2023 WAIRC 00231
CONTRACTUAL BENEFIT CLAIM
WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

CITATION : 2023 WAIRC 00231

CORAM
: COMMISSIONER T B WALKINGTON

HEARD
:
THURSDAY, 9 FEBRUARY 2023

DELIVERED : FRIDAY, 21 APRIL 2023

FILE NO. : B 80 OF 2022

BETWEEN
:
CAITLYN CHURCH
Applicant

AND

WILD SQUEEZE
Respondent

CatchWords : Contractual Benefits claim – salary – profit share – annual leave – entitlements – gift – casual – full-time employee – variation of contract
Legislation : Industrial Relations Act 1979 (WA)
Industrial Relations Commission Regulations 2005 (WA)
Result : Order issued
REPRESENTATION:

APPLICANT : MS C CHURCH
RESPONDENT : NO APPEARANCE


Case(s) referred to in reasons:
Belo Fisheries v Froggett (1983) 63 WAIG 2394
Benge & Anor v Bluescope Steel (AIS) Pty Ltd (No 2) [2020] FCCA 515
Hotcopper Australia Ltd v David Saab [2001] WAIRC 03827; (2001) 81 WAIG 2704
Matthews v Cool or Cosy Pty Ltd & Anor [2004] WASCA 114; (2004) 84 WAIG 2152
Perth Finishing College Pty Ltd v Watts (1989) 69 WAIG 2307
Simons v Business Computers International Pty Ltd (1985) 65 WAIG 2039
Waroona Contracting v Usher (1984) 64 WAIG 1500
Y.D. Hui & A.E Imam v Brian Edward Ravenscroft [2022] WAIRC 00728; (2022) 102 WAIG 1351


Reasons for Decision
1 Ms Caitlyn Church seeks an order from the Commission that her employer Wild Squeeze, pay her a benefit being unpaid salary. Ms Church also claims payment for a profit share arrangement and accrued annual leave.
The Respondent
2 Wild Squeeze is a partnership (ABN 60859797426) with the holders being S.E. Bower and L.E. Mule.
3 On 23 January 2023, in an email in response to a request from Ms Church to adjourn the hearing in this matter, Ms Bower advised that she had filed for bankruptcy:
I am currently awaiting my ITSA Bankruptcy number after final lodging.
For reference, I also note discrepancies of the total amount of debt claimed by Caitlyn Church. Caitlyn had amended/adjusted the payslips herself. This claim significantly differs than those supplied to her from the business.
There are no monies currently owed to Caitlyn, this was finalised last year. 
I will provide the Bankruptcy number once received. 
Kind Regards,
Sharona Bower
4 The hearing was adjourned. Wild Squeeze did not appear at the subsequent hearing, nor did Ms Bower provide any further information concerning the purported bankruptcy application.
5 As set out in Y.D. Hui & A.E Imam v Brian Edward Ravenscroft [2022] WAIRC 00728; (2022) 102 WAIG 1351 a partnership, unlike an incorporated company, is not a separate legal entity to the individual holders of the partnership [29]:
A partnership has no separate legal personality distinct from the individual partners who constitute it: Commissioner of State Taxation v Cyril Henschke [2010] HCA 43; (2010) 272 ALR 440 at [10] per French CJ, Gummow, Hayne, Heydon and Keifel JJ (citing Income Tax Commissioners for City of London v Gibbs [1942] AC 402; [1942] 1 All ER 415 and SJ Mackie Pty Ltd v Dalziell Medical Practice Pty Ltd [1989] 2 Qd R 87). Despite this, legal proceedings may be commenced or defended by a firm of partners, in the firm name, if the relevant rules of court provide for this. For example, the Rules of the Supreme Court 1971 (WA) O 71 r 13, provides that partners may sue or be sued in the name of the firm of which they are partners and an action against or by a firm in its name, includes all partners constituting the firm. The Federal Court Rules 2011 (Cth) rule 9.41 is along the same lines (see too Casino Picture Garden Co v Hewitt [1914] VLR 192). As to the advantages of this course, in Tobin v Dodd [2004] WASCA 288 Murray J at [49] observed:
Where partners of a firm are sued in their individual names, rather than in the firm name, the obligation is on the plaintiff to ascertain who were the individual members of the partnership at the date of the accrual of the cause of action and to sue them all in their own names - Harris v Beauchamp Bros [1893] 2 QB 534 at 536. The practical difficulties which this entails, not least of which are difficulties of service, could be overcome if the partners are sued in the firm name. Other advantages of suing in the firm name include the ability to enforce any ensuing judgment against partnership property - see Partnership Act 1895, s 28. As the appellant has sued some, but not all, of the partners in the firm at the date of the alleged breach of duty he may have to face these procedural difficulties and may even be forced to join all the partners before proceeding further with the action. This is because the liability of partners is joint - Partnership Act 1895, s 16 - and the consequent ability of those partners who have been joined in the action to apply to the court for an order staying the proceedings until all other persons so jointly liable with them are added as defendants - RSC O 18, r 4(3).
6 Wild Squeeze was duly notified in accordance with the provisions of the Industrial Relations Act 1979 (WA) (IR Act) and the Industrial Relations Commission Regulations 2005 (WA) of the application and the opportunity to provide a response. Wild Squeeze was duly notified of the convening of a conciliation conference, the scheduling of a direction hearings and the listing of the substantive hearing. Wild Squeeze did not file a response to the claim nor attend any proceedings or hearings notified to it. One of the partners, Ms Bower, communicated by email with Ms Church and the Commission. I am satisfied that Wild Squeeze was granted a reasonable opportunity to be heard and that this matter may be heard and determined in the absence of Wild Squeeze.
Background and Facts
7 Ms Church commenced work on 5 May 2021 as a barista with Wild Squeeze, a café located in Dwellingup.
8 Ms Bower decided to close the Dwellingup store on 18 January 2022 and establish a new café in South Yunderup. Ms Church and Ms Bower agreed that Ms Church would be promoted to Café Manager, be made full time and receive an increase in pay to $35.00 per hour from 18 January 2022. Ms Church was engaged in renovating and remodelling the new venue in South Yunderup. In March 2022 the South Yunderup café opened its operations.
9 Ms Church’s duties as Café Manager included hiring and managing staff, supervising staff, rostering staff, organising payslips, opening and closing the café, oversight of café operations and ensuring the café was tidy, serving and interacting with customers and purchasing supplies for the café. Ms Church would purchase supplies, provide the receipts to Ms Bower and then be reimbursed for these expenses.
10 On 18 April 2022 Ms Church spoke with Ms Bower and advised her that she would not attend work until her outstanding wages of $24,948.59 had been paid to her.
11 Subsequently Ms Church received $1,900.00.
12 On 20 April 2022 Ms Bower emailed Ms Church attaching the payslips for the hours Ms Church provided to Ms Bower on 18 April 2022. Ms Bower requested Ms Church advise her of the total monies outstanding for any purchases made on behalf of Wild Squeeze and provide the receipts.
13 On 18 May 2022 Ms Church responded to Ms Bower’s email of 20 April 2022 attaching all pay slips for the preceding three months and purchases, in a word document and screenshots of two bank statements as a record of the purchases made. The outstanding amounts are for $18,186.00 in unpaid wages, accrued leave entitlements and $6,726 in expenses incurred for purchases made on behalf of the café.
14 On 29 May 2022 Ms Church emailed Ms Bower advising that there had been six weeks without any payment and asking when she would be getting paid. Ms Bower responded that Ms Church would be paid half by the end of the week and the balance a couple of weeks later ‘or once alfresco grant is through’.
15 On 6 June 2022, Ms Church emailed Ms Bower advising that she had not received any payments and asking when the payments would be made to her account. Ms Bower responded on the same day informing Ms Church that ‘Yes we had delay with payment we were expecting Friday. As soon as received will forward to you’.
16 On 7 June 2022 Ms Church emailed Ms Bower seeking an update on the money or an estimate for when it would be received. Ms Bower responded on the same day stating ‘[n]ot as yet, waiting on reply. Will have something in your account by end of week either way. Will process other payment to your account as soon as it arrives if it’s in the meantime’.
17 On 13 June 2022 Ms Church attended the South Yunderup store to discuss payment arrangements.
18 On 19 June 2022, Ms Bower wrote to Ms Church referring to their discussions and noting that she had planned to deposit funds into Ms Church’s account tomorrow evening based on the income received over the weekend. In the letter Ms Bower describes the current financial situation and sets out that she will pay a minimum of $500.00 at this time and each subsequent fortnight. Additional payments would be made if there is extra that comes from Café sales. Ms Bower advised that once she had received money owed to her, she would pay any outstanding amount in a lump sum.
19 On 14 October 2022 Ms Church received a payment of $19,500.00.
20 Subsequently, Ms Church seeks an order from the Commission for unpaid wages.
The Question to be Determined
21 The task for the Commission is to find the terms of the employment contract and the notice period that ought to apply.
What are the Principles That Apply?
22 The jurisdiction to enquire into and deal with an industrial matter is conferred by s 23(1) of the IR Act to hear and determine a claim. Section 29(1)(b)(ii) of the IR Act provides standing to an employee to bring a claim concerning entitlements under a contract of employment: Matthews v Cool or Cosy Pty Ltd & Anor [2004] WASCA 114; (2004) 84 WAIG 2152.
23 The Full Bench in Simons v Business Computers International Pty Ltd (1985) 65 WAIG 2039, found that the jurisdiction of the Commission in matters pursuant to s 29(1)(b)(ii) of the IR Act is judicial:
The jurisdiction of the Commission which is founded by proceedings brought under section 29(b)(ii) of the Act is judicial. It is not arbitral or legislative. The Commission’s jurisdiction is thus limited to the ascertainment of existing rights by a determination of whether or not an employee has been denied a benefit, not being a benefit under an award or an order, to which the employee is entitled under a contract of service.
24 In Hotcopper Australia Ltd v David Saab [2001] WAIRC 03827; (2001) 81 WAIG 2704 (Hotcopper) Sharkey P set out the principles to be applied in matters concerning claims that a benefit under a contract has been denied [34]:
The limitations (and/or conditions precedent to the exercise of jurisdiction and/or power) include the following —
(a) The claim must relate to an “industrial matter”, as defined in s.7 of the Act.
(b) The claim must be made by an “employee”, as defined in s.7 of the Act.
(c) The benefit claimed must be a contractual benefit, i.e. the claimant must be entitled to the claim under his/her contract of service.
(d) The subject contract must be a contract of service.
(e) The benefit must not arise under an award or order of the Commission.
(f) The benefit must have been denied by the employer.
The Commission’s task in such matters is to discover and enforce the relevant contract of employment.
25 An applicant making an application pursuant to s 29(1)(b)(ii) of the IR Act (as it then was) must, therefore, establish that their claim is for a benefit to which he/she is entitled under his/her contract of employment. The Commission must determine the terms of the contract of employment and decide whether the claim constitutes a benefit which has been denied under this contract having regard to the obligations on the Commission to act according to equity, good conscience, and the substantial merits of the case (Belo Fisheries v Froggett (1983) 63 WAIG 2394; Waroona Contracting v Usher (1984) 64 WAIG 1500; Perth Finishing College Pty Ltd v Watts (1989) 69 WAIG 2307).
26 The meaning of ‘entitled’ in the context of the section must mean entitled as a matter of legal right, because it refers to benefits under the contract: Perth Finishing College Pty Ltd v Watts (1989) 69 WAIG 2307, 2313.
27 I find that the benefit for wages claimed relate to an industrial matter as defined by s 7 of the IR Act and they arise under the applicant’s employment contract. I find that Ms Church was an employee, and her claim for wages relates to industrial matters.
28 I find that the claim for unpaid wages has the necessary elements established in Hotcopper. There was an oral contract of employment between Ms Bower as the owner of Wild Squeeze and Ms Church as an employee and the terms provided for an entitlement to Ms Church for wages of $35.00 per hour, which is not a benefit arising under an award or order of the Commission. I find that the benefit of salary has been denied since 18 January 2022.
29 The email exchange between Ms Church and Ms Bower on 18 May 2022 indicates a difference of view concerning whether Ms Church was a casual employee or a full-time employee. At the hearing Ms Church’s evidence was that when she was promoted to the position of Café Manager, she became a full-time employee and entitled to annual leave. Ms Church was a credible witness. Ms Bower did not attend the hearing and there is no evidence before the Commission to contest Ms Church’s evidence. I find that Ms Church was a full-time employee.
30 I find that the evidence is that at the date Ms Church applied to the Commission, the denied benefit for wages was $18,186.00. Ms Church also claimed unpaid accrued annual leave of $1,432.27. Furthermore, Ms Church claimed $3,680.00 by way of reimbursement of expenses incurred on behalf of the business and $3,380.00 being the repayment of a personal loan from Ms Church to Ms Bower, both of which Ms Bower had not repaid. Subsequently, on 14 October 2022 Ms Bower transferred $19,500.00 to Ms Church: $11,005.00 for unpaid wages, $1,435.00 for unpaid accrued leave and $3,680.00 by way of reimbursement of expenses incurred on behalf of the business and $3,380.00 being the repayment of a personal loan from Ms Church to Ms Bower.
31 The payment of $11,005.00 for unpaid wages on 14 October 2022 results in a balance remaining of $7,181.00 in unpaid wages. The value of the denied contractual benefit is $7,181.00.
Profit Share - Principles of Variation of Contract
32 Ms Church also claims that she was promised a 10% share of the profits of the business which has not been paid.
33 In the second week of December 2021 Ms Bower presented Ms Church with a gift and a card. The card stated:


34 A variation of contract occurs when the original contract remains in force and only some of its terms are varied. Variation must be the subject of agreement between the parties and does not significantly alter the substance of the agreement or go to the ‘root of the contract’. A variation of contractual rights and obligations is however a contract and therefore, the variation must meet the requirements of a binding contract, including the presence of consideration.
35 In Benge v Bluescope Steel (AIS) Pty Ltd (No 2) [2020] FCCA 515 the Federal Circuit Court of Australia (FCCA) sets out the principles applying to variation of contracts:
[63] …It is clear law that a contract may be varied either expressly or by implication. As Ellicott J stated in Commonwealth of Australia v Crothall Hospital Services (Aust) Ltd (1981) 36 ALR 567 at 576 – 577 (with the agreement of Blackburn and Deane JJ):
It is open to the parties to a written contract to vary it. This may be done in writing or, except where the contract is required by law to be evidenced in writing, by oral agreement. The agreement to vary may be express or implied from conduct:…
[64] Likewise, in Moratic Pty Ltd v Gordon (2007) 13 BPR 24,713 at 24,719 [21] and 24,720 [24] Brereton J said:
[21] The terms of a contract may be varied by implied agreement arising from a course of dealing between the parties, and a party that seeks to rely on a term incorporated as a result of a course of dealing need not show that the other had actual knowledge of the term [Henry Kendall & Sons v William Lillico & Sons Ltd [1969] 2 AC 31 at 90, 104-105 and 130; Proprietors Strata Plan 30102 v Energy Australia (NSWCA, 29 September 1997, BC9704799, p 5], because the issue depends not on the actual subjective intentions of each party, but on what each was reasonably entitled to conclude from the attitude of the other [McCutcheon v David MacBrayne Ltd [1964] 1 WLR 125 (Lord Reid); Chattis Nominees Pty Ltd v Norman Ross Homeworks Pty Ltd (1992) 28 NSWLR 338 at 343-4 (Cohen J); Pondicil Pty Ltd v Tropical Reef Shipyard Pty Ltd (FedCA, Cooper J, 1994, BC9406064; Hardwick Game Farm v Suffolk Agricultural Poultry Producers Assn [1967] 1 WLR 287 (Lord Diplock)] … Moreover, contractual variation requires a mutual intention to vary the existing contractual terms, and consideration…
36 The Christmas gift from Ms Bower to Ms Church to provide her with a profit share arrangement does not have the necessary elements, as set out in Benge, to be found to be a variation of her contract of employment to include a term for a profit share arrangement. There is no evidence that the parties intended the profit share arrangement to be a variation to the contract of employment. The terms of the profit share arrangement are uncertain and it is not possible to ascertain from the evidence the time at which the calculation of the profit would be made nor the regularity and frequency of payment of the share. There is no evidence of the Café’s profit before the Commission.
37 For these reasons I cannot find that the profit share arrangement is a contractual benefit or entitlement that has been denied.
Conclusion
38 For the reasons set out above I find that Ms Church was initially denied a contractual benefit of salary of $18,186.00. I find that Ms Church has subsequently received $11,005.00 of the unpaid salary. I will order payment to Ms Church of the balance of $7,181.00.