Western Australian Industrial Relations Commission

Employer cannot withhold wages in return for not pursuing police action

The Industrial Magistrate has upheld a claim for untaken paid annual leave and ordinary wages.

The claimant was employed as a pastry chef by the respondent from 25 February 2019 to 15 October 2019, when the claimant was summarily dismissed for serious misconduct.

He argued that the respondent contravened obligations to him created by the Food, Beverage and Tobacco Manufacturing Award 2010 (Cth) and the Fair Work Act 2009 in relation to untaken paid annual leave and ordinary wages for the month of October.

Annual leave

During the course of the hearing, the respondent admitted that it owed the claimant untaken paid annual leave. Industrial Magistrate Scaddan found that the admission was properly made as there was never any basis for the respondent to withhold annual leave upon the termination of the claimant’s employment.

Scaddan IM found that the respondent contravened the FW Act by failing to pay the claimant untaken paid annual leave.

Ordinary wages

The respondent withheld the whole of the claimant’s wages for the month of October because:

  • The claimant offered, and the respondent agreed, for the wages to be withheld and, as a result, the respondent would not ‘pursue’ a complaint to the police about the claimant stealing the respondent’s property; and
  • In the alternative, cl 18.1(d) of the Award enabled the respondent to deduct one week’s wages in lieu of the claimant’s failure to provide one weeks’ notice of termination.

Her Honour found that the respondent was not entitled to withhold the claimant’s wages for several reasons.

The respondent argued that the claimant did not provide notice of termination, although it said that the claimant had informed them that he had a job offer from Crown. Her Honour found that this merely evinced an intention to work at Crown in the future and did not mean the claimant was leaving the respondent’s employment.

Thereafter, consistent with the claimant continuing to attend work, her Honour found that the respondent summarily terminated the claimant’s employment on 15 October 2019. Ultimately, it was the respondent who terminated the employment and it was not entitled to deduct one week’s wages from the claimant pursuant to cl 18.1(d) of the Award.

Her Honour also noted that the contract of employment expressly required variation of its terms only by written agreement. Her Honour found that, as the agreement to forgo a police complaint in exchange for wages was an oral agreement made over the phone, there were no grounds for the respondent to withhold from the claimant’s wages under the contract.

Industrial Magistrate Scaddan also noted the ‘moral turpitude’ of the employer withholding wages in exchange for not ‘pursuing’ a police complaint about the claimant stealing the employer’s property. Her Honour observed that it is a dangerous course for an employer to attempt to dissuade a current or former employee from pursuing their legitimate legal interests by suggesting a detriment if they do.

The claim was upheld.

The decision can be read here.

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