WESTERN AUSTRALIAN INDUSTRIAL MAGISTRATES COURT

CITATION : 2018 WAIRC 00700

DELIVERED : THURSDAY, 23 AUGUST 2018

FILE NO. : M 71 OF 2017

CLAIMANT

AND

California Pizza Kitchen (Pizza Australia ABN 89 609 127 013)

Respondent

CatchWords : INDUSTRIAL LAW – Small Claims Procedure – Interpretation of contract of employment providing for arbitration by the Western Australia Industrial Relations Commission before bringing case in a ‘superior court’ – Whether the Industrial Magistrates Court is a ‘superior court’ - Alleged contravention of Fair Work Act 2009 (Cth) provisions concerning: accrued annual leave, safety net contractual entitlements, National Employment Standards (maximum weekly hours) – Contract of employment providing for employer’s costs of training employee to be deducted from employee entitlements- Whether deduction ‘unreasonable in the circumstances’

Legislation : Fair Work Act 2009 (Cth)
Industrial Relations Act 1979 (WA)
Employment Dispute Resolution Act 2008 (WA)

Case(s) referred

to in reasons : Fitzgerald v Emerald Grain Pty Ltd [2017] WASC 206
Colin Sharrock v Downer EDI Mining Pty Ltd [2018] WAIRC 377
Sammut v AVM Holdings Pty Ltd [No2] [2012] WASC 27
Avenia v Railway & Transport Health Fund Ltd [2017] FCA 859
Australian Education Union v State of Victoria (Department of Education and Early Childhood Development) [2015] FCA 1196
AIPA v Jetstar Pty Ltd [2014 FCA 14
Matus v Australia Wide Computer Resources Pty Ltd & Anor (No.2) [2015] FCCA 2055
Association of Professional Engineers, Scientists and Managers, Australia v Wollongong Coal Limited [2014] FCA 878
Jones v Dunkel (1959) 101 CLR 298
Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55
Masterton Homes Pty Ltd v Palm Assets Pty Ltd [2009] NSWCA 234

Result : Claim proven in part

Representation:

Claimant : In person

Respondent : Ms H. Peard (director)

REASONS FOR DECISION

1          In February 2016, Jeremy Stanislaus (the claimant) was employed as a manager by Pizza Australia Pty Ltd (the Company) in connection with a new restaurant business that the Company planned to open later in the year. The Company had issued a letter of appointment to the claimant (the Appointment Letter) on 5 February 2016. On 19 February 2016, a ‘manager employment agreement’ (the Employment Agreement) and an acknowledgement regarding certain expenses while in the United States of America (the USA Expenses Acknowledgment) were each signed by the claimant and by a director of the Company. The claimant’s employment involved an initial period of eight weeks training in the USA. He then returned to Perth and prepared for the opening of the business. ‘California Pizza Kitchen’ opened on 21 September 2016. On 25 October 2016, the Company wrote to the claimant, advising of a decision to terminate his employment and stating that he would be paid one week’s salary in lieu of notice.

2          On 12 December 2016, the claimant sent an email to the Company alleging outstanding entitlements, in total $19,995, remained unpaid:

(1)     annual leave that had accrued to the claimant as at the end of his employment (Annual Leave Claim).

(2)     overtime of eight days during the period of training in the USA, as (allegedly) approved by a director of the Company, Mr Russell Hextall (USA Overtime Claim);

(3)     underpayment of his salary as provided in the Employment Agreement for a 10 week period commencing 9 May 2016 and ending 10 July 2016 (Underpayment Claim);

(4)     overtime of 13 days during the period before the restaurant opening as (allegedly) approved by Mr Hextall (Opening Overtime Claim); and

(5)     $120 per month telephone allowance for the period from 10 May 2016 as (allegedly) approved by Mr Hextall (Telephone Allowance Claim).

3          The claimant subsequently filed a claim in this court for the amount of $19,995 and repeated the five claims made in his email of 12 December 2016. Those claims will be referred to, collectively, as ‘the Five Claims’.

4          The Company’s response to the Five Claims, evident from a combination of the response1 and the case presented at the trial on 16 May 2018, is to:

(1)     admit the Annual Leave Claim;

(2)     dispute each of the other claims on the basis of an inconsistency between the claims and the contents of one or more of each of the Appointment Letter, the Employment Agreement and the USA Expenses Acknowledgement letter;

(3)     allege that the Company is entitled, under cl 15.7 of the Employment Agreement, to set-off against the Annual Leave Claim (and any other successful claims made by the claimant) the sum of $20,000 expenses incurred by the Company in training the claimant in the USA (the Training Expenses Set-Off).

The ‘conciliation, mediation and arbitration’ clause: must the claim be stayed pending a referral to the Western Australian Industrial Relations Commission?

5          Clause 17 of the Employment Agreement provides for conciliation, mediation and arbitration by the Western Australian Industrial Relations Commission (WAIRC) of any dispute that arises in relation to the Employment Agreement as provided for by the Employment Dispute Resolution Act 2008 (WA).2 At the commencement of the trial, the Company stated that it also relied upon cl 17 in answer to the Five Claims.3 The effect of cl 17 is that the claim in this court must be stayed pending the referral of the dispute at the initiative of the claimant or the Company to the WAIRC, if three criteria are all satisfied.

(1)     Firstly, the claim must concern ‘a dispute (that) has arisen in relation to’ the Employment Agreement. The Five Claims answer this description. Four of the claims arise directly in relation to the Employment Agreement: Annual Leave Claim; Underpayment Claim; Opening Overtime Claim and Telephone Allowance Claim. The USA Overtime Claim arises directly from the USA Expenses Acknowledgment. It was signed by the parties at the same time as the Employment Agreement. The USA Overtime Claim is based on alleged conversations with Mr Hextall after the Employment Agreement was signed. These facts, and the reference to ‘education and training expenses’ in cl 15.7 of the Employment Agreement creates a nexus between the USA Overtime Claim and the Employment Agreement such that the USA Overtime Claim has also ‘arisen in relation to the agreement’: Fitzgerald v Emerald Grain Pty Ltd [2017] WASC 206[49] per Martin CJ.

(2)     Secondly, the claimant must have given a written notice to the Company ‘specifying the details of the dispute and the requested resolution’. The email by the claimant of 12 December 2016 satisfies this requirement.

(3)     Thirdly, the claimant must have infringed the prohibition on ‘bringing an unresolved dispute to the superior courts (unless) the WAIRC is incapable of making a remedial order as provided under the Industrial Relations Act 1979 (WA) Part II Division 2.’ If the Industrial Magistrates Court is a ‘superior court’, then the claimant will have infringed this prohibition and his claim must be stayed. My view is that the reference to a ‘superior court’ in the Employment Agreement is not a reference to a court of the nature of the Industrial Magistrates Court. The claimant is not prohibited from bringing a claim in this court. At law, there is a well known distinction between ‘superior courts’ and ‘inferior courts’.4 The former are courts of general jurisdiction constituted by a judge (e.g. a Supreme Court, the Federal Court). The latter are courts whose jurisdiction is determined by statute (e.g. a Magistrates Court). The terms ‘superior court’ and ‘inferior court’ have, at least to lawyers, an accepted technical meaning. The text of cl 17, with references to ‘remedial orders’ and statutes favour this technical meaning as having been intended by the parties. In any event, the plain meaning of superior court would not be taken to be a reference to a court constituted by a Magistrate. On either view, the Industrial Magistrates Court, having a jurisdiction determined by the Industrial Relations Act 1979 (WA) and constituted by an Industrial Magistrate is not a superior court.

Jurisdiction of the Industrial Magistrates Court

6          The Company and the claimant are, respectively, a national system employer and a national system employee as defined in the Fair Work Act 2009 (Cth) (FW Act).5 The ‘small claims procedure’, set out in s 548 of the FW Act, applies to this claim.6 The effect of that provision on claims in this court were considered in Colin Sharrock v Downer EDI Mining Pty Ltd [2018] WAIRC 377 (Magistrate Scaddan). The claim will only succeed in this court to the extent that the claimant proves an entitlement to an amount that the Company was required to pay him:

(1)     under the FW Act (a FW Act Entitlement);

(2)     under a fair work instrument such as a modern award (e.g. Restaurant Industry Award 2010 [MA000119]); or

(3)     because of a ‘safety net contractual entitlement’ i.e. an entitlement under a contract of employment that relates to any of the subject matters identified in the FW Act concerning either the National Employment Standards or the terms of a modern award (a Safety Net Contractual Entitlement).7

It is convenient to consider the source (if any) of the claimant’s entitlement when considering, in turn, each of the Five Claims and, finally, the Training Expenses Set-Off.

7          Section 548(3) of the FW Act provides that in a small claims proceeding, ‘the court is not bound by any rules of evidence and procedure and may act in an informal manner’. Further, the court ‘may act without regard to legal forms and technicalities’. This provision must be read in light of the obligations upon a court called upon to exercise judicial power. A court can only make a finding on the basis of probative evidence and ‘a decision must be supported by a reasoned judgment that addresses the issues in the case.’8 In Sammut v AVM Holdings Pty Ltd [No2] [2012] WASC 27 [40] - [47], Commissioner Sleight examined a similarly worded provision regulating the conduct of proceedings of the State Administrative Tribunal in Western Australia and made the following observations (omitting citations) which I respectfully adopt:

(1)     The tribunal is not bound by the rules of evidence and may inform itself in such a manner as it thinks appropriate. This does not mean that the rules of evidence are to be ignored. After all, they represent the attempt made, through many generations, to evolve a method of enquiry best calculated to prevent error and elicit truth. No tribunal can, without grave danger of injustice, set them to one side and resort to methods of enquiry which necessarily advantage one party and necessarily disadvantage the opposing party. In other words, although rules of evidence, as such, do not bind, every attempt must be made to administer 'substantial justice'.

(2)     The more flexible procedure provided for does not justify decisions made without a basis in evidence having probative force. The drawing of an inference without evidence is an error of law. Similarly such error is shown when the tribunal bases its conclusion on its own view of a matter which requires evidence.

(3)     The tribunal can obtain information in any way it thinks best, always giving a fair opportunity to any party interested to meet that information; it is not obliged to obtain such independent opinion, for instance, upon oath, and whether the cross-examination shall take place upon that opinion is entirely a question for the discretion of the tribunal; it is not bound by any rules of evidence.

(4)     An essential ingredient of procedural fairness is the opportunity of presenting one's case. The right to cross-examination is viewed as an important feature of procedural fairness. Procedural fairness requires fairness in the particular circumstances of the case. While a right to cross-examination is not necessarily to be recognised in every case as an incident of the obligation to accord procedural fairness, the right to challenge by cross-examination a deponent whose evidence is adverse, in important respects, to the case a party wishes to present, is.

Annual Leave Claim

8          At the trial the Company stated (and the claimant agreed) that when his employment ended, the claimant had accrued 86.5380 hours of untaken paid annual leave. Annual leave entitlements of national system employees in the position of the claimant are provided for in s 87 and s 90 of the FW Act. Section 87 provides that four weeks of paid annual leave accrues progressively during each year of service. Section 90(2) states that ‘if, when the employment of an employee ends, the employee has a period of untaken paid annual leave, the employer must pay the employee the amount that would have been payable to the employee had the employee taken that period of leave’. In the claim filed in this court, the claimant made a claim for ‘annual leave as stated on my last pay sheet to be 2.8 weeks ($4,145.96)’. My view is that the claimant made an error when filing his claim. The reference to ‘2.8’ in the claimant 's last pay slip is not a reference to the weeks of accrued annual leave to date; it is a reference to the hours of annual leave accrued in the past week. I agree with the calculations of the Company that, at an hourly rate of $39.4872 (based on an annual income of $77,000 and 37.5 ordinary hours per week) and 86.5380 hours of untaken paid annual leave, the accrued annual leave entitlement of the claimant at the end of his employment was $3,417.14.

9          The Annual Leave Claim is a FW Act Entitlement. Subject to what is stated below regarding the Training Expenses Set-Off (see paragraph 35 – 41), there will be an order that the Company pay this amount to the claimant.

The Underpayment Claim

10       The Employment Agreement provides that the Company will pay the claimant a salary of $1,480.77 per week ($77,000 per annum). The claimant was paid this salary from 11 July 2016. The claimant was employed by the Company at premises in Malaga for a nine week period before 11 July 2016, from 9 May 2016 to 10 July 2016. His primary duties during this period involved making preparations necessary for the opening of California Pizza Kitchen. This included: converting USA recipes for use in Australia; assisting in kitchen design and decisions concerning the fit-out of California Pizza Kitchen premises; and dealing with potential suppliers. The claimant also performed tasks, when directed by Mr Hextall, that were not related to California Pizza Kitchen. Mr Hextall had an interest in a business known as ‘Little Cs’. In connection with Little Cs, the claimant performed the following tasks from time to time: preparing pizza dough, doing deliveries and ingredient shopping at markets. The claimant was paid a salary of $1,000 per week for his work during this nine week period. The claimant argues that he was entitled to be paid $1,480.77 per week salary as provided in the Employment Agreement for his work during this period. The Company disputes that the Employment Agreement applied to the claimant during this period.

11       In Avenia v Railway & Transport Health Fund Ltd [2017] FCA 859 [115] - [117], Lee J made the following apposite observations on 'ascertaining the rights and liabilities of the parties' to a contract of employment (omitting citations):

[T]he rights and liabilities under a contract are to be determined objectively, by reference to a textual as well as a contextual analysis (that is, by reference to the entire text of the contract as well as any contract or document referred to in the text) and purpose. Ordinarily, this process of construction is possible by reference to the contract alone but sometimes, where there is constructional choice, recourse to events, circumstances and things external to the contract is necessary (including the genesis of the transaction and the commercial background).

...

[T]he court is entitled to approach the task of construction on the basis that the parties intended to produce a contract that makes commercial sense, that is, a contract consistent with the commercial object of the agreement.

[W]here a transaction is implemented by two or more instruments or documents, they may be read together for the purpose of ascertaining their proper construction and legal effect, at least where the contracts or documents are executed contemporaneously or within a short period. ... [T]he rationale for this proposition is that [each document] 'is executed on the faith of all the others being executed also and is intended to speak only as part of the one transaction, and if one is seeking to make equities apply to the parties they must be equities arising out of the transaction as a whole'.

12       The relevant text of the Employment Agreement provides:

This Agreement is made on the 19th day of February 2016.

...

The Company has offered to employ the Manager on the terms contained in this Agreement.

The Manager has accepted the terms offered by the Company.

1. Definitions

In this Agreement, unless the context otherwise requires:

...

(d) Base Salary means the annual cash component of the Manager's remuneration as set out in Item 5 of Schedule 1; (Schedule 1 contains an item: 'annual salary (gross) $77,000').

…

(f) Duties means the duties described in Schedule 2; (Schedule 2 lists ‘General Duties’ and ‘Position Specific Duties’).

(q) Start Date means the date set out in Item 2 of Schedule 1 unless another date is agreed between the Company and the Manager. (Item 2 of Schedule 1 states, ‘TBC but at least one month prior to Restaurant Opening’).

...

3.2 Term

(a) This Agreement commences on the Start Date and continues until it is terminated in accordance with clause 15.

...

4. Manager's Role

(a) The Company employs the Manager in the position specified Item 1 of Schedule 1. (Item 1 of Schedule 1 states, ‘General Manager’).

(b) The Manager must carry out the Duties as set out in Schedule 2.

(c) The Manager must perform any work that the Company instructs the Manager to perform that is lawful and within the skill and capacity of the Manager to perform. (Schedule 2 lists ‘General Duties’ and ‘Position Specific Duties’).

...

7 Place of Work

The Manager's place of work will be at the principle place of business, namely, California Pizza Kitchen, Hillary's Boat Harbour, WA and at such other locations as the performance of the Duties and the business of the Company may reasonably require.

...

10.2 Base Salary

(a) The Company will pay the Base Salary ... according to the pay cycle specified in Item 5 of Schedule 1. (Schedule 1 contains an item: ‘electronic funds transfer weekly’.)

13       In my view, the ordinary meaning of the text of the Employment Agreement, when made on 19 February 2016, was reasonably clear. The rights and obligations of the parties to the Employment Agreement, including the obligation of the Company to commence paying the claimant a salary of $77,000 per annum, would commence on a date to be agreed between them but that date would be not later than one month prior to the date of the restaurant opening. This construction is consistent with the fact that, in February 2016, the date for the restaurant opening was unknown. The premises had been secured. However, a period of training in the USA was about to commence and further known and unknown contingencies would impact upon the likely opening date. The precise role of the claimant after the training period and before one month before opening, if any, was uncertain. The parties were free to negotiate on the role of the claimant and his pay during this period. In fact, the transaction unfolded in exactly this manner insofar as paying a salary of $77,000 was concerned. In response to a demand from the claimant, Mr Hextall agreed to commence paying a salary of $77,000 from 11 July 2016, a date earlier than one month prior to the restaurant opening date of 21 September 2016. Before 11 July 2016, the claimant performed tasks requested by the Company and accepted $1,000 per week in salary.

14       The claimant argues that, having assumed at least some of his duties set out in the Employment Agreement from 9 May 2016, the Company was required to pay the ‘Base Salary’ of $77,000 per annum from that date. I disagree. Assuming that some of the duties of the claimant after 9 May 2016 resembled some of the duties set out in the Employment Agreement, the ‘Start Date’ of the Employment Agreement was not determined by reference to the duties assumed by the claimant . The ‘Start Date’ was to be determined by agreement between the parties. Until there was an agreement, there was no obligation under the Employment Agreement to pay the Base Salary. If the Company did not accede to the demand made by the claimant to commence the Base Salary, he was free to cease working for the Company and not to return until 21 August 2016.

15       Understandably, the claimant feels aggrieved at the Company decision to continue to pay him the same ‘training’ salary of $1,000 per week from 9 May 2016, notwithstanding the change to the nature of his duties. He was no longer in training. He was making preparations for the opening of California Pizza Kitchen. However, the Employment Agreement had not commenced and the duties performed by the claimant in this period were not covered by any modern award. The only relevant obligation on the Company was to comply with the terms of a national minimum wage order: FW Act, s 293. The salary of $1,000 per week paid by the Company to the claimant was in excess of the 'national minimum wage' of $656.90 a week that applied during this nine week period.

16       For completeness I will note that if the claimant had been successful with his interpretation argument (contrary to my conclusion), an order in his favour would follow because his claim is for a ‘Safety Net Contractual Entitlement’. Section 12 of the FW Act contains a definition of ‘safety net contractual entitlement’ as meaning ‘an entitlement under a contract between an employee and an employer that relates to any of the subject matters described in, inter alia, s 139(1) of the FW Act (which deals with modern awards). The claim by the claimant is to an entitlement under a contract of employment, namely the Employment Agreement, and it relates to one of the subject matters described in s 139(1) of the FW Act. Specifically, s 139(1)(a) of the FW Act states that ‘a modern award may include terms about minimum wages. It is not necessary to engage the terms of a particular modern award to create a safety net contractual obligation’.9 Where the Employment Agreement provides, in effect, for a minimum wage of the claimant (i.e. $77,000 per annum) and this obligation is not inconsistent with any modern award that covers and applies to the claimant, the obligation becomes a Safety Net Contractual Entitlement.

The USA Overtime Claim

17       It is not in dispute that the USA Expenses Acknowledgement, signed by the claimant on 19 February 2016, accurately reflects an agreement between the claimant and the Company made on that day that the claimant would receive $1,000 per week for eight weeks of training in the USA. It is also not in dispute that the parties, by oral agreement, subsequently agreed that the Company would make a payment of $1,100 per week and that a weekly payment of this amount was made to the claimant over eight weeks, commencing 29 February 2016.

18       The claimant stated that the training occurred at a workplace between Monday and Sunday (seven days) in the first week and between Monday and Saturday (six days) in the following seven weeks. He said that he started at 7.00 am and that he finished between 3.30 pm and 5.00 pm. I note that the ‘franchise training schedule overview’ admitted into evidence shows a timetable of planned training for the claimant. It refers to: six days of training per week; shifts that were not to ‘exceed 10 hours’; ‘weekly hours cannot exceed 50 hours’ and study time of ‘approximately two hours per day’. It is not in dispute that, before travelling to the USA, the claimant understood that his training would be in accordance with this document. Also in attendance at the training were Mr Hextall and Ms Hannah Peard who were directors of the Company and named in the Employment Agreement as ‘reporting officers’.

19       The claimant stated that after two weeks of training (i.e. around 12 – 13 March 2016) he had a conversation with Mr Hextall in which it was agreed that the combined hours of training and study were unreasonably long. The claimant stated that Mr Hextall promised that, in the future, the Company would compensate the claimant by way of either ‘time in lieu’ or a payment, for each 6th day worked. The claimant stated that, upon returning to Australia, he made a demand upon Mr Hextall in April or May of 2016 for the Company to honour this promise and was told that once the funds were available to the Company, the claimant would be paid.10 The claim by the claimant for $1,600 is based on this promise and is calculated by reference to a daily rate of $200, being the ‘ordinary’ daily rate for five days at an agreed salary of $1,000, for each of the eight Saturdays that the claimant was required to attend for training.

20       Ms Peard agreed that the training involved attending a workplace for training on six days per week. However, she was not present during the conversation the claimant alleged that he had with Mr Hextall. The Company does not admit that Mr Hextall made the promise of an overtime payment as alleged by the claimant. The Company further asserts that the claimant cannot now be heard to deny either a written contract in the form of the USA Expenses Acknowledgement on the weekly salary or the contents of the franchise training schedule overview on the anticipated working hours.

21       The Company did not call Mr Hextall to give evidence of his version of the critical conversation alleged by the claimant. The omission was not explained by the Company. I am entitled to take that into account in deciding whether to accept the evidence of the claimant.11 The evidence of the claimant, on the content of his conversation with Mr Hextall, was cogent, plausible and uncontradicted. He readily conceded that, before travelling to the USA, he understood that he would attend to training for six days per week. He was prompted to raise the issue with Mr Hextall on finding that, combined with time spent on private study, he was occupied for 8.5 – 10 hours per day over six days i.e. 50 – 60 hours per week. Any errors in his evidence on other matters did not cause me to doubt the reliability of his evidence on his conversation with Mr Hextall. I am satisfied that the conversation took place in terms as stated by the claimant (and summarised above at paragraph 18).

22       It is true, as the Company asserted, that evidence of a conversation will not usually be admitted to contradict the terms of a written contract.12 However, there are exceptions to this rule of evidence. Evidence of oral conversations may be admitted on the question of whether a contract is wholly in writing, or partly written and partly oral.13 The claimant was unhappy about the hours he was required to spend at training and in private study. The demands upon him exceeded the maximum weekly hours provided for in the National Employment Standards (i.e. 38 hours plus reasonable additional hours): FW Act, s 62. The franchise training schedule overview cannot displace the standards contained in the FW Act. The dispute between the claimant and the Company was compromised with the result that the agreement with the Company was partly written and partly oral. It was partly oral insofar as the claimant became entitled, upon demand, to either ‘time in lieu’ or an additional payment of $200 for each 6th day worked in a week. The entitlement commenced with work done on the next Saturday after the weekend of 12 – 13 March 2016 and finished on Saturday 23 April 2016, i.e. six weeks. The claimant made the demand for payment in late April or early May of 2016. It was ignored. the claimant has proven a legal obligation upon the Company to make six payments of $200 to him, i.e. a total of $1,200.

23       For the same reasons set out above (at paragraph 16) and subject to what is stated below regarding the Training Expenses Set-Off there will be an order that the Company this amount to the claimant. The $1,200 is Safety Net Contractual Entitlement. Pursuant to s 12 of the FW Act, it is an entitlement under a contract between an employee and an employer that relates to any of the subject matters described in, inter alia, s 139(1) of the FW Act (which deals with modern awards). The contract of employment is the partly written and partly oral contract described above. The contract relates to two the subject matters described in s 139(1) of the FW Act. Specifically, s 139(1) of the FW Act states that ‘a modern award may include terms about minimum wages and overtime rates. It is not necessary to engage the terms of a particular modern award to create a safety net contractual obligation.14 Where the contract provides, in effect, for overtime of $200 per day and this obligation is not inconsistent with any modern award that covers and applies to the claimant, the obligation becomes a Safety Net Contractual Entitlement.

The Opening Overtime Claim

24       The claimant alleges that he worked every day (seven days per week) for a two and half month period before the opening of California Pizza Kitchen on 21 September 2016 and that Mr Hextall and Ms Peard, ‘both agreed that I would be paid out or [given] time off once things settled down’.15 When giving evidence on this issue, the claimant stated that Mr Hextall instructed him to record the weekend time being worked during this period on a second timesheet that was to be submitted to Mr Hextall for him to ‘sign and put in the file to reimburse’ the claimant.16 The claim by the claimant is based on this promise. It is for $3,849.75 and is based upon a daily rate of $296.15 for 13 days overtime worked in this period. The daily rate is calculated by reference to the Base Salary provided for in the Employment Agreement.

25       Ms Peard stated that she was unaware of the arrangement claimed by the claimant.17 She did not recall the claimant working long hours and she noted timesheets of the Company referred to the claimant showing ‘rostered day off’ for a number of days during the relevant period. The Company does not admit that Mr Hextall made the promise of extra payment as alleged by the claimant. The Company further asserts that the Employment Agreement itself provides a mechanism for resolving overtime claims. Clause 8 of the Employment Agreement concerns 'hours of work'. It provides that the Company may require the claimant to work ‘an average of up to 38 hours per week exclusive of an unpaid meal break’ and reasonable additional hours as may from time to time be reasonably required' (cl 8(a)). It also provides that where the manager is required to perform 'unreasonable additional hours of work, the manager will be permitted to take time off in lieu' (cl 8(b)).

26       I am satisfied that the claimant worked every day for a period before the opening of the restaurant. He was able to give cogent, plausible and detailed evidence of his activities in the period immediately before the restaurant opening. His explanation for why the Company timesheets record a ‘rostered day off’ is also plausible; Mr Hextall asked him to record and supply a ‘second’ timesheet. No witness was called by the Company to rebut, by direct evidence, that the claimant was not working on a given day.

27       I am not satisfied that Mr Hextall made a promise to the claimant that went further than restating the effect of cl 8(b) of the Employment Agreement. The evidence of the claimant is consistent with Mr Hextall promising that, in due course, the claimant would be permitted to take time off in lieu of unreasonable additional hours worked. I am not satisfied that Mr Hextall made a promise to the claimant to make a payment as compensation for unreasonable additional hours worked. The evidence of the claimant on the language used by Mr Hextall was equivocal (e.g. a promise to ‘reimburse’). In any event, such a promise would vary cl 8(b) and (c) and cl 20.2 of the Employment Agreement provides that any variation of the Employment Agreement is not effective unless in writing and signed by both parties. Clause 20.2 should be heeded in the absence of evidence of either a collateral contract an intention by the parties create a new agreement.

28       It may be accepted that, pursuant to cl 8(b) of the Employment Agreement, the claimant was entitled to take time off in lieu of the unreasonable additional hours worked by him in the period before the restaurant opening. The claimant did not have an opportunity to take any time off in lieu before his employment ended on 25 October 2016. It may be noted that the claimant was on leave for a period commencing 8 October 2018. The Employment Agreement does not expressly provide for any accrued right of the claimant to ‘time in lieu’ to be converted to overtime and paid upon termination of employment. I am not satisfied as to the criteria for implication of such a term. Such a term is not necessary to ensure the effectiveness of the Employment Agreement. In light of the contents of Clauses 8(b) and (c), I am not satisfied that such a term is ‘so obvious’ as to go ‘without saying’. The Company does not have an obligation under the Employment Agreement to convert any accrued ‘time in lieu’ to a payment to the claimant.

29       It should be noted that cl 8 of the Employment Agreement is inconsistent with National Employment Standards concerning maximum weekly hours insofar as the clause:

(1)     contrary to s 64(1) of the FW Act, would permit the ‘38 hour per week average’ to be calculated over a period that exceeds 26 weeks;

(2)     contrary to s 62(2) of the FW Act, would require the claimant to work additional hours in excess of 38 hours per week that are unreasonable.

30       Notwithstanding the inconsistency noted in the previous paragraph, this court cannot re-write the Employment Agreement to provide for an entitlement to paid overtime. However, the Company was required to observe the National Employment Standards concerning maximum weekly hours and comply with the terms of a national minimum wage order: FW Act, s 293 – 294. The result is that for each additional hour worked by the claimant in excess of hours that are reasonable, the claimant was entitled to be paid the minimum wage of $17.70 per hour. This equates to $134.52 per day. Having regard to the factors set out in s 62(3) of the FW Act, I am satisfied that it was unreasonable for the claimant to be required to work on each Sunday. The claimant gave evidence of working for seven days per week for two and half months. I infer that he worked on 10 Sundays with a resulting entitlement under the FW Act provisions concerning the national minimum wage order to $1,345.20. Subject to what is stated below regarding the Training Expenses Set-Off there will be an order that the Company this amount to the claimant.

The Telephone Allowance Claim

31       The claimant gave evidence of an oral agreement with Mr Hextall to the effect that, commencing 10 May 2016, the Company would pay the claimant’s mobile phone account in the amount of $120 per month.18 The claimant said that Mr Hextall accepted that the only practicable method of communicating with numerous suppliers to the Company was via the claimant’s personal mobile phone. The claim by the claimant is based on this promise.

32       Ms Peard stated that she was unaware of the promise by Mr Hextall as alleged by the claimant.19 She disputed the need for the claimant to use his mobile phone when he had access to either a landline at Malaga, phones at the restaurant or a free ‘app’ on his phone.

33       I repeat observations I made concerning the USA Overtime Claim: the Company did not call Mr Hextall to give evidence of his version of the critical conversation alleged by the claimant; the omission was not explained; I am entitled to infer that the evidence of Mr Hextall would not have helped the case of the Company;20 The evidence of the claimant was cogent and plausible. The claimant made arithmetic errors in the claim that he filed. He quickly resiled from his original claim for $2,880 and ultimately gave evidence suggesting a maximum entitlement of $120 per month from May 2016 - 26 October 2016, i.e. $660. The discrepancy between $2,880 and $660 is not insubstantial. Nevertheless, I am satisfied Mr Hextall made the promise to pay $120 per month as alleged by the claimant, at least a promise that continued from May 2016 until the restaurant opening on 21 September 2016. The claimant was resilient in cross-examination on the conditions in Malaga that prompted the conversation between him and Mr Hextall. The oral promise, made before the Employment Agreement commenced on 10 July 2016 (see paragraph 30 above), is not inconsistent with cl 10.3 of the same agreement which states that the Company will reimburse the claimant for sundry expenses incurred in the performance of his duties subject to expenditure in excess of $100 having prior approval of Mr Hextall or Ms Peard. The claim will succeed to the extent of four months, i.e. $480.

34       Subject to what is stated below regarding the Training Expenses Set-Off there will be an order that the Company this amount ($480) to the claimant. The $480 is a ‘Safety Net Contractual Entitlement’. Pursuant to s 12 of the FW Act, it is an entitlement under a contract between an employee and an employer that relates to any of the subject matters described in, inter alia, s 139(1) of the FW Act (which deals with modern awards). The relevant term of the contract of employment is wholly oral. The term relates to the subject matter described in s 139(1) of the FW Act. Specifically, s 139(1) of the FW Act states that ‘a modern award may include terms about ‘expenses incurred in the course of employment’.21

The Training Expenses Set-Off

35      I have concluded above that, subject to accepting the submissions of the Company on the Training Expenses Set-Off, the Company has an obligation to pay to the claimant (and the Court has the power to order payment of) the amount of $6,442.34, comprised of the following amounts:

• Annual Leave Claim: $3,417.14 as a FW Act Entitlement for accrued annual leave;
• USA Overtime Claim: $1,200 as a Safety Net Contractual Entitlement following a contractual promise regarding overtime;

• Opening Overtime Claim: $1,345.20 as a FW Act Entitlement for work on 10 Sundays;
• Telephone Allowance Claim: $480 as a Safety Net Contractual Entitlement following a contractual promise regarding mobile phone reimbursement.

36      The Company argues that if it has any liability to the claimant, it is entitled to rely upon cl 15.7 of the Employment Agreement to extinguish that liability. The clause states:

15.7 Reimbursement of Company Expenses

(a) The Company will incur expenses, (Company travel, education and training expenses) on the engagement of the Manager.

…

(d) If the Manager’s employment is terminated by the Company for any reason within 12 months of the Company incurring such expense, the Manager will reimburse the Company 50% of those expenses.

(e) The Manager authorizes the Company to deduct the amount of reimbursable expenses from any amount that would otherwise be payable to the Manager on termination of the Manager’s employment. Where the Manager and the Company enter into a separate written agreement in relation to reimbursable expenses, then, to the extent of any inconsistency, that agreement takes priority over the provisions of this clause.

37      Ms Peard stated, in effect, that the Company incurred expenses of $40,000 in training the claimant in the USA over an eight week period commencing on 29 February 2016. The Company relies upon cl 15.7(d) and (e) as authority to deduct up to 50% of that amount ($20,000) ‘from any amount that would otherwise be payable to the claimant on termination of his employment’. The Company did not adduce any written evidence of having incurred any expense. It relied upon the oral evidence of Ms Peard as proof of that expenditure. Ms Peard did not detail the components of total amount of $20,000. It may be noted that the Appointment Letter makes reference to training and states that, ‘while training the Company will provide flights, transport, accommodation and travel insurance’. Ms Peard did not give a breakdown of the expenses for each of those items.

38      In the course of the hearing I raised with representatives of the Company whether cl 15.7 permitted the recovery of training costs incurred before the ‘Start Date’ in the Employment Agreement. On reflection, I accept the submission of the Company that the Employment Agreement contemplates such an outcome. Clause 15.7 contemplates the recovery of expenses incurred ‘on the engagement’ of the Manager. This occurred in February 2016 and may be distinguished from the ‘Start Date’ of 11 July 2016 (explained above).

39      The effect of s 326(1) of the FW Act is that cl 15.7 of the Employment Agreement has no effect to the extent that it permits the Company to make a deduction that is for the benefit of the Company and is unreasonable in the circumstances. Clause 15.7 is for the benefit of the Company. The issue is whether the clause is ‘unreasonable in the circumstances’. The phrase was considered in Australian Education Union v State of Victoria (Department of Education and Early Childhood Development) [2015] FCA 1196 [176]ff and it is convenient to assess the evidence in this case by reference to the relevant factors identified in that case:

• ‘The ultimate purpose of the [provision] is to protect employees from practices that have the effect of denying them the benefit of the remuneration they have earned and are thus entitled to fully enjoy. A central consideration in assessing whether a deduction is unreasonable in the circumstances will be the extent to which the employee has gained the benefit of the deduction made from, or out of, his or her remuneration.’ The claimant, an experienced manager in the hospitality industry, received training in a particular system used in the business of the Company. The benefit of the training to him was negligible insofar as he was not likely to use the knowledge and skills acquired other than while working for the Company. Indeed, the Employment Agreement contains confidentiality and restraint of trade clauses.
• ‘The extent to which the employer has benefited will likely be relevant. It will be relevant to assess whether the employee has been taken advantage of in some way, with the result that part of the benefit of his or her remuneration has been lost to the employer.’ There is no suggestion that any director or employee of the Company ‘took advantage’ of the claimant in supplying training to him. However, I accept the observation of the claimant that the benefit to him of the training was limited compared to the cost of delivery in the USA. The claimant noted that the same training could have been delivered in Australia to him at significantly less cost.
• ‘The quality of the assent given by the employee will need to be considered.’ The claimant signed the Employment Agreement. He is taken to be aware of the contents. It is not clear whether he read cl 15.7. He was not cross-examined on the issue. The Appointment Letter refers to the Company meeting the costs of flights, transport, accommodation and travel insurance. It says nothing about any obligation to repay those costs.
• ‘Other circumstances which relate to the reasonableness of the transaction that authorised the deduction may also need to be examined. In that respect, the assessment will be forward looking. But, it should also examine the reasonableness of the deductions once made and, in that respect, the assessment can take the benefit of hindsight. The obligation to reimburse the Company arises under cl 15.7 if the Manager’s employment is terminated within 12 months of the Company incurring the expense. Training in the USA for a period of eight weeks would inevitably involve substantial expense when compared to the usual accrued entitlements of an employee who ceased work within that 12 month period. Indeed, as was the case of the claimant, the period between the ‘Start Date’, from which the Manager was paid the Base Salary and commenced to accrue entitlements, and a termination date was subject to the provisions of the Employment Agreement on the probationary period. In short, cl 15.7 admits of the possibility of a deduction for training expenses well in excess of accrued entitlements.

40      I have reached the conclusion, having regard to the factors set out in the previous paragraph, that cl 15.7 is ‘unreasonable in the circumstances’. This case may be distinguished from cases where employers have recovered the training costs associated with a portable qualification such as pilot training: AIPA v Jetstar Pty Ltd [2014 FCA 14. Any benefit that the claimant received from training was wholly disproportionate to the cost incurred by the Company.

41      For completeness, I note that the evidence adduced by the Company has failed to satisfy me as to the incurring of any expenses associated with training. No invoice or receipt was adduced in evidence. The contractual relationship, if any, between the Company and the training provider was not explained. It may be inferred that there were costs associated with the delivery of the training to the claimant. However, there is an evidential onus on the Company to explain the fact that it was the Company that incurred the expense in connection with a particular employee, namely, the claimant. The onus was not discharged.

42      In the result, there will be an order that Company pay to the claimant the amount of $6,442.34. I will hear from the parties on the issue of pre-judgement interest.

M FLYNN

INDUSTRIAL MAGISTRATE

1. Filed on 26 May 2017.

2. The Employment Dispute Resolution Act 2008 (WA) provides:

12. Referral agreements

 (1) Two or more parties may enter into an agreement in writing (a referral agreement) that a particular employment dispute, or employment disputes of a particular class, between the parties may be resolved by the IR Commission.

 (2) The parties to a referral agreement may be —

 (a) an employer or group of employers; or

 (b) an employee or group of employees; or

 (c) an organisation of employees; or

 (d) an organisation of employers.

 (3) The referral agreement may specify circumstances in which an individual is entitled to act on behalf of a group of employees or group of employers.

 (4) The referral agreement may specify the functions that may be performed by the IR Commission in relation to any employment dispute or class of employment dispute to which the referral agreement relates.

 (5) Without limiting subsection (4), the functions of the IR Commission may include any of the following —

 (a) mediating or conciliating the employment dispute;

 (b) arbitrating the employment dispute;

 (c) providing a remedy or other relief of the kind that may be provided under the IR Act Part II Division 2;

 (d) deciding any other issue or question arising in the employment dispute.

 (6) A referral agreement —

 (a) comes into force —

 (i) if a commencement date is specified in the agreement — on that date; or

 (ii) otherwise — on the date on which it is made;

  and

 (b) remains in force until —

 (i) if an expiry date is specified in the agreement but all the parties agree to withdraw from the agreement prior to that date — the date on which the parties agree to withdraw; or

 (ii) if an expiry date is specified in the agreement and subparagraph (i) does not apply — that expiry date; or

 (iii) otherwise — the third anniversary of the date on which the agreement came into force.

 (7) The expiry of a referral agreement does not affect a referral proceeding commenced under that agreement before the expiry.

 (8) A party cannot withdraw from a referral agreement without the agreement in writing of the other party or parties to the agreement.

13. Referral to IR Commission to perform certain functions in referral agreement

 (1) A party to a referral agreement, or a member of a group of employers or employees that is a party to a referral agreement, may refer an employment dispute to the IR Commission for the performance by the IR Commission of such functions as are specified in the referral agreement.

 (2) The referral must be in a form approved in writing by the Chief Commissioner.

 (3) A party who makes a referral can withdraw the referral at any time.

3.  17 DISPUTE RESOLUTION

17.1 Definitions

In this clause:

(a)         Notice means written notice given by the aggrieved Party specifying the details of the dispute and the requested resolution.

17.2 Process

(a)             If a dispute arises in relation to this Agreement, the aggrieved Party must provide written a Notice to the other Party.

(b)             If the dispute is not resolved by the Parties within 14 days after the Notice is given, the dispute is to be referred to the Western Australian Industrial Relations Commission (Commission) for conciliation, mediation and or arbitration in accordance with the Employment Dispute Resolution Act 2008 (WA).

(c)             The Parties consent to the dispute being dealt with in the manner referred to in this clause 17.

(d)             The Parties may only bring an unresolved dispute to the superior courts if the Commission is incapable of making a remedial order as provided under the Industrial Relations Act 1979 (WA) Part II Division 2. In such circumstances only, a Party may commence proceedings in a superior court, but only to obtain a remedial order that is unavailable to the Commission.

(e)             The Parties must each bear their own costs in any and all of the dispute resolution steps set out in this clause 17.

(f)              This clause 17 does not prevent any Party from obtaining any injunctive, declaratory or other interlocutory relief from a superior court which may be urgently required.

(g)             Despite any existence of a dispute, each Party must continue to perform their respective obligations under this Agreement.

4. See Halsbury’s Laws of Australia accessed online at 10 July 2017:[125-35] Superior and inferior courts
The paragraph below is current to 17 February 2017

Courts may be classified as either superior courts or inferior courts. Superior courts in Australia include the High Court, Federal Court and Family Court and the Supreme Court of every State and Territory.

All courts which are not superior courts are inferior courts. An inferior court may be made a superior court for the purpose of exercising prescribed jurisdiction.

Traditionally, superior courts are courts of unlimited jurisdiction. Under the federal judicial system in Australia, no court is strictly a court of general jurisdiction, which places some restriction upon superior courts in Australia.

5. FW Act, section 14

6. The claimant indicated in the claim itself that he wanted the procedure to apply. Section 548 of the FW Act provides:

548  Plaintiffs may choose small claims procedure

(1) Proceedings are to be dealt with as small claims proceedings under this section if:

(a) a person applies for an order (other than a pecuniary penalty order) under Division 2 from a magistrates court or the Federal Circuit Court; and

(b) the order relates to an amount referred to in subsection (1A); and

(c) the person indicates, in a manner prescribed by the regulations or by the rules of the court, that he or she wants the small claims procedure to apply to the proceedings.

(1A) The amounts are as follows:

(a) an amount that an employer was required to pay to, or on behalf of, an employee:

(i) under this Act or a fair work instrument; or

(ii) because of a safety net contractual entitlement; or

(iii) because of an entitlement of the employee arising under subsection 542(1);

(b) an amount that an outworker entity was required to pay to, or on behalf of, an outworker under a modern award.

Limits on award

(2) In small claims proceedings, the court may not award more than:

(a) $20,000; or

(b) if a higher amount is prescribed by the regulations—that higher amount.

Procedure

(3) In small claims proceedings, the court is not bound by any rules of evidence and procedure and may act:

(a) in an informal manner; and

(b) without regard to legal forms and technicalities.

(4) At any stage of the small claims proceedings, the court may amend the papers commencing the proceedings if sufficient notice is given to any party adversely affected by the amendment.

Legal representation

(5) A party to small claims proceedings may be represented in the proceedings by a lawyer only with the leave of the court.

(6) If the court grants leave for a party to the proceedings to be represented by a lawyer, the court may, if it considers appropriate, do so subject to conditions designed to ensure that no other party is unfairly disadvantaged.

(7) For the purposes of this section, a person is taken not to be represented by a lawyer if the lawyer is an employee or officer of the person.

Representation by an industrial association

(8) The regulations may provide for a party to small claims proceedings to be represented in the proceedings, in specified circumstances, by an official of an industrial association.

(9) However, if small claims proceedings are heard in a court of a State, the regulations may so provide only if the law of the State allows a party to be represented in that court in those circumstances by officials of bodies representing interests related to the matters in dispute.

(a) in an informal manner; and

(b) without regard to legal forms and technicalities.

(4) At any stage of the small claims proceedings, the court may amend the papers commencing the proceedings if sufficient notice is given to any party adversely affected by the amendment.

Legal representation

(5) A party to small claims proceedings may be represented in the proceedings by a lawyer only with the leave of the court.

(6) If the court grants leave for a party to the proceedings to be represented by a lawyer, the court may, if it considers appropriate, do so subject to conditions designed to ensure that no other party is unfairly disadvantaged.

(7) For the purposes of this section, a person is taken not to be represented by a lawyer if the lawyer is an employee or officer of the person.

Representation by an industrial association

(8) The regulations may provide for a party to small claims proceedings to be represented in the proceedings, in specified circumstances, by an official of an industrial association.

(9) However, if small claims proceedings are heard in a court of a State, the regulations may so provide only if the law of the State allows a party to be represented in that court in those circumstances by officials of bodies representing interests related to the matters in dispute.

7. Section 548(1A) makes reference to an application for an amount that an employer was required to pay to an employee ‘because of a safety net contractual entitlement’ and ‘because of an entitlement under subsection 542(1)’. Section 542(1) concerns ‘entitlements under contracts’ and provides that:

For the purposes of this Part, a safety net contractual entitlement of a national system employer or a national system employee, as in force from time to time, also has effect as an entitlement of the employer or employee under this Act.

Section 12 of the FW Act contains a definition of ‘safety net contractual entitlement’ as meaning:

safety net contractual entitlement means an entitlement under a contract between an employee and an employer that relates to any of the subject matters described in:

(a)       subsection 61(2) (which deals with the National Employment Standards); or

(b)       subsection 139(1) (which deals with modern awards).

Section 61(2) of the FW Act identifies minimum standards relating to the following matters: (a)  maximum weekly hours (Division 3); (b)  requests for flexible working arrangements (Division 4); (c)  parental leave and related entitlements (Division 5); (d)  annual leave (Division 6); (e)  personal/carer's leave and compassionate leave (Division 7); (f)  community service leave (Division 8); (g)  long service leave (Division 9); (h)  public holidays (Division 10); (i)  notice of termination and redundancy pay (Division 11); (j)  Fair Work Information Statement (Division 12).
Section 139(1) of the FW Act states that ‘a modern award may include terms about any of the following matters’: (a)  minimum wages (including wage rates for junior employees, employees with a disability and employees to whom training arrangements apply), and: (i)  skill-based classifications and career structures; and (ii)  incentive-based payments, piece rates and bonuses; (b)  type of employment, such as full-time employment, casual employment, regular part-time employment and shift work, and the facilitation of flexible working arrangements, particularly for employees with family responsibilities; (c)  arrangements for when work is performed, including hours of work, rostering, notice periods, rest breaks and variations to working hours; (d)  overtime rates; (e)  penalty rates, including for any of the following: (i)  employees working unsocial, irregular or unpredictable hours;  (ii)  employees working on weekends or public holidays; (iii)  shift workers; (f)  annualised wage arrangements that: (i)  have regard to the patterns of work in an occupation, industry or enterprise; and (ii)  provide an alternative to the separate payment of wages and other monetary entitlements; and (iii)  include appropriate safeguards to ensure that individual employees are not disadvantaged; (g)  allowances, including for any of the following: (i)  expenses incurred in the course of employment; (ii)  responsibilities or skills that are not taken into account in rates of pay; (iii)  disabilities associated with the performance of particular tasks or work in particular conditions or locations; (h)  leave, leave loadings and arrangements for taking leave; (i)  superannuation; (j)  procedures for consultation, representation and dispute settlement.

8. Matus v Australia Wide Computer Resources Pty Ltd & Anor (No.2) [2015] FCCA 2055 [18] per Nicholls J.

9. Association of Professional Engineers, Scientists and Managers, Australia v Wollongong Coal Limited [2014] FCA 878 [16]ff per Buchanan J:

Safety net contractual entitlements’ …[I]t is instructive to identify some respects in which federal industrial legislation (e.g. the FW Act) has moved into the area of contractual entitlements in a way unprecedented before the establishment of that legislation upon constitutional powers other than s 51(xxxv) (the conciliation and arbitration power) of the Constitution. The entitlements claimed in the present case are for incentive-based payments and bonuses. I use those particular terms for reasons which will appear shortly. Entitlements of that kind seem to be a ‘safety net contractual entitlement’ as defined by s 12 of the FW Act [safety net contractual entitlement  means an entitlement under a contract between an employee and an employer that relates to any of the subject matters described in: (a) subsection 61(2) (which deals with the National Employment Standards); or (b) subsection 139(1) (which deals with  modern awards )].. … It is clear that the FW Act contemplates that there may be contractual entitlements not inconsistent with, but in addition to, the [s 61(2) NES] minimum standards about those matters. …  Again, it is clear that the FW Act contemplates that there may be contractual entitlements not inconsistent with, but in addition to, the terms of any modern award  about those [s 139(1) modern award] subject matters.

However, neither the particular terms of a minimum standard, nor the necessity to engage the terms of a particular  modern award , are necessary to the existence of the statutory obligation which now exists to observe the terms of a safety net contractual obligation.

10. See the Transcript of the evidence of the claimant at page 26:

So when I asked Russell for payment for the extra work in the US, the sixth day - work and also some sort of back pay ‑ ‑ ‑

Yes?‑‑‑ ‑ ‑ ‑ ah, he said that, ah, he was in the process of getting, ah, extra - extra - extra finances, extra loans as such.

Yes?‑‑‑And this - and he kept on delaying any sort of payment.  And then he said that he was working on some fairly big loan that would help, ah, pay all of his bills.

11. In Jones v Dunkel (1959) 101 CLR 298 [321] – [322], Windeyer J observed that the failure of a party to call a relevant witness, if unexplained, may lead to an inference that evidence of the missing witness would not help the party’s case. The dual effect of the principle stated in Jones v Dunkel is summarised in Cross on Evidence as follows: First, unexplained failure by a party to give evidence, to call witnesses, to tender documents or other evidence or to produce particular material to an expert witness may (not must) in appropriate circumstances lead to an inference that the uncalled evidence or missing material would not have assisted that party’s case. The rule can operate against parties not bearing the burden of proof and parties which do bear it as well. The appropriate circumstances exist where it was within the power of the party to tender the evidence which was not tendered: the details of this condition, so far as elucidated by the cases, are considered below.…The significance to be attributed to the fact that a witness did not give evidence will in the end depend upon whether, in the circumstances, it is to be inferred that the reason why the witness was not called was because the party expected to call him feared to do so. … Secondly, the rule in Jones v Dunkel permits an inference that the untendered evidence would not have helped the party who failed to tender it. It entitles the trier of fact to take that into account in deciding whether to accept any particular evidence which relates to a matter on which the absent witness could have spoken... But the rule does not permit an inference that the untendered evidence would in fact have been damaging to the party not tendering it. The rule does not create any admission..

...And if the case of a party who fails to call a witness is otherwise proved, the inference that the absent witness would not assist the party’s case does not detract from the proof.

12. Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55; (2004) 218 CLR 471 [36].

13. Campbell JA (with whom Allsop P and Basten JA relevantly agreed) in Masterton Homes Pty Ltd v Palm Assets Pty Ltd [2009] NSWCA 234; (2009) 261 ALR 382 at [90] (citations omitted):

The principles that are applicable in deciding whether an agreement that parties have entered is one that is wholly in writing, or partly written and partly oral, include the following: (1) When there is a document that on its face appears to be a complete contract, that provides an evidentiary basis for inferring that the document contains the whole of the express contractual terms that bind the parties... (2) It is open to a party to prove that, even though there is a document that on its face appears to be a complete contract, the parties have agreed orally on terms additional to those contained in the writing... Conversely, it is open to a party to prove that the parties have orally agreed that a document should contain the whole of the terms agreed between them.... (3) The parol evidence rule applies only to contracts that are wholly in writing, and thus has no scope to operate until it has first been ascertained that the contract is wholly in writing... (4) Where a contract is partly written and partly oral, the terms of the contract are to be ascertained from the whole of the circumstances as a matter of fact... (5) In determining what are the terms of a contract that is partly written and partly oral, surrounding circumstances may be used as an aid to finding what the terms of the contract are.

14. Association of Professional Engineers, Scientists and Managers, Australia v Wollongong Coal Limited [2014] FCA 878 [16] ff per Buchanan J.

15. Quote is from the claim form filed 28 March 2017.

16. See the Transcript at pages 31-32:

All right.  So this - what you’ve just said might relate to - if you look at your claim, you’ve claimed for $3,849.75.  You’ve said that you were working for seven days a week for a period two to two and a half months before the opening on 21 September.  And you said that it was agreed that you would be paid out or you would be given time off in lieu?‑‑‑Yeah, so we - we were so much in - basically catch up or to do - to hit the deadline ‑ ‑ ‑

Yes?‑‑‑ ‑ ‑ ‑ so, ah, I know the chef also worked extra hours.

Yes?‑‑‑I was - I wasn’t sure what his arrangement was with Russell.  So with me he asked me to do a - a - a timesheet as per my roster.

Yes?‑‑‑And also another sheet I did with the extra work I did, which he signed off on. 

Okay.  So there were two timesheets?‑‑‑Yes.

Why was that?‑‑‑One was for the rostered hours, ah, I was supposed to do and one was for any extra, which he signed off and he kept in a file and then that was - I was to be reimbursed for that.

Okay.  Did you keep a copy of any of those documents?‑‑‑Ah, no I wasn’t given any.

So how do you - how - you say that you worked the equivalent of $3,849 during this period.  How do you calculate that?‑‑‑Ah, the two extra days per week for the last, ah, two and half months. 

Do you have any evidence that you worked on those days?  The - each Saturday and Sunday?  Is there anything that you have that tends to ‑ ‑ ‑?‑‑‑The only people that, ah, can back me up is some of the other workers that, um, on Sunday mornings they would come in to, ah - to do half‑day shift.  So they - they would see me there.  Obviously Sundays they wouldn’t but sometimes Russell would drop in on Sundays to - to do some office work.  I lived, ah, very close.  I was about 3 minutes’ drive away from this place.

Okay.  And how - what were your hours then on those week - on the Saturdays and the Sundays?  What hours did you work?‑‑‑I could come in almost anytime I wanted.  I could come in early morning if I wanted to.  But roughly it would be - or - or days’ work as in, you know, seven, eight hours a day. 

All right.  Okay?‑‑‑I mean don’t get me wrong, Russell and the Directors looked after us when we were in the US and dinners and they took us out everywhere.  And obviously when someone like Russell, we’ve gotten so close to him, you know, we were very close.  And, ah, I believe him to be a man of his word. 

All right?‑‑‑Also, your Honour, the - the phone usage as well.

We’ll come to that shortly?‑‑‑Okay.

I’m just coming back to the - you - effectively you said that there were two timesheets?‑‑‑Yeah, so I was asked to do one ‑ ‑ ‑

Okay?‑‑‑ ‑ ‑ ‑ as per my roster said.  So the roster said come in on Monday ‑ ‑ ‑

Yes?‑‑‑ ‑ ‑ ‑ ah, start at seven, finish at four or five ‑ ‑ ‑

Yes?‑‑‑ ‑ ‑ ‑ right?  One to - based on that and one was any extra work I did.  With - which mainly ‑ ‑ ‑

Well, what - yes ‑ ‑ ‑?‑‑‑ ‑ ‑ ‑ went to the two extra days I was doing - weekend work.

Why did you agree to do that?  Why did you agree to do two timesheets?‑‑‑Cos one would go to, ah, the pay - the payroll officer ‑ ‑ ‑

Yes?‑‑‑ ‑ ‑ ‑ that he would process to, and the other one he would sign and put in the file to - for - to reimburse me.

See also the Transcript at pages 53-54:

Yes?‑‑‑But my argument was I was doing a lot more ‑ ‑ ‑

Yes?‑‑‑ ‑ ‑ ‑ others.  So when I brought it up with Russell ‑ ‑ ‑

Yes?‑‑‑ ‑ ‑ ‑ he said do one to reflect what the roster says ‑ ‑ ‑

Yes?‑‑‑ ‑ ‑ ‑ was given to me.

Yes?‑‑‑And if I worked on the weekend or on my days off, or ‑ ‑ ‑

Yes?‑‑‑ ‑ ‑ ‑ extra hours to put it on another - on a sheet ‑ ‑ ‑

Okay?‑‑‑ ‑ ‑ ‑ where he would sign off on it.

Okay?‑‑‑This is only for the last probably two and a half months did I do, ah, basically work almost every day.

17. See the Transcript at page 66:

Um, again it’s the first I’ve heard of it and I don’t believe that to be accurate.

When Mr Stanislaus filed his claim he made a claim on the basis of working seven days a week for the period from July to September ‘16.  Did you - this is a matter for you to tell me what you did when you received that claim, but really for you to comment upon, is did - was that discussed with the Directors, whether or not that was authorised, that work?‑‑‑The seven days a week?

Yes?‑‑‑Um, there - I don’t believe there was substantial seven days a week.  As we can see from the timesheets there was often two rostered days off.  Um, when the hours required did step up as the restaurant was opening - and that’s when his pay was increased.

18. See the Transcript at page 43:

What did he agree to?   Ah, the - the amount that I’m claiming, the 120 per month.

19. Transcript at page 66:

So, um, there was no agreement to pay for phone usage with any of the Directors.  Um, the reason for this was that Jeremy was instructed to use the, um - the business - the landline phone at all times.  Um, also as we’ve discussed there’s a discrepancy between the amount calculated, um, where it should be $720, not 2,880, and Jeremy was also advised that when the restaurant phones were operational, um, he would be able to use those phones and the business phone app on his mobile, where all calls could be made.

Mr Stanislaus said he reached an agreement with Mr Hextall in relation to the phone?‑‑‑Mm hmm.

What did you want to say about that?‑‑‑Um, I - I’m not aware of that discussion.  Um, ah, that’s the first time hearing of it, to be honest.

20. In Jones v Dunkel (1959) 101 CLR 298 [321] – [322].

21. It is not necessary to engage the terms of a particular modern award to create a safety net contractual obligation: Association of Professional Engineers, Scientists and Managers, Australia v Wollongong Coal Limited [2014] FCA 878 [16]ff per Buchanan J.