015] FCAFC 99
    James Turner Roofing Pty Ltd v Peters [2003] WASCA 28                                                         Young v Queensland Trustees Ltd [1956] HCA 51
    Barber v Carrier Air Conditioning Pty Ltd [2004] VSC 475

Representation:

Claimant : Mr D. Anderson as instructed by the State Solicitor of Western Australia

First Respondent : No appearance

Second Respondent : In person

REASONS FOR DECISION

1         Mr Martin Hlavaty started work on 14 August 2012 as an apprentice plumber and gas fitter. He was employed by Mr Shaun Hogan (the First Respondent) and Mrs Terri Hogan (the Second Respondent) (together, ‘the Respondents’) in a business trading as ‘Parkerville Plumbing and Gas Fitting’. His employment was subject to the Vocational Education and Training Act 1996 (WA) and the Building Trades (Construction) Award 1987 (the Award). On 21 August 2014 Mr Hlavaty informed Mr Hogan that he wished to resign with effect as soon as practicable. On 22 August 2014, he wrote to the Respondents confirming his resignation and stating his intention to finish work on 25 August 2014 which, in fact, occurred.

2         Ms Vanessa D’Cruz (the Claimant) is an industrial inspector under the Industrial Relations Act 1979 (WA) (IR Act). An industrial inspector may apply to this court for the enforcement of a provision of an award where it is alleged that an employer has contravened or failed to comply with the award: s 83(1) IR Act. In such proceedings the court may, if the contravention or failure to comply is proved, issue a caution or impose a penalty or dismiss the application: s 83(4) IR Act. Further, if in such proceedings it appears to the court that an employee has not been paid an amount which the employee was entitled under an award, the court must order that the employer pay the employee the amount which has been underpaid: s 83A(1) IR Act.

3         Ms D’Cruz alleges that, in the employment of Mr Hlavaty, the Respondents have failed to comply with the following provisions of the Award:

• Clause 41 on rates of pay; underpayment alleged to be $1,126.51;
• Clause 13 on paid rostered days off; underpayment alleged to be $1,276.89;
• Clause 22 on annual leave; underpayment alleged to be $2,397.66;
• Clause 15 on overtime; underpayment alleged to be $1,713.69.

It is convenient to identify the issues that arise for determination in this case by reference to each of the above clauses of the Award. This is undertaken below at paragraphs 5 – 15.

4         The court is not bound by any rules of evidence or procedure and may inform itself on any matter and in any manner as it thinks fit: Industrial Magistrates Courts (General Jurisdiction) Regulations 2005, Reg 35(4). Although the court is not bound by rules of evidence, it remains necessary for the Claimant to prove the claims made on the balance of probabilities and the court will only act on evidence having rational probative force: McShane v Image Bollards Pty Ltd [2011] FMCA 215 [7]. The First Respondent did not appear at the trial. There is evidence (exhibit 1) that he has suffered from a serious medical condition for the past three years and that the condition prevents him from participating in the trial of these proceedings. He did not seek an adjournment of the trial and the Claimant did not seek judgment in default of his appearance. His illness did not prevent him from preparing a substantial witness statement that was signed by him on 1 November 2017 (exhibit 8). The Claimant’s case and evidence against him and the Second Respondent are identical. The expedient course has been to consider the case against the First Respondent on the basis of all of the evidence adduced at the trial, including his witness statement. Where there is a dispute about a significant fact, I have noted that the weight to be accorded to the witness statement of the First Respondent must reflect the fact that he was unavailable for cross-examination at the trial.

Clause 41 on rates of pay: was there a cash payment of the tool allowance?

5         The Claimant alleges and the Respondents admit that, compared to the weekly wage provided for in cl 8(2) and cl 41(1) of the Award and the weekly industry and tool allowance provided for in cl 8(3), (6) and cl 41(1)(d) of the Award, there was an underpayment to Mr Hlavaty in each of 100 weeks between 14 August 2012 and 16 August 2014. The admitted contravention reflected the fact that the Respondents:

• In the period between 14 August 2012 and 6 July 2013, did not make a weekly payment of a tool allowance in the amount of $25.10 as required by cl 8(6) of the Award ($1,079.30); and
• Made arithmetic errors when converting the weekly rates provided by the Award to an hourly rate and when ‘rounding’.

The Respondents case in answer to this part of the claim is to admit a failure to comply with cl 41 in each of 100 weeks between 14 August 2012 and 16 August 2014 but to allege that a substantial portion of the resulting underpayment (being the weekly tool allowance payable from August 2012 – July 2013) was remedied by a cash payment to Mr Hlavaty of $1,080 on 23 September 2013. Mr Hlavaty denies the offer or receipt of any such cash payment. The issue for me to determine, relevant to my determination on whether there is an outstanding underpayment to Mr Hlavaty and relevant also to the issue of any quantum of penalty is whether the payment of cash alleged by the Respondents was made (‘Issue 1’). For the reasons set out below (at paragraph 16 and following), I am not satisfied of any cash payment having been made to Mr Hlavaty. Orders will be made reflecting my finding of the contravention of clause 41 of the Award in each of 100 weeks resulting in an underpayment to Mr Hlavaty of $1,126.51.

Clause 13 on paid rostered days off: was there a failure by the Respondents to comply and; if so, what amount has been underpaid?

6         Clause 13(1) of the Award provides for a 38 ordinary hour working week to be worked in a 20 day, four week cycle. Each 20 day cycle comprised 19 days of eight hours work between 7.00 am and 6.00 pm with 24 minutes of each day accruing as an entitlement to take the fourth Monday in each cycle as a paid day off. As a result, over the whole period of his employment, Mr Hlavaty accrued an entitlement to 192 hours to be taken as paid days off on each fourth Monday. Early in his period of employment, Mr Hlavaty and the Respondents orally agreed that Mr Hlavaty’s entitlement to a paid rostered day off could be deferred from the date of entitlement (each fourth Monday per the Award), to be taken on a future date that was mutually convenient to Mr Hlavaty and the Respondents (‘the Deferred Rostered Day Off Arrangement’).

7         The Claimant alleges that as a result of the Deferred Rostered Day Off Arrangement, Mr Hlavaty had deferred and not yet taken an accrued entitlement to 77.2 hours as paid day(s) off when, on 25 August 2014, his employment ended. The Claimant alleges a contravention of cl 13(1) of the Award for each and every fourth Monday which Mr Hlavaty did not take as a paid day off and calculates an underpayment of $1,276.89 being 77.2 hours untaken as a paid day off at the ordinary rate applicable as at 25 August 2014 ($16.54 per hour).

8         The Respondents case is to identify, primarily by reference to the work diaries of the First Respondent, 114 hours (i.e. 15 days at 7.6 hrs per day) which are alleged to have been taken by Mr Hlavaty as paid rostered days off pursuant to the Deferred Rostered Day Off Arrangement and which have not been brought to account by the Claimant. The Respondents contend that, when these 114 hours is brought to account, they are a complete answer to the Claimant’s allegation of a 77.2 hour deficiency.

9         The issue for me to determine (relevant to a calculation of Mr Hlavaty ’s entitlements), is how many paid rostered days off were taken and (relevant to any penalty for contravention), whether the Deferred Rostered Day Off Arrangement resulted in any contravention of clause 13 (‘Issue 2’). For the reasons set out below at paragraph 24 and following, I conclude that, as a result of there being no agreement in writing for the taking of ‘another alternative day in the current or next four week cycle’, the Deferred Rostered Day Off Arrangement resulted in a contravention of clause 13 of the Award. I also conclude that the underpayment to Mr Hlavaty arising from the contravention of cl 13 of the Award is $1,276.89. Orders will be made reflecting my finding of the contravention of clause 13 of the Award and an underpayment to Mr Hlavaty of $1,276.89.

Clause 22 on annual leave: was there a contravention by the Respondents in making certain deductions from the accrued entitlement of Mr Hlavaty and, if so, what amount has been underpaid?

10      It is accepted by the Second Respondent that, between 24 December 2012 and 11 January 2014 and as a result of factors including converting weekly rates to hourly rates and not applying an annual leave loading, the Respondents made underpayments to Mr Hlavaty with respect to annual leave that was taken during this period.1 In the result there was a contravention of cl 22(7) on six occasions and a resulting total underpayment of $193.92.2 It is also accepted by the Second Respondent that, at the end of his employment Mr Hlavaty, had accrued (untaken) annual leave that equated to an entitlement, pursuant to cl 22(4) of the Award, to the sum of $2,203.74 and that this amount was not paid to him.3 While the Respondents accept the accrued entitlement to annual leave, they seek to deduct from that entitlement the following items:

• An amount of $2,214.46 which was said to be a conditional payment made by the Respondents to Mr Hlavaty to reimburse TAFE tuition fees paid by him. The Respondents submit that Mr Hlavaty was required to refund the payment because of the non-fulfilment of a relevant condition, namely, completion of his whole apprenticeship as an employee of the Respondents. The Second Respondent referred to the reimbursement as a ‘Completion Incentive Payment’. Mr Hlavaty agreed that the Respondents paid him $2,214.46 to reimburse TAFE tuition fees paid by him. However, Mr Hlavaty denies that the payment was conditional on him remaining an employee of the Respondents for the duration of his apprenticeship. It will be necessary to determine whether the payment was ‘conditional’ as alleged by the Respondents and, if so, whether the Respondents are entitled to deduct it from Mr Hlavaty’s accrued annual leave entitlement (‘Issue 3’).
• Amounts paid to Mr Hlavaty for attending TAFE or work on specified dates when, it is alleged by the Respondents, he did not attend TAFE or work and was inexplicably absent from those places. Mr Hlavaty asserts that he attended TAFE as required and was available for work as required. It will be necessary to determine whether the Respondent’s have proven those allegations of non-attendance at TAFE or work (‘Issue 4’).

For the reasons set out below at paragraph 35 (and following), I am not satisfied that reimbursement of TAFE tuition fees by the Respondents was a conditional payment and I am not satisfied that Mr Hlavaty was inexplicably absent from TAFE or work on any of the days alleged by the Respondents. Orders will be made reflecting my finding of the contravention of clause 22(7) of the Award in each of six weeks and of cl 22(4) of the Award at the end of his employment resulting in underpayments to Mr Hlavaty of $193.92 and $2,203.74 respectively.

Clause 15 on overtime: was there a failure by the Respondents to comply and, if so, what amount has been underpaid?

11      Clause 15(1) of the Award provides that all time worked in excess of ‘ordinary time of work’ is paid at the rate of 1.5 times ordinary rates for the first two hours and double time thereafter. ‘Ordinary time of work’ is calculated in accordance with cl 13(1) of the Award and results in overtime being payable for each hour in excess of eight hours each day and 152 hours over the first 19 days of a 20 day work cycle. The Claimant’s allegation of an underpayment of a total of $1,713.69 in overtime is the sum of underpayments in two categories on 82 separate pay dates.

12      First, as a result of the Deferred Rostered Day Off Arrangement, when Mr Hlavaty worked or attended TAFE on the twentieth day of the 20 day work cycle, the Claimant alleges that he became entitled to overtime in accordance with cl 15 for that whole day and this was not paid. The result was an underpayment of overtime in the sum of $1,393.33 corresponding to the following 15 pay dates: 5 October 2012 (9.5 hours); 30 November 2012 (7.6 hours); 25 January 2013 (11 hours); 22 March 2013 (7.6 hours); 17 May 2013 (10.5 hours); 14 June 2013 (eight hours); 6 September 2013 (10 hours); 4 October 2013 (nine hours); 29 November 2013 (7.6 hours); 24 January 2014 (8.5 hours); 21 March 2014 (nine hours); 16 May 2014 (11 hours); 13 June 2014 (eight hours); 11 July 2014 (9.5 hours); 8 August 2014 (10.25 hours). As a result of my conclusion that the Respondents have failed to satisfy me that Mr Hlavaty took a rostered day off (RDO) on any of these days (see below at paragraph 31), the Claimant must succeed on this aspect of the claim.

13      The second category arises from when Mr Hlavaty worked in excess of eight hours per day and he became entitled to overtime for those hours in accordance with cl 15 of the Award. This was not calculated correctly by the Respondents on various dates between 14 August 2012 and 25 August 2014. The result was an underpayment of overtime in the sum of $320.36. These underpayments occurred primarily as a result of a combination of one or more of: a failure to include a tool allowance in calculations; incorrectly converting a weekly rate payable under the Award to an hourly rate; failing to account for a change in Award rates. The dates of the underpayments were: 28 pay dates between 14 August 2012 and 6 July 2013; six pay dates between 7 July 2013 to 13 August 2013; 30 pay dates between 14 August 2013 to 5 July 2014; two pay dates between 6 July 2014 and 13 August 2014 and one pay date between 14 - 25 August 2014. I have already noted that the Second Respondent accepts that errors were made by the Respondents with respect to the tool allowance and conversion of weekly to hourly rates.

14      I am satisfied that the Claimant must succeed on the second category ($320.36). The Claimant’s calculations in the previous two paragraphs, accepted by me, are based upon: hours worked by Mr Hlavaty as revealed by timesheets supplied by the Respondents to the Claimant; amounts paid by the Respondents to Mr Hlavaty as revealed by payslips supplied by the Respondents to the Claimant or, where an anomaly appears, on the basis of bank records of Mr Hlavaty; and setting off (i.e. deducting) any overpayments made by the Respondents to Mr Hlavaty during the same pay period (e.g. the period ending 6 October 2012).

15      I am satisfied that the Respondents have contravened cl 15 of the Award in each of 82 weeks and the resulting underpayment to Mr Hlavaty was $1,713.69. Orders will be made reflecting my finding of the contravention of cl 15 of the Award in each of 82 weeks resulting in an underpayment to Mr Hlavaty of $1,713.69.

Issue 1: Was there a cash payment of the tool allowance (clause 41)?

16      I noted in the introduction to these reasons that the Respondents admit to not properly accounting for the weekly tool allowance provided by the Award ($25.10 per week) until August 2013 and also admit arithmetic errors when converting the weekly rate provided by the Award to an hourly rate for the purposes of calculating pay to Mr Hlavaty. I also noted that the Respondents’ case in answer to this claim is to allege that the underpayment of the tool allowance was remedied at the earliest reasonable opportunity by a cash payment to Mr Hlavaty of $1,080 on 23 September 2013.

17      The Second Respondent’s evidence on this issue was to the following effect:4

[W]hen I’d finished the audit … on 14 August [2013], I thought, ‘Gee, …  the second year rate is a lot higher than the first year rate’. And I initially thought it was to do with the change in the tax rate because there’d been a reduction in tax.  But I realised, when I checked … the first year rate, and I realised that … incorporating the $25.10 tool allowance into the hourly rate, when I’d set up payroll .. there’d been a miscalculation, it hadn’t actually gone into the hourly rate. So, what I realised was that Martin, for all of first year, had not been receiving tool allowance. I spoke with Shaun about that, that evening, and let him know and we felt, you know, we felt we wanted to rectify it immediately. And Shaun suggested that we give him, offer cash to Martin.  … Shaun said, ‘Well, look, we’ll offer Martin cash’, which is what we did.  So on the Monday morning, I presented Martin with all of the payslips with the new tax being accounted for.  And Shaun - well, I let I him know what happened about the tool allowance and we offered him cash and he accepted it.  … I didn’t get a receipt … …
[[H]ow much was paid?]   $1,080. 
[And who was present when it was paid?]   Shaun, Martin and myself.
[And where did this take place?]   This took place at 255 Iron Road in Stoneville.
Is there anything else that you wanted to say about that?   Um, oh, the calculation was based on, um - I think I’d calculated it out at - from memory, it was 44 weeks, um, or maybe more.  And then I - I did a rough calculation on reduction of tax, what that would be, um, and I worked out that it was around about $1,080.  …

18      The witness statement of the First Respondent records that he recalled talking with Mr Hlavaty on a Monday in August 2013 when Mr Hlavaty accepted a $1,080 cash payment on account of an unpaid tool allowance.5

19      Mr Hlavaty’s evidence on this issue was to the effect that he did not receive a cash payment of $1,080 on 23 September 2013 or, indeed, any cash payment on any date from the Respondents. He stated that the only payments to him by the Respondents were by way of electronic transfer to his bank account. He stated that the only cash transaction between himself and the Respondents was an occasion when he made a cash payment to the Respondents of $900 being a refund of an overpayment to him.6

20      I note that if there was a cash payment on 23 September 2013, the Respondents have failed to adduce evidence of compliance with the obligations upon them imposed by cl 28 of the Award to ‘keep a record (electronic or mechanical), for each employee, from which can be readily ascertained the specific allowances paid each pay week (my emphasis); and cl 34(5) of the Award whereby any allowance paid in cash must be in an envelope or accompanied by a statement containing the proscribed details (date of payment, period covered by the payment, amount of allowances paid etc.). The importance of an employer complying with legal obligations to maintain records of payments to employees has been the subject of relevant comment by Reithmuller FM (albeit in a different statutory context) in Palace Tandoori Indian Restaurant Pty Ltd & Anor [2012] FMCA 258:

Whilst the record keeping obligation with respect to pay slips only appears in the Regulations, its central importance in industrial matters cannot be underestimated. Proper pay slips allow employees to understand how their pay is calculated and therefore easily obtain advice. Pay slips provide the most practical check on false record keeping and underpayments, and allow for genuine mistakes or misunderstandings to quickly be identified. Without proper pay slips employees are significantly disempowered, creating a structure within which breaches of the industrial laws can easily be perpetrated [67].

21      I also note that the work diary of the First Respondent for 23 September 2013 does not contain a reference to a cash payment to Mr Hlavaty.

22      The onus is upon the Respondents to prove the discharge of the Award obligation by way of a cash payment: Young v Queensland Trustees Ltd [1956] HCA 51; (1956) 99 CLR 560 at 569; Barber v Carrier Air Conditioning Pty Ltd [2004] VSC 475. The Second Respondent and Mr Hlavaty each gave confident, plausible evidence supporting their respective (contradictory) accounts concerning the alleged cash payment. The First Respondent was not available for cross-examination. There is no reason to prefer the account of the Respondents over the account of Mr Hlavaty, not least because the Respondents have not adduced any documentation in support of their account. The Respondents have failed to satisfy me that it is more probable than not that the cash payment was made.

23      There will be an order that the Respondents have contravened clause 41 of the Award in each of 100 weeks. There will also be an order that the Respondents pay to Mr Hlavaty the sum of $1,126.51 in respect of that contravention.

Issue 2: Was there a failure to comply with clause 38 on paid rostered days off and, if so, what amount has been underpaid?

24      I noted in the introduction to these reasons that: Mr Hlavaty accrued an entitlement to 192 hours to be taken as paid days off on each fourth Monday; early in his period of employment, Mr Hlavaty and the Respondents entered the Deferred Rostered Day Arrangement;7 and the Claimant alleges that Mr Hlavaty had deferred and not yet taken an accrued entitlement to 77.2 hours when his employment ended on 25 August 2014.

25      The Respondents’ case is that, in alleging a 77.2 hour deficiency in Mr Hlavaty’s paid rostered day off entitlement, the Claimant has failed to account for the following 15 days (114 hours) said to have been taken by Mr Hlavaty as a paid day off pursuant to the Deferred Rostered Day Off Arrangement and evidenced by diary entries (exhibit 10) made by the First Respondent (‘the 15 Extra RDO Days’):

• Wednesday 28 September 2012 (work diary states, ‘R.D.O’);
• Tuesday 16 October 2012 (work diary states, ‘R.D.O’);
• Monday 5 November 2012 (work diary states, ‘R.D.O’);
• Tuesday 13 November 2012 (no relevant entry. A yellow ‘post-it’ note states, ‘No Show TAFE’);
• Monday 11 February 2013 (work diary states, ‘R.D.O’);
• Thursday 7 March 2013 (work diary states, ‘R.D.O’);
• Thursday 28 June 2013 (work diary states, ‘Martin Day Off’ and ‘R.D.O’);
• Friday 16 August 2013 (work diary states, ‘R.D.O’);
• Monday 4 November 2013 (work diary states, ‘R.D.O’);
• Monday 16 December 2013 (work diary states, ‘R.D.O’);
• Monday 23 December 2013 (work diary states, ‘R.D.O’);
• Tuesday 24 December 2013 (work diary states, ‘R.D.O’ and ‘Martin Work?’);
• Tuesday 28 January 2014 (work diary states, ‘R.D.O’);
• Monday 24 February 2014 (work diary states, ‘R.D.O’); and
• Monday 31 March 2014 (work diary states, ‘R.D.O?’ A yellow ‘post-it’ note states, ‘Marked Sick on T – Sheet’).

26      13 November 2012 and 16 December 2013. The First Respondent records in his witness statement8 that 13 November 2012 and 16 December 2013 were included among the 15 Extra RDO Days as a result of the Respondents’ discovery, after the Claimant commenced these proceedings, of unexplained TAFE absences by Mr Hlavaty on those dates. The Respondents’ determined to ‘allocate’ a paid rostered day off to those dates. It is unclear to me whether the diary entry of ‘R.D.O’ for those dates was made before or after the commencement of these proceedings. The significance of alleged unexcused TAFE absences will be considered below at paragraph [40]. It is not appropriate to consider those dates in calculations for the purpose of the Claimant’s allegation of a contravention of cl 13 of the Award on paid rostered days off.

27      The 15 Extra RDO Days were not accounted for by the Claimant because the payslips supplied by the Respondents to the Claimant, before the Claimant commenced proceedings, did not refer to a paid rostered day off for any of those dates and timesheets relevant to those dates were either not supplied to the Claimant at all (28 September 2012, 5 November 2012, 13 November 2012, 4 November 2013, 16 December 2013, 23 December 2013, 24 December 2013, and 20 August 2014) or did not refer to a paid rostered day off. If the dates included in the list of the 15 Extra RDO Days were in fact taken as paid rostered days off, the Respondents have failed to produce records of that fact in the form which is required of: s 49D of the IR Act (employer must ensure details are recorded of all leave taken by the employee); Regulation 4 of the Industrial Relations (General) Regulations 2015 (employer must make entries for each pay period in the form originally recorded and is not to alter the record unless the alteration is annotated to identify the nature and date of the alteration); and the following clauses of the Award: cl 28 (time records) and cl 34 (pay packet details). The diary entries do not satisfy the record keeping obligations imposed by statute and the Award.

28      The First Respondent records that for the first six weeks of Mr Hlavaty’s employment, he checked the time sheets of Mr Hlavaty and noted that they were correct. 9 Subsequently, the Respondents’ claim that: (i) Mr Hlavaty did not record on his time sheet each paid rostered day off that was taken by him; (ii) they did not record on Mr Hlavaty’s payslip each paid rostered day off that was taken by him. The First Respondent recorded that he had a practice of completing, in advance, a diary entry showing every fourth Monday (or subsequent day after a public holiday ‘Monday’) as ‘RDO’ for ‘all apprentices I employ’. These dates were taken as paid rostered days off unless changed by agreement and he changed his diary to reflect the agreement. The First Respondent recalls the circumstances of agreed changes that resulted in paid rostered days off being taken by Mr Hlavaty on the following dates: 28 September 2012 (short notice to allow quotation to be done by Mr Hogan); 11 October 2012 (son’s wedding); three days being 28 June 2013, 1 July 2013, and 2 July 2013 (Melbourne trip); three days being 10 October 2013, 11 October 2013 and 21 October 2013 (Thailand trip).

29      Mr Hlavaty records that he did not maintain his own personal record of days taken as paid rostered days off.11 However, he claimed to be accurate in his completion of weekly timesheets, including on ticking the box on the timesheet marked ‘RDO’ when he took a rostered day off.12 Mr Hlavaty recalled taking rostered days off in June or July 2013 to go to Melbourne. (I note that the Claimant has accounted for the following as ‘rostered days off’: 1 July, 2 July and 29 July 2013.) He also stated that he anticipated using rostered days off attributable to April, May and June 2014 for a trip to Melbourne from 28 August to 1 September 2014 and the Second Respondent had, by email on 13 June 2014, approved this proposal. Mr Hlavaty was generally resilient in cross-examination on these matters. Isolated examples of inaccurate timesheets were identified and put to Mr Hlavaty by Mr Terri Hogan. He admitted the inaccuracy and, in my view, satisfactorily rejected the suggestion that those few inaccurate sheets were emblematic of systemic errors by him. He also satisfactorily rejected a suggestion put to him that the terms of an email exchange in June 2014 contained an admission that his accrued entitlement at that date was no more than three days. My view is that the ordinary meaning of the text of the relevant emails bear out his evidence.

30      The Claimant identified inaccuracies in the diaries of the First Respondent. Some dates show ‘RDO’ and the Respondents do not assert those dates should be accounted for as unpaid rostered day off: e.g. 5 August 2013, 2 December 2013 and 7 April 2014. Some dates do not reflect an agreement made by email in June 2014, see the entries for May, June and July 2014.

31      Weighing the factors noted above, and particularly placing weight on the payslips created by the Respondents before the claim was filed as well as the timesheets created by Mr Hlavaty, I am not satisfied that any of the 15 Extra RDO Days was taken as paid leave as required by the Award or pursuant to the Deferred Rostered Day Off Arrangement. The result is an underpayment of $1,276.89 to Mr Hlavaty being 77.2 hours untaken as a paid day off at the ordinary rate applicable as at 25 August 2014 ($16.54 per hour).

32      The Respondents’ case is considered above on the question of the calculation of Mr Hlavaty’s entitlements. However, the Deferred Rostered Day Off Arrangement also resulted in a contravention of the Award. Clause 13 of the Award provides for the possibility of agreement to an alternative to each fourth Monday being the paid rostered day off.13 However, the Award proscribes that the agreement must be in writing and that the alternative day must be in the four week cycle. The Award does provide for a deferred paid rostered day off after the four week cycle. The existence of the Deferred Rostered Day Off Arrangement is no answer to the rights and obligations found in cl 13 except insofar as it resulted in an agreement in writing on an alternate day in the four week cycle. The Respondents have not adduced evidence of any written agreement except for email exchanges of 1 October 2012 and 13 June 2014. None of those agreements resulted in an alternate rostered day off within the relevant four week cycle.

33      There will be an order that the Respondents have contravened cl 13 of the Award. There will also be an order that the Respondents pay Mr Hlavaty the amount of $1,276.89 being the underpayment resulting from the contravention.

Issues 3 and 4: Was there a contravention of cl 22 of the Award on annual leave when the Respondents made certain deductions from the accrued entitlement of Mr Hlavaty and, if so, what amount has been underpaid?

34      In the introduction to these reasons I noted that, as a result of converting weekly award rates to hourly rates and not applying an annual leave loading, the Second Respondent accepts that, between 24 December 2012 and 11 January 2014, the Respondents made underpayments with respect to annual leave of $193.92. I also noted that the Second Respondent accepts that, at the end of his employment, Mr Hlavaty had an entitlement to $2,203.74 in untaken annual leave (per cl 22(4) of the Award) and that the Respondents purport to deduct from that entitlement:

(i)                 a ‘Completion Incentive Payment’ being a refund of the amount of $2,214.46 paid to Mr Hlavaty to reimburse TAFE tuition fees paid by him to TAFE; and

(ii)               the wages paid to Mr Hlavaty for days when, in breach of his obligations under the Award he did not attend TAFE or make himself available for work.

35      Issue 3: ‘Completion Incentive Payment’. The Respondents allege that at the commencement of Mr Hlavaty’s employment, he entered into an oral agreement to the effect that TAFE tuition fees would be reimbursed on condition that Mr Hlavaty complete his four year apprenticeship with Parkerville Plumbing. The Second Respondent gave evidence of the making of this agreement during a conversation around the time of the commencement of his employment and on the occasion of the signing of his ‘training contract’ and of using the phrase ‘Completion Incentive Payment’ in that conversation.14 The First Respondent avers to the same conversation in his witness statement.15 The Respondents contend that the amount of $2,214.46 paid by them to Mr Hlavaty during the course of his employment to reimburse TAFE tuition fees must now be repaid by Mr Hlavaty to them as a result of him initiating the termination of his employment before the completion of his apprenticeship. The Respondents seek to set-off this amount against the entitlements of Mr Hlavaty at the end of his employment, including his entitlement to accrued annual leave.

36      Mr Hlavaty admits receipt of $2,214.46 from the Respondents on account of reimbursement of TAFE tuition fees paid by him. However, he denies the terms of the agreement as alleged by the Respondents or the use of the phrase ‘Completion Incentive Payment’. Mr Hlavaty gave evidence to the effect of an agreement that he would be reimbursed TAFE tuition fees paid by him on condition only that he passed each block to which the fee related. Mr Hlavaty also adduced an email from the Second Respondent to him dated 12 December 2012 and said by Mr Hlavaty to be in connection with the first occasion of reimbursement stating, ‘[B]y the way we are happy to pay for your TAFE fees if you would like to forward me the invoice.’

37      For two alternative reasons, the Respondents case with respect to what is describes as the ‘Completion Incentive Payment’ must fail.

38      Firstly, for similar reasons to those expressed above on whether there had been a cash payment of the tool allowance, the Respondents have failed to satisfy me that there was an agreement in terms as alleged by them. The Second Respondent and Mr Hlavaty each gave confident, plausible evidence supporting their respective contradictory accounts of an oral conversation. Each was resilient in cross-examination. The First Respondent was not available for cross-examination. The email from the Second Respondent to Mr Hlavaty of 12 December 2012 is consistent with the account of Mr Hlavaty insofar as it omits any reference to the phrase ‘Completion Incentive Payment’. The onus is on the Respondents, as the proponents of an agreement that would entitle them to deduct an amount from the Award entitlements of Mr Hlavaty, to prove the existence of the agreement in the terms alleged. The Respondents have failed to satisfy me that it is more probable than not that it was agreed with Mr Hlavaty that the $2,214.46 paid to him was conditional upon him completing his four year apprenticeship at Parkerville Plumbing.

39      Secondly, if the agreement was in terms as alleged by the Respondents (contrary to my finding):

(i)                 The Respondents are not entitled to set-off any ‘above-award’ payments for TAFE tuition re-imbursement against the accrued annual leave entitlements of Mr Hlavaty payable in accordance with cl 22(4) of the Award. A payment by an employer ‘expressly or impliedly to cover a particular obligation (e.g. TAFE re-imbursement) cannot be claimed as a set off against monies payable under the Award to cover some other incident of employment’ 18;

(ii)               The Respondents may be entitled to bring a claim for the same amount in a court with jurisdiction to determine the claim. Insofar as the Respondents seek to overcome the prohibition on set off by asserting a counterclaim for recovery of the same amount, this court does not have jurisdiction to determine such a counterclaim. This court is a ‘court of record’ created by s 81 of the IR Act. However, unlike the Magistrates Court of Western Australia, this court does not have a general civil law jurisdiction.19 The jurisdiction of this court is proscribed by s 81A and s 81AA of the IR Act. Nothing in those provisions would confer jurisdiction on this court to determine a counterclaim of the nature of the agreement alleged by the Respondents.

40      Issue 4: Alleged Unexplained Absences: TAFE. The Respondents rely upon attendance records obtained from South Metropolitan TAFE to allege that Mr Hlavaty was absent from TAFE without satisfactory explanation on three dates, justifying deduction from his entitlement to accrued annual leave entitlements of amounts paid to Mr Hlavaty in wages for those dates: 13 November 2012; 2 April 2014 (half day); and 1 July 2014. A letter from a Paul Hardman, Manager Apprenticeships and Trainee Support Unit of South Metropolitan TAFE, was admitted into evidence and, consistent with the case of the Respondents, states that attendance records of TAFE indicate absence on the following dates: 13 November 2012; 2 April 2014 (‘Partial absence’); and 1 July 2014.21 The Second Respondent gave evidence recalling conversations between Mr Hlavaty and the First Respondent regarding a TAFE absence in November 2012 in which Mr Hlavaty promised to be diligent in the future and the Respondents agreed to reimburse Mr Hlavaty’s TAFE tuition fees for the block just completed and to take no further action in relation to the absence.22 The Second Respondent also gave evidence of inconsistent practices of Mr Hlavaty concerning timesheets that were used to account for his attendance at TAFE.23 The witness statement of the First Respondent contains: a detailed account of conversations with each of Mr Hlavaty and the Second Respondent in December 2012 regarding a TAFE absence on 13 November 2012 (consistent with the evidence of the Second Respondent);24 the observation that he assumed that Mr Hlavaty attended TAFE as required on 2 April 2014;25 a detailed account of Mr Hlavaty having informed him that his TAFE obligations had ended on 26 June 2014 and the First Respondent recalling that Mr Hlavaty ‘worked hours with Parkerville Plumbing on 27 June 2014, 30 June 2014 and 1 July 2014’.26

41      Mr Hlavaty gave evidence that he attended TAFE as required. He was unable to specifically recall what he was doing on 13 November 2012, 2 April 2014 and 1 July 2014 and noted that, in his experience, TAFE attendance records were not always completed as required.27

42      The Respondents have failed to satisfy me of a right to reduce the entitlements arising from being absent from TAFE as alleged. If Mr Hlavaty was absent from TAFE on 13 November 2012, the evidence of the Respondents reveals a promise by them to waive any right to deduct wages in exchange for a promise by Mr Hlavaty to be diligent about future TAFE attendance. The payment of Mr Hlavaty’s TAFE tuition fees for the block including 13 November 2012 is consistent with that waiver. The Respondents have failed to satisfy me that Mr Hlavaty was not at TAFE for a half day on 2 April 2014. I note the plausible evidence of Mr Hlavaty on the inaccuracy of TAFE attendance records. The Respondents have failed to satisfy me that Mr Hlavaty was not at work on 1 July 2014. I note the evidence of the First Respondent to the effect that Mr Hlavaty completed TAFE obligations on 26 June 2014 and subsequently attended work.

43      Alleged Unexplained Absences: Work. The Respondents allege that Mr Hlavaty was inexplicably absent from work on the following dates, justifying deduction from his entitlement to accrued annual leave entitlements of amounts paid to Mr Hlavaty in wages for those dates: 16 – 21 December 2013; 20 – 22 August 2014.

44      16 – 21 December 2013. The Respondents case regarding 16 – 21 December 2013 is that, after informing the Second Respondent that he was required to attend TAFE in the week commencing 16 December 2013, Mr Hlavaty failed to attend TAFE and failed to attend to work for Parkerville Plumbing. The evidence relied upon by the Respondents includes TAFE records showing Mr Hlavaty was last required to attend on 13 December 2013 and the (admitted) failure of Mr Hlavaty to lodge a timesheet for the relevant week. The Second Respondent gave evidence of having been told by the First Respondent that Mr Hlavaty would have a rostered day off on 16 December 2013 and spend the rest of the week in ‘the workshop’ and that she was then told by Mr Hlavaty (around 13 December 2014) of a requirement to attend TAFE in the week starting 16 December 2013.28 The Second Respondent stated that she did not sight Mr Hlavaty during that week. The First Respondent records that he travelled overseas between 7 – 21 December 2013 and left instructions for Mr Hlavaty to ‘take an RDO on 16 December 2013’ and to complete work duties at the workshop between 17 – 20 December 2013.29 It also refers to a conversation between the Respondents upon his return from overseas that is consistent with the evidence of the Second Respondent on earlier events. Mr Hlavaty gave evidence that in the period 16 – 21 December 2013 he recalled spending all or part of that week working on a bathroom extension at an address in Gum Glade Road, Mahogany Creek.30 He recalled that the work commenced immediately following a TAFE block and he identified the relevant dates as the week commencing Monday 16 December 2013. Mr Hlavaty stated that he recalled working alone on the extension while the First Respondent was on holidays in Turkey and that he and the First Respondent had spent some time together preparing for the job before the First Respondent went overseas. Mr Hlavaty also recalled conversations with a TAFE lecturer about the job and recalled conversations with the Second Respondent (denied by her) about completing the job while the First Respondent was away. Mr Hlavaty stated (in cross-examination) that he may have divided his time during that week between Gum Glade Road and workshop duties.

45      The Respondents have failed to satisfy me that Mr Hlavaty was not available for work for them in the week of 16 December 2013. The detailed evidence of Mr Hlavaty on his activities during that week stands in contrast to the evidence of the Second Respondent relying upon the improbability of conversations attested by Mr Hlavaty. The Second Respondent also concedes the possibility that she was unaware of the presence of Mr Hlavaty in the workshop. The First Respondent was overseas during the critical period and he is unable to attest to whether Mr Hlavaty was at work. Mr Hlavaty’s failure to lodge a timesheet is inexplicable. However, it does not follow that he was not available for work.

46      20 – 22 August 2014 The Respondents case regarding 20 - 22 August 2014 is that Mr Hlavaty failed to attend to work at all on 20 August 2014 and that, although Mr Hlavaty attended work on each of 21 August and 22 August 2014, he refused to carry out directions given by the First Respondent. The Respondents case is supported by the testimony of the Second Respondent and the witness statement of the First Respondent.32 Mr Hlavaty gave evidence that the First Respondent consented to Mr Hlavaty’s request made on 15 August 2014 for a ‘day off’ on 20 August 2014 on the occasion of his girlfriend’s birthday.33 Mr Hlavaty also gave evidence that he attended to his work as requested by The First Respondent on 21 and 22 August 2014.34 It is not in dispute that Mr Hlavaty did not attend work on 20 August 2014. Contrary to the case for the Respondents, the Claimant has accounted for this non-attendance by counting 20 August 2014 as a ‘rostered day off’ for the purpose of calculating whether there is any deficiency in Mr Hlavaty’s entitlement, at the end of his employment, to any paid rostered days off.35

47      In circumstances where Mr Hlavaty has given detailed evidence of work undertaken by him on 21 – 22 August 2014, the Respondents have failed to satisfy me that Mr Hlavaty’s conduct on any of those days constituted a repudiation of his contract of employment so as to amount to the unilateral termination of his employment. Mr Hlavaty is entitled to be paid for those days.

48      There will be an order that the Respondents have contravened cl 22(7) of the Award in each of six weeks and cl 22(4) of the Award at the end of Mr Hlavaty. There will also be an order that the Respondents pay Mr Hlavaty amounts of $193.92 and $2,203.74 in respect of those contraventions.

Conclusion

49      For the reasons set out above, I am satisfied that the Respondents have failed to comply with the following provisions of the Award:

• Clause 41 on rates of pay, resulting in an underpayment to Mr Hlavaty of $1,126.51;
• Clause 13 on paid rostered days off; resulting in an underpayment to Mr Hlavaty of $1,276.89;
• Clause 22 on annual leave, resulting in an underpayment to Mr Hlavaty of $2,397.66;
• Clause 15 on overtime, resulting in an underpayment to Mr Hlavaty of $1,713.69.

50      The total underpayment is $6,514.75. Formal orders relating to the contraventions and the underpayment will be made in due course. I will hear from the parties on pre-judgment interest and penalties.

M. FLYNN

INDUSTRIAL MAGISTRATE

1 Transcript at page 48.

2 $48.09 on 4/1/13, $30.03 on 12/1/13, $115.36 on 14/10/13 and, over December 2013-January 2014: $0.04, $0.18 and $0.22.

3 Transcript at page239:
FLYNN IM:   Ms Hogan, I will get you - I did confirm with this - this earlier with you but I’ll get you to reconfirm, if you like.  As I understand it, you don’t take issue with the calculations done by Ms D’cruz in relation to the - what’s called ‘The Untaken Annual Leave’.  So
HOGAN, MS:   No, no issue at all.
FLYNN IM:   All right.  I just wanted to confirm that, all right, thank you.
HOGAN, MS:   What we have issue with is the RDO and
FLYNN IM:   I understand.
HOGAN, MS:   Yes.
FLYNN IM:   You say that they should be set off against that, the - some other payments?
HOGAN, MS:   Yes ….

4 Transcript at pages 183-184.

5 Exhibit 8.

6 Transcript at page 75.

7 The circumstances of the creation of the Deferred Rostered Day Arrangement are detailed in the evidence of Mr Hlavaty and the witness statement of the First Respondent: see paragraphs 65 - 67 of the witness statement of Mr Hlavaty (exhibit 3) and, in the witness statement of the First Respondent (exhibit 8), the heading ‘rostered days off’.

8 Exhibit 8.

9 Exhibit 8.

10 Exhibit 3.

11 Paragraph 74, exhibit 3.

12 Paragraph 62, exhibit 3.

13 Clause 13 provides:
A rostered day off shall be taken as follows -

On the 4th Monday in each four week cycle, except where it falls on a public holiday, in which case the next working day shall be taken in lieu unless another alternate day in the current or next four week cycle is agreed in writing between the employer and the employee (or the Employer Associations and the Building Trades Association of Unions of Western Australia (Association of Workers) to be the rostered day off, or to coincide with the public holiday.

Provided that by agreement in writing between an employer and his employee(s), an alternate day in the four week cycle may be substituted for the fourth Monday as the day off paid as though worked, and where such agreement is reached all provisions of this Award shall apply as if such day was the prescribed fourth Monday.

14 The relevant evidence of the Second Respondent appears in her witness statement (exhibit 9), confirmed in her evidence at pages 181 – 182 transcript.

15 Exhibit 8:
At paragraph 13(xiii) - (xiv): ‘I recall letting Martin know Parkerville Plumbing offers a Completion Incentive Payment (TAFE Fees) to apprentices on the basis they aim to complete their 4 year training with Parkerville Plumbing…’
And at paragraph 15(i) - (ix) ‘I did not tell Martin Hlavaty …that Terri and I were happy to pay his TAFE fees if he passed each block of classes. …’

16 The evidence of Mr Hlavaty is at paragraphs of witness statement (exhibit 3) at paragraphs 18 – 23 and in cross-examination appears at pages 160 – 161.

17 See ‘MH2’ attached to exhibit 3. See also exhibit 4.

18 See Linkhill Pty Ltd v Director, Office of the Fair Work Building Industry Inspectorate [2015] FCAFC 99 where the Full Court of the Federal Court reviewed the law on setoff of above Award payments made by an employer. The review included an assessment of the decision of the WA Industrial Appeal Court (Anderson, Scott and Parker JJ) in James Turner Roofing Pty Ltd v Peters [2003] WASCA 28. The judgment of North and Bromberg JJ in Linkhill place emphasis on the following passage of the judgement of Anderson J from James Turner Roofing:

The payment of an amount as wages for hours worked in a period can be relied on by the employer in satisfaction of an award obligation to pay wages for that period whether in relation to wages for ordinary time, overtime, weekend penalty rates, holidays worked or any other like monetary entitlement under the award. This is so, whether the payment of the wages is made in contemplation of the obligations arising under the award or without regard for the award. However, if a payment is made expressly or impliedly to cover a particular obligation (whether for ordinary time, overtime, weekend penalty rates, fares, clothing or any other entitlement whether arising under the award or pursuant to the contract of employment) the payment cannot be claimed as a set off against monies payable to cover some other incident of employment. A payment made on account of say ordinary time worked cannot be used in discharge of an obligation arising on some other account such as a claim for overtime. Whether or not the payment was for a particular incident of employment will be a question of fact in every case [45].

19 For example, see s 6 of the Magistrates Court (Civil Proceedings) Act 2004 (WA).

20 The relevant TAFE records were admitted into evidence as exhibits 11, 12, 13 and 14.

21 Exhibit 12.

22 Exhibit 9 at page 2, amplified by oral evidence recorded in the transcript at page 205ff.

23 E.g. transcript at pages 79, 196; 206.

24 Exhibit 8 at pages 12-14.

25 Exhibit 8 at page 15.

26 Exhibit 8 at page 19.

27 The evidence of Mr Hlavaty in re-examination appears at page 167of the transcript.

28 The evidence of the Second Respondent in examination in chief appears at pages 207 – 210 of the transcript.

29 Exhibit 8 at pages 16 – 17.

30 Transcript at pages 54 – 74.

31 Exhibit 9 at pages 9 – 10.

32 Exhibit 8 at pages 44 – 45.

33 Exhibit 3 at paragraph 99 – 100.

34 Exhibit 3 at paragraph 108 – 125.

35 See exhibit 2, page 548 at row 109 ‘20 August 2014 has been treated as a rostered day off.’