Details  Created: 17 September 2020

The Industrial Magistrate has upheld a claim by a manager of a post office for untaken paid annual leave, but dismissed his claim for unpaid wages for his last week of employment on the basis that the Industrial Magistrate’s Court does not have jurisdiction to make such an order under the Fair Work Act 2009 (Cth) where the obligation to pay is contained in the contract of employment.

The claimant was employed as a permanent part-time manager of the respondent’s post office until his employment ceased on 29 October 2019. The claimant alleged that the respondent contravened the FW Act in failing to pay him:

1. Ordinary wages in full for work performed from 21 to 29 October 2019; and
2. Untaken paid annual leave following the termination of his employment.

Unpaid wages

The respondent agreed that the claimant was not paid for the hours worked between 21 to 29 October 2019. It argued, however, that it was entitled to withhold payment for the time worked because the claimant suddenly left his employment without notice.

Industrial Magistrate Scaddan rejected the respondent’s argument. Her Honour found that as the contract was silent on the parties’ obligations with respect to termination, the circumstances surrounding the claimant leaving his employment were irrelevant to the claim.  

However, her Honour found that although the respondent was not entitled to withhold wages for the period worked from 21 to 29 October 2019, absent the contract, there was no other industrial instrument or provision under the FW Act upon which the claimant could rely to establish a legal obligation for the respondent to pay the unpaid wages.

Her Honour concluded that the IMC does not have jurisdiction to make an order under the FW Act in respect of the claim for unpaid wages under the contract. Her Honour noted that the claimant may make a claim for denied contractual benefit or breach of common law in other forums.

Untaken paid annual leave

The respondent also agreed that the claimant did not take annual leave but argued that the claimant was overpaid during his employment.

Her Honour found that there was no way the respondent’s assertion of an ‘overpayment’ could be verified as there was no employment record of what monies were paid and for what purpose.

Her Honour found that, in any event, the respondent’s claim that the alleged ‘overpayment’ could set off any amount owed for untaken paid annual leave was flawed. Scaddan IM found that there was no correlation between the two payments to enable a claim for set-off and the character of the alleged overpayments were completely different to that of untaken paid annual leave.

Her Honour upheld the claimant’s claim for untaken paid annual leave and ordered that it be paid pursuant to s 90(2) of the FW Act.

The decision can be read here.