Western Australian Industrial Relations Commission

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Commissioner Emmanuel gave an interpretation of a notification of change clause in the Roman Catholic Archbishop of Perth Teachers Enterprise Bargaining Agreement 2012

The Commission held that any change to hours of work will have a significant effect on employees.  However, for the change to trigger the consultation obligations under the agreement, it must be a ‘major change’.  Not every change that has a significant effect is a ‘major change’.  Whether the change is a major change will depend on the circumstances. 

The decision can be read here.

Commissioner Matthews upheld an employee’s claim for annual leave as a contractual entitlement. 

Before the claimant was employed by the respondent, he was employed by a company of which he was a director and the controlling mind. The claimant accrued annual leave while working for the company.  In November 2015 the company was sold to the respondent.  As part of the sale the respondent offered employment to the claimant.  If the offer of employment was accepted the claimant’s accrued annual leave balance would be transferred and the business’ sale price would be reduced accordingly.

The claimant accepted the offer of employment with the respondent.

The value of the annual leave balance was calculated according to the rate the seller (being the company of which the claimant was a director) said it paid its employee (being the claimant) with that rate being calculated as $40 per hour. The sale price was reduced on that basis.   

When the claimant’s employment with the respondent ended the claimant’s hourly rate was over $60. 

When the employment ended, the respondent paid out the employee’s annual leave partly at $40 per hour and partly at $60 per hour.  The employee said, according to his contract of employment with the respondent, the whole leave balance should be paid out at the higher rate.  The employer said that as a matter of fairness, the higher rate should not be applied to the whole balance because if it was, the respondent would have paid too much for the business.  The respondent also argued that this employee’s annual leave was a statutory entitlement, not a contractual entitlement. 

The Commission found that the employee’s annual leave entitlement was a contractual entitlement, and that ‘any untaken annual leave’ would be paid out at the final rate of pay regardless of the source of the leave.  Commissioner Matthews found the Commission did not have jurisdiction to deal with the respondent’s argument that the business was overpriced if the higher rate applied to the whole annual leave balance.  That argument lacked any ingredient of industrial relations and therefore was not within the Commission’s jurisdiction. 

The Commission ordered the respondent pay the employee $23,760.22 less tax. 

The decision can be read here.

Industrial Magistrate G Cicchini determined that an employee’s contract of employment did not prevent her from recovering pay for overtime and other entitlements under an award, even though the contract provided an annual salary in lieu of ‘any’ entitlements under ‘an’ award. 

The employee was covered by the Clerks – Private Sector Award 2010, which requires the employer to advise the employee, in writing, which provisions of the Award are ‘satisfied by payment of the annual salary.’  The employer argued that the contract of employment satisfied the Award requirement because it said ‘any’ provision of ‘an’ award is satisfied by the payment of an annual salary. 

His Honour found against the employer, noting that the contract did not specify ‘which of the provisions of’ the Award were satisfied by the annual salary; nor did it say which award was satisfied.  Therefore, the employee’s entitlement to overtime and other award entitlements were not excluded by her annual salary.  His Honour also noted that the contract created confusion by claiming to satisfy ‘any’ entitlements under ‘an’ award because not all award entitlements can be offset by an annual salary, and the contract attempted to do just that. 

His Honour noted that contracts must be clear, as required by clause 17.1(b) of the Award, so that employees can easily determine whether they are better off receiving an annual salary in lieu of the Award. 

The decision can be read here.

The Commission was recently required to determine whether regs 9 and 10 of the Public Sector Management (Redeployment and Redundancy) Regulations 2014 had been “fairly and properly applied” in relation to an employee who was notified of his formal designation as a redeployee following his return to work after an extended period of leave without pay.

The Senior Commissioner, in considering the terms of the statutory scheme in s 95 of the Public Sector Management Act 1994, when read with the Regulations, found there was no doubt the Department duly notified the employee by written notice that his position had been abolished, and that he may be transferred or registered in accordance with the Regulations. The Commission was satisfied that the Department paid due regard to the employee’s background skills and experience, in the context of his previous position with the Department, and considered his personal circumstances as best as they could be accommodated. It was accepted the Department also encouraged the employee to seek higher level positions.

The Commission found the Department afforded the employee a fair go, and the relevant provisions of the Regulations were fairly and properly applied.

Click here to read the decision.

The Commission has dismissed a sales manager’s claim for denied contractual entitlements in the sum of $221,081.44. The employee maintained it was an oral term of his employment contract that the company would sponsor him to work in Australia and pay the costs associated with obtaining permanent residency. The employer accepted it agreed to pay the costs associated with the transfer of the employee’s Temporary Business Visa, but did not agree to pay for his permanent residency costs.

The Senior Commissioner found that in the employee’s mind, any “sponsorship” of him in relation to his permanent residency necessarily meant the employer paying all of the costs associated with it. However, there was no direct evidence of an agreement to this effect, or that that was what the employer had in mind too. The Commission was not persuaded that it was a term of the employee’s contract of employment that the employer was responsible for all of his permanent residency costs.

The employee also maintained he was entitled to a bonus payment for the 2012, 2013 and 2014 financial years. In relation to the 2012 financial year, the employee claimed his contract was varied to incorporate the terms of an email from the Sales Director in relation to bonuses. The respondent submitted the bonus scheme was not included as a term of the contract, and was not accompanied by any form of consideration. In any event, it claimed the distribution of the bonus was subject to agreement between the Sales Director and/or Managing Director. It reserved to itself a discretion, which it exercised having regard to the overall health and profitability of the business. The Commission found there was no evidence that a distribution was agreed between the Sales Director and/or Managing Director. Accordingly, it was not persuaded that the employee had established an entitlement under the 2012 scheme.

In relation to the 2013 financial year, the employee maintained he specifically requested the inclusion of a bonus scheme in his new contract in May 2012. He submitted that in the absence of a new structure being agreed, the parties were bound by the 2012 bonus scheme. The employer submitted that in exercising its discretion, it decided not to make any bonus payments in the 2013 financial year. The Commission found there was no basis to conclude that the terms of the 2012 bonus scheme would simply carry over into the new contract of employment. It was not persuaded that the implication of the 2012 scheme would be necessary or reasonable for the effective operation of the contract for the employee’s new position. It noted that if the terms of the 2012 scheme could be said to have applied, its terms were not met in order to trigger any bonus payment entitlement.

The employee maintained a new scheme was introduced in the 2014 financial year, with the “trigger” points being the achievement of overall group budget, and the achievement of individual branch budgets. The employee submitted the Sales Director later varied the bonus scheme, such that the failure by the Victorian branch to reach its gross profit target would not be fatal to an entitlement to be paid a bonus. The respondent denied any such variation, and submitted the entitlement would not be triggered unless all of its areas of operation and branches in Victoria, Queensland and WA achieved their gross profit budget both individually and collectively. The Commission was not persuaded that the scheme was varied as contended. It found the requirements of the bonus scheme were crystal clear, and was not persuaded the employee established an entitlement to be paid a bonus.

Click here to read the decision.

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Western Australian Industrial Relations Commission
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