Appeal against a decision of the Industrial Magistrate in Matter No. M 5 of 2015 given on 28 May 2015

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

FULL BENCH

CITATION : 2015 WAIRC 00918

DELIVERED : TUESDAY, 6 OCTOBER 2015

FILE NO. : FBA 7 OF 2015

Appellant

AND

Junghee Yoon

Respondent

ON APPEAL FROM:

Jurisdiction : Western Australian Industrial Magistrate's Court

Coram : Industrial Magistrate G Cicchini

Citation : [2015] WAIRC 00411; (2015) 95 WAIG 730

File No. : M 5 of 2015

CatchWords : Industrial Law (WA) - Appeal against decision made by Industrial Magistrate's Court - Finding respondent entitled to payment for pro-rata long service leave - Issue of construction of Long Service Leave Act 1958 (WA) - Whether respondent an employee for the purposes of the Long Service Leave Act on grounds respondent is entitled to, or eligible to become entitled to, long service leave under an industrial agreement that is at least equivalent to the entitlement to long service leave under the Long Service Leave Act - Appeal dismissed

Legislation : Industrial Relations Act 1979 (WA) s 84(2)

Long Service Leave Act 1958 (WA) s 4(3), s 5, s 6, pt III, s 8, s 8(2), s 8(2)(a), s 8(3), s 8(4), s 8(5), s 8(7), s 8(8), s 8(9), s 10 

Industrial Relations Legislation Amendment and Repeal Act 1995 (WA) s 46

Fair Work Act 2009 (Cth) pt 2‑2, s 113, s 113(1), s 113(3), s 113(3)(a)(i), s 113(3A)(a)

Industrial Arbitration Act 1912 (WA)

Workplace Agreements Act 1993 (WA) 

Interpretation Act 1984 (WA) s 3, s 3(1), s 10, s 32

Minimum Conditions of Employment Act 1993 (WA) s 2, s 5

Long Service Leave Act 1987 (SA)

Public Transport Authority Railway Employees (Transperth Train Operations) Industrial Agreement 2011 (WA) cl 6.6, cl 6.6.1, cl 6.6.5, cl 6.7 

Result : Appeal dismissed

Representation:

Counsel:

Appellant : Mr D J Matthews and with him Ms C M Rice

Respondent : Mr C A Fogliani

Solicitors:

Appellant : State Solicitor for Western Australia

Respondent : W G McNally Jones Staff

Case(s) referred to in reasons:

Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27

Amcor Ltd v CFMEU (2005) 222 CLR 241

Barns v Barns [2003] HCA 9; (2003) 214 CLR 169

Bropho v Western Australia [1990] HCA 24; (1990) 171 CLR 1

Bull v Attorney-General (NSW) (1913) 17 CLR 370

Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation (1981) 147 CLR 297

Cudby v Cockinos [2014] WASC 254

IW v City of Perth [1997] HCA 30; (1997) 191 CLR 1

Kingston v Keprose Pty Ltd (1987) 11 NSWLR 404

Maughan Thiem Auto Sales Pty Ltd v Cooper [2014] FCAFC 94; (2014) 244 IR 399

Nekros Pty Ltd v Baker [2006] WAIRC 05764; (2006) 86 WAIG 3361

Re Will and Estate of McComb [1999] 3 VR 485

Reasons for Decision

SMITH AP:

Introduction

1         This appeal is instituted under s 84(2) of the Industrial Relations Act 1979 (WA) (the IR Act).  The Public Transport Authority of Western Australia (the PTA) appeals a decision of the Industrial Magistrate's Court in M 5 of 2015 on grounds that the learned Industrial Magistrate erred in determining that Ms Junghee Yoon was an employee to whom the Long Service Leave Act 1958 (WA) (the LSL Act) applies and that Ms Yoon was entitled to a payment under s 8(3) of the LSL Act.

2         Ms Yoon was employed by the PTA from 28 May 2007 until 26 July 2014, when Ms Yoon resigned from her employment.  Ms Yoon's employment did not end because of misconduct or serious misconduct.

3         Ms Yoon was employed by the PTA continuously for more than seven years but less than 10 years.

4         At the time of Ms Yoon's resignation, she was employed in the classification of level 4 (passenger ticketing assistant).  Clause 6.6.5 of the Public Transport Authority Railway Employees (Transperth Train Operations) Industrial Agreement 2011 (the agreement) provides for pro-rata long service leave only in the limited circumstances contained in that clause.  None of the circumstances contained in cl 6.6.5 of the agreement were applicable to Ms Yoon.

5         The matter before the Industrial Magistrate turned on whether the provisions of the LSL Act were excluded by operation of s 4(3) of the LSL Act as Ms Yoon's entitlement to long service leave under the agreement provided an entitlement to long service leave that was more beneficial than, or at least equivalent to, the entitlement to long service leave under the LSL Act.

6         It is agreed that if Ms Yoon was an employee of the PTA for the purposes of the LSL Act, then she is entitled to a pro-rata long service leave entitlement of 6.17 weeks; or $6,108.82.  If Ms Yoon is not an employee for the purposes of the LSL Act, then she is not entitled to a pro-rata long service leave entitlement.

Relevant provisions of the Long Service Leave Act 1958 (WA)

7         Section 4(3) of the LSL Act provides as follows:

Where a person is, by virtue of — 

(a) an award or industrial agreement;

(b) an employer‑employee agreement under Part VID of the Industrial Relations Act 1979 or other agreement between the person and his employer; or

(c) an enactment of the State, the Commonwealth or of another State or Territory,

entitled to, or eligible to become entitled to, long service leave at least equivalent to the entitlement to long service leave under this Act, that person is not within the definition of 'employee' in subsection (1).

8         The Industrial Magistrate correctly identified the issue to be determined and that is whether Ms Yoon, by virtue of the agreement, was entitled to, or eligible to become entitled to, a long service leave entitlement which is at least equivalent to the entitlement to long service leave under the LSL Act.

9         The entitlements to long service leave or to payment in lieu thereof are set out in s 8 of the LSL Act which provides as follows:

(1) An employee is entitled in accordance with, and subject to, the provisions of this Act, to long service leave on ordinary pay in respect of continuous employment with one and the same employer, or with a person who, being a transmittee, is deemed pursuant to section 6(4) to be one and the same employer.

(2) An employee who has completed at least 10 years of such continuous employment, as is referred to in subsection (1), is entitled to an amount of long service leave as follows — 

(a) in respect of 10 years so completed, 8 2/3 weeks;

(b) in respect of each 5 years' continuous employment so completed after such 10 years, 4 1/3 weeks; and

(c) on the termination of the employee's employment — 

(i) by his death;

(ii) in any circumstances otherwise than by his employer for serious misconduct,

in respect of the number of years of such continuous employment completed since the employee last became entitled under this Act to an amount of long service leave, a proportionate amount on the basis of 8 2/3 weeks for 10 years of such continuous employment.

(3) Where an employee has completed at least 7 years of such continuous employment since the commencement thereof, but less than 10 years, and the employment is terminated — 

(a) by his death; or

(b) for any reason other than serious misconduct,

the amount of leave to which the employee is entitled shall be a proportionate amount on the basis of 8 2/3 weeks for 10 years of such continuous employment.

(4) If an employee has completed at least 9 but less than 15 years continuous employment prior to the commencement day, then, despite subsection (2)(a), the employee cannot take long service leave under subsection (2)(a) until after —

(a) if the employee has completed at least 14 years continuous employment prior to the commencement day — completing 15 years continuous employment; or

(b) in any other case — 12 months after the commencement day.

(5) Subsection (4) does not apply if the employee and his or her employer agree to that effect in writing.

(6) Subsection (4) does not apply in respect of a period of continuous employment prior to the commencement day in respect of which the employee has become entitled to take long service leave.

(7) An employee who becomes entitled to take long service leave under subsection (2)(a) in accordance with subsection (4) or (5) also becomes entitled to take long service leave under subsection (2)(b), in respect of the period of continuous employment that exceeds 10 years, pro rata.

(8) Subsection (7) does not apply to an employee if, before being granted the long service leave, the employee completes 15 years continuous employment.

(9) If an employee takes long service leave in accordance with subsection (7), the employee is entitled, after completing 15 years continuous employment, to take the remainder of his or her entitlement under subsection (2)(b) not already taken in accordance with subsection (7).

(10) In subsections (4) and (6) —

commencement day means the day on which the Labour Relations Legislation Amendment Act 2006 Part 7 Division 2 came into operation.

10      The entitlement to long service leave under the terms of the agreement arises under cl 6.6.  Clause 6.6 of the agreement provides as follows:

6.6.1 An employee shall be entitled to thirteen weeks paid long service leave on the completion of ten years continuous service and an additional thirteen weeks paid long service leave for each subsequent period of seven years of continuous service completed by the employee.

6.6.2 Where a public holiday falls within an employee's period of long service leave such day shall be deemed to be a portion of the long service leave and no other payment or benefit shall apply.

6.6.3 Long service leave may be taken in periods of 4 weeks or more, at a mutually agreed time.

6.6.4 Long service leave shall be paid at the employee's rate of pay as prescribed in the wages clause or as specified for rostered employees.

6.6.5 An employee will only be entitled to pro rata long service leave if his or her employment is terminated:

a) by the Employer for other than disciplinary reasons; or

b) due to the retirement of the employee on the grounds of ill health; or

c) due to the death of the employee, in which case the payment would be made to the employee's estate; or

d) due to employee's retirement at the age of 55 years or over, provided 12 months continuous service has been completed prior to the day from which the retirement takes effect; or

e) for the purpose of entering an Invitro Fertilisation Programme, provided the employee has completed three years service and produces written confirmation from an appropriate medical authority of the dates of involvement in the programme; or

f) due to employees resignation for pregnancy, provided the employee has completed more than three years and produces certification of such pregnancy and the expected date of birth from a legally qualified medical practitioner.

6.6.6 For the purposes of determining long service leave entitlement, the expression 'continuous service' includes any period during which the employee is absent on paid leave but does not include any period exceeding two continuous weeks during which the employee is absent on parental leave or leave without pay.

6.6.7 Continuity of service shall not be broken by the absence of the employee on any form of approved paid leave or by the standing down of an employee under the terms of this Agreement.

6.6.8 The employer may direct an employee to take a long service entitlement that has been accrued for more than 3 years.

6.6.9 Where an employee is directed to take long service leave entitlement, it will be taken within 12 months of the direction, at a time agreed between the employer and the employee.

6.6.10 Where a time cannot be agreed within the 12 month period, the employer will determine the date on which the employee will be required to start long service leave. Provided that the Employer shall give at least 30 days notice to the employee of the day on which the long service leave is to commence.

11      Employees covered by the terms of the agreement have an entitlement under the terms of the agreement to cash out accrued long service leave under cl 6.7 of the agreement.

12      Employees who are covered by the terms of the LSL Act also have an entitlement to, in effect, cash out an entitlement to long service leave.  Section 5 of the LSL Act provides as follows:

An employer and an employee may agree that the employee may forgo his entitlement to long service leave under this Act if — 

(a) the employee is given an adequate benefit in lieu of the entitlement; and

(b) the agreement is in writing.

13      Pursuant to s 10 of the LSL Act, an employer may by agreement with an employee allow an employee to take long service leave before the right thereto has accrued.  Where leave has been granted to an employee in such circumstances and the employee's employment terminates the employer may deduct from remuneration payable upon the termination of employment, such amount as represents payment for any period for which the employee has been granted long service leave, to which he or she was not at the date of termination of employment, or prior thereto, entitled.

Industrial Magistrate's reasons for decision

14      The Industrial Magistrate found that to ascertain whether the terms of the agreement are at least equivalent to the LSL Act required an analysis of the circumstances of the person applying for long service leave and by having regard to a particular person's entitlement when it was necessary to do so.  He found this was necessary as a particular person's entitlement will only crystallise once an applicable milestone is met.  In making these findings, the Industrial Magistrate found as follows:

(a) An objective analysis of whether 'on the whole', the terms of the agreement are at least equivalent to the LSL Act, is very difficult, if not impossible to achieve.

(b) The significance of the benefit provided by any particular provision will be dependent upon individual circumstances.  For some, it may be more important to reach the subsequent milestone in five years rather than seven years.  Others may not want to cash out their long service leave entitlement and therefore such an entitlement is of no particular benefit.  For others close to retirement age, reaching the pro-rata qualification will be of more importance than reaching the 10 year milestone which might be unachievable.

(c) Each benefit must be weighed against an employee's personal circumstances.  No attempt can be made to weigh up, as a whole, the entitlement under the agreement in comparison to the entitlement under the LSL Act.  The only practicable way equivalency can be determined is to weigh the competing applicable benefits relevant to the employee at the time that the milestone giving rise to the benefit is reached.  The requirement for equivalency in s 4(3) of the LSL Act is a beneficial provision which imports the setting of minimum standards for each particular benefit.

(d) The entitlement to long service leave is personal and is dependent upon individual circumstances.  On the event of a milestone being met or in contemplation of that happening, an assessment has to be made as to whether the particular entitlement to long service leave, under the applicable industrial agreement, is at least equivalent to that provided by the LSL Act.  It is only then that consideration must be given to whether a person is an employee for the purposes of the LSL Act or not.

(e) Given that industrial instruments, particularly industrial agreements, may be finite it will be impossible for employers to determine whether a person is an employee for the purposes of the LSL Act until it is necessary to do so.  That is, on or about the time that the milestone is met.  That process is neither unwieldy nor onerous.  Indeed, the employer can only assess each person's entitlement on a case-by-case basis.  An analysis or comparison at any other time will be practically impossible.

(f) It follows that if an employer has two employees, one may be an employee within the meaning of the LSL Act and the other may not, dependent upon their circumstances.  In the context of the agreement, if a person worked for more than seven years but less than 10 years, that person will be an employee within the meaning of the LSL Act, whereas, if the person worked more than 10 years they will not be an employee within the meaning of the LSL Act.

(g) The submission that the pro-rata provision in s 8(3) of the LSL Act should be read in the context of the less beneficial provisions as to the quantum of leave in s 8(2)(a) of the LSL Act is rejected.  The entitlement under s 8(3) of the LSL Act is a discrete benefit contextually different from s 8(2)(a) of the LSL Act.  There is no dependency between one provision and the other.  Indeed, there is no reason to consider the provisions together.

(h) When the circumstances of Ms Yoon are considered and the terms of the agreement, the pro-rata long service leave entitlement under the agreement is repugnant to, and not at least equivalent to, the entitlement to pro-rata long service leave under the LSL Act.  Thus, Ms Yoon was an employee for the purposes of the LSL Act and is eligible to receive a pro-rata long service leave entitlement of 6.17 weeks, valued at $6,108.82.

The PTA's submissions

15      The PTA makes a submission that whether a person is employed for the purposes of the LSL Act or not should be assessed by applying the following principles:

(a) the person is either an 'employee' for the purposes of the LSL Act or they are not and that status does not change if the provisions of the relevant industrial instrument applying to them do not change;

(b) the determination of whether a person is an employee for the purposes of the LSL Act or not, is to be undertaken at the time both the LSL Act and a relevant industrial instrument may apply;

(c) the test to be applied when conducting the comparison is whether the relevant industrial instrument provides for an entitlement to long service leave at least equivalent to the entitlement under the LSL Act (and where it does the person is not an employee for the purposes of the LSL Act); and

(d) it is possible and indeed necessary to compare the provisions of the LSL Act to the provisions of the relevant industrial instrument relating to long service leave to determine whether the entitlement to long service leave in the relevant industrial instrument is at least equivalent to that under the LSL Act.

16      The essence of the PTA's argument is that the comparison of the entitlements to long service leave required the court in this matter to determine whether the entitlement to long service leave under the agreement, on the whole, is at least equivalent to the LSL Act.  It says there is a single entitlement to long service leave and not entitlements to long service leave.  Further, it says that whilst a comparison is a 'line-by-line' comparison, to determine which on the whole is better, the LSL Act does not allow the mixing and matching of entitlements under an industrial instrument and the LSL Act.  That is, a person is either wholly within the provisions of the LSL Act or wholly outside the LSL Act.

17      The PTA also says that the assessment of entitlements is an objective assessment and cannot take into account a person's individual circumstances and does not take into account the subjective effect of the conclusion on the person in their individual circumstances.

18      Accordingly, the PTA submits that the learned Industrial Magistrate erred in holding that:

(a) a person's status under the LSL Act could change over time where there was no change to the provisions of the LSL Act or provisions relating to long service leave in the relevant industrial instrument;

(b) the comparison required by the LSL Act must be done from time to time for each particular employee during the course of their employment as and when 'milestones' are reached; and

(c) that it is 'very difficult if not impossible' to compare the entitlement to long service leave under the LSL Act to that under the industrial instrument relevant in this matter without regard to the particular circumstances of a particular employee as applying from time to time.

19      The PTA says that the comparison required by s 4(3) should take place for most people when their employment commences.  Thus, the comparison is to be done before any entitlements actually crystallise or accrue.  It says at this time, the entitlement under the LSL Act and the entitlement to long service leave under the relevant industrial instrument are to be compared and if that which persons are eligible to become entitled to under the industrial instrument is at least equivalent to that under the LSL Act, the industrial instrument applies to the exclusion of the LSL Act.

20      The relevant key to the interpretation of s 4(3) of the LSL Act is the term 'or eligible to become entitled to' long service leave.  The PTA says while the reference to 'entitled to' was obviously necessary as some persons would have already had an entitlement to long service leave under a relevant industrial instrument when s 4(3) was introduced in 1995 (by the Industrial Relations Legislation Amendment and Repeal Act 1995 (WA)), for those commencing employment after this time the term 'or eligible to become entitled to' had, and must be given, work to do.

21      The PTA argues that the error in the learned Industrial Magistrate's reasoning is that the comparison is to occur as and when milestones are met is revealed by the fact that, on this approach, the term 'or eligible to become entitled to' would never have any work to do.  It also says that much of the learned Industrial Magistrate's reasoning flows from his Honour's conclusion that it is 'very difficult if not impossible' to objectively compare the entitlement to long service leave under the LSL Act to that under a relevant industrial instrument.  For this reason, his Honour considered that there had to be a comparison when each milestone was reached.  The PTA also points out it is not clear from his Honour's reasoning as to whether he is referring to a milestone under the LSL Act or a relevant industrial instrument.

22      The PTA concedes that it may be difficult to compare the entitlement to long service leave under an industrial instrument to an entitlement under the LSL Act to determine equivalency.  However, such a comparison is required because the term 'or is eligible to become entitled to' requires it.

23      The result of the learned Industrial Magistrate's finding is that a person's status under the LSL Act may change over time without there being any change to the entitlement to long service leave under the LSL Act or relevant industrial instrument.  The PTA says that it is clear that such a consequence could not have been an intended result of the proper interpretation of the provisions of the LSL Act.  It says this is so given that Parliament must be taken to have been intending to introduce certainty in relation to the entitlement to long service leave for employers and employees, and those who represent employees in relation to negotiations for relevant industrial instruments.  In particular, it contends it is unlikely that Parliament intended to leave those parties in the position that they had to compare each entitlement as and when an entitlement under either the LSL Act or relevant industrial instrument was crystallised (what his Honour called 'milestones') to see whether a particular person, at a particular time, was an 'employee' for the purposes of the LSL Act or not.

24      By the use of the words in s 4(3) of the LSL Act 'or eligible to become entitled to', the intention of Parliament must have been that an objective analysis of the entitlement to the LSL Act and the entitlement to long service leave under a relevant industrial instrument is to be undertaken at the time both could potentially apply and a decision made whether a person is an employee under the LSL Act or not.

25      In support of its submissions, the PTA relies upon a recent decision of the Full Court of the Federal Court in Maughan Thiem Auto Sales Pty Ltd v Cooper [2014] FCAFC 94; (2014) 244 IR 399.  This decision only came to the attention of the PTA after the decision in this appeal was delivered by the learned Industrial Magistrate.

26      The question in Maughan Thiem was whether the employee was entitled to long service leave under a state Act.  The answer to the question turned on the construction of s 113 of the Fair Work Act 2009 (Cth) (FW Act) and in particular whether there were 'applicable award-derived long service leave terms' at the time the National Employment Standards commenced.  It was therefore relevant to decide what employees had been 'entitled to' under the relevant award at the time the National Employment Standards commenced.  The Full Court had to consider whether it was necessary, or not, for a provision to have crystallised before it could be considered an 'entitlement'.  The Full Court found the terms of the award would have entitled the employee to long service leave and not to an entitlement that would have actually accrued.  Thus, the Full Court rejected a construction that would have the result that whether a person was covered by an industrial instrument or an Act would change over time depending on whether a milestone under one or the other was met.

27      The PTA also argues that the history of the legislative regime of long service leave supports its construction of the effect of s 4(3) of the LSL Act.

28      It points out that there are two regimes for long service leave in Western Australia which are the legislative regime and the industrial regime.  It says that the two regimes operate side-by-side and either one or the other applies to employees, but not both.  Until 1995, the LSL Act provided that a person was not defined as an employee for the purposes of the LSL Act if and while the person was employed under the terms of an award or industrial agreement in force under the Industrial Arbitration Act 1912 (WA).  (The Industrial Arbitration Act was the predecessor to the IR Act.)

29      By 1995, Parliament had enacted legislation governing workplace agreements which were given primacy over awards by the enactment of the Workplace Agreements Act 1993 (WA).  Pursuant to s 46 of the Industrial Relations Legislation Amendment and Repeal Act s 4(3) of the LSL Act was enacted in substantially the same terms to the provision as it now stands, except that the reference of workplace agreements has been deleted and employer/employee agreements substituted.

30      Whilst the PTA concedes that the enactment of s 4(3) of the LSL Act is effectively a safety net, it says that Parliament was saying when it enacted the amendment to s 4(3) of the LSL Act in 1995 that if an award, industrial agreement or workplace agreement gives no entitlement to long service leave, or makes provision for long service leave that is inferior to that provided for by the LSL Act, then and only then the LSL Act will apply.  Thus, they say against that background, the notion of mixing and matching between the LSL Act and the industrial instrument to come up with the best compendium for an employee is clearly not an intended or sensible result.

Construction of the Long Service Leave Act 1958 (WA)

31      Justice Allanson in Cudby v Cockinos [2014] WASC 254 [18] recently considered the wise words of Lord Steyn in 'The Intractable Problem of The Interpretation of Legal Texts' (2003) 25(1) Sydney Law Review 5, 8 wherein his Lordship said:

Interpretation is not a science. It is an art. It is an exercise involving the making of choices between feasible interpretations.

32      This observation goes to the heart of this appeal.  The approach of the Industrial Magistrate in construing the operation of s 4(3) of the LSL Act is to require an assessment from time to time, throughout the currency of and at the cessation of employment, of a person's entitlement, or eligibility to an entitlement, to long service leave under the LSL Act and an industrial instrument.  The PTA says this construction of s 4(3) is wrong, that in the absence of any changes to entitlements under the LSL Act, an assessment is to be conducted by regard to whether objectively on the whole and without regard to personal circumstances a person is entitled or eligible to become entitled to long service leave under an industrial instrument that is at least equivalent to the entitlement of long service leave under the LSL Act.

33      It is well established that the point at which statutory construction should start is to ascertain the imputed purpose of Parliament:  Bropho v Western Australia [1990] HCA 24; (1990) 171 CLR 1, 20; Kingston v Keprose Pty Ltd (1987) 11 NSWLR 404, 421 - 424.  As Justice Allanson pointed out in Cudby [20] - [21]:

The task of statutory construction begins and ends with consideration of the text of the written law: Australian Finance Direct Ltd v Director of Consumer Affairs Victoria [2007] HCA 57; (2007) 234 CLR 96 [34]; Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55 [39]. A construction that promotes the purpose or object underlying a statute is to be preferred to one that would not promote that purpose or object (Interpretation Act 1984 (WA) s 18). But that cannot detract from the fundamental importance of the language used by the legislature. As Gageler and Keane JJ said in Taylor v The Owners - Strata Plan No 11564 [2014] HCA 9 [65]:

The constructional task remains throughout to expound the meaning of the statutory text, not to divine unexpressed legislative intention or to remedy perceived legislative inattention. Construction is not speculation, and it is not repair.

The meaning of any statutory provision must be determined 'by reference to the language of the instrument viewed as a whole': Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation [1981] HCA 26; (1981) 147 CLR 297 [23]; Project Blue Sky [69]. This requires close consideration of the text and structure of the provision, in the context of the Act as a whole, the general purpose and policy of the provision, and its consistency and fairness. Similar comments were made in Stevens v Kabushiki Kaisha Sony Computer Entertainment [2005] HCA 58; (2005) 224 CLR 193 [30].

34      The legislative purpose of the LSL Act is beneficial.  As a beneficial enactment its terms are to be given a liberal interpretation, so as to give the fullest relief which the fair meaning of its language will allow:  IW v City of Perth [1997] HCA 30; (1997) 191 CLR 1, 12; Barns v Barns [2003] HCA 9; (2003) 214 CLR 169 [42] - [44].

35      Thus, the LSL Act should be construed in a manner favourable to those whose benefit it applies to.  It is clear the LSL Act creates a scheme of a minimum safety net entitlement, or alternatively entitlements, to long service leave which are to apply to employees when the pre-conditions of service set out in the LSL Act are met.  Pursuant to the operation of s 4(3) of the LSL Act, the minimum entitlement or entitlements are ousted by the operation of an industrial instrument or an enactment of the state, Commonwealth or of another state or territory that entitles the person to, or provides for the person to become entitled to, long service leave at least equivalent to the entitlement to long service leave under the LSL Act.

36      Whilst s 10 of the Interpretation Act 1984 (WA) provides that in any written law words in the singular include the plural, whether there is one 'whole entitlement' to long service leave or a bundle of rights or entitlements to long service leave turns on a construction of the intention of the whole of the LSL Act:  s 3(1) of the Interpretation Act.

37      I am not persuaded that the history of the enactment of s 4(3) of the LSL Act reveals a statutory intention to establish two schemes that prohibit an assessment of a particular person's entitlements to long service leave by regard to the person's circumstances at different times and by regard to different events that trigger the fulfilment of specified conditions under the LSL Act and an industrial instrument.

38      Reliance on the scheme of agreements enacted by the Workplace Agreements Act does not assist the PTA's construction of s 4(3) of the LSL Act.  When the Workplace Agreements Act came into operation on 1 December 1993, the Minimum Conditions of Employment Act 1993 (WA) came into operation on the same day:  s 2 of the Minimum Conditions of Employment Act, Government Gazette No 160, 30 November 1993, p 6439.  Section 5 of the Minimum Conditions of Employment Act expressly contemplates 'mixing and matching' of conditions of employment that were in part (set out in a workplace agreement, or alternatively an award, or a contract of employment) and partly by operation of the Minimum Conditions of Employment Act.  Section 5 when first enacted in 1993 provided as follows:

(1) The minimum conditions of employment extend to and bind all employees and employers and are taken to be implied -

(a) in any workplace agreement;

(b) in any award; or

(c) if a contract of employment is not governed by a workplace agreement or an award, in that contract.

(2) A provision in, or condition of, a workplace agreement, an award or a contract of employment that is less favourable to the employee than a minimum condition of employment has no effect.

(3) A provision in, or condition of, an agreement or arrangement that purports to exclude the operation of this Act has no effect, but without prejudice to other provisions or conditions of the agreement or arrangement.

(4) A purported waiver of a right under this Act has no effect.

(5) This section has effect subject to sections 8 and 9 (1).

39      The appellant urges the Full Bench to adopt an interpretation of the words 'entitled to, or eligible to become entitled to' that applies the construction of a substantially similar phrase by the Full Court of the Federal Court in Maughan Thiem.  In that matter whether the respondent employee, Mr Cooper, was entitled to long service leave, turned upon the construction of s 113 of the FW Act.  Section 113(1) provides:

If there are applicable award‑derived long service leave terms (see subsection (3)) in relation to an employee, the employee is entitled to long service leave in accordance with those terms.

40      Section 113(3) defines 'applicable award-derived long service leave terms', in relation to an employee as:

(a) terms of an award, or a State reference transitional award, that (disregarding the effect of any instrument of a kind referred to in subsection (2)):

(i) would have applied to the employee at the test time (see subsection (3A)) if the employee had, at that time, been in his or her current circumstances of employment; and

(ii) would have entitled the employee to long service leave; and

(b) any terms of the award, or the State reference transitional award, that are ancillary or incidental to the terms referred to in paragraph (a).

41      Section 113(3A)(a) of the FW Act defines the 'test time' for the purpose of s 113(3)(a)(i) as immediately before the commencement of pt 2-2 of the FW Act.  Part 2 commenced on 1 January 2010.  Therefore, the 'test time' for the purposes of s 113 is 31 December 2009.  Justice Katzmann, with whom Greenwood and Besanko JJ agreed, found:

(a) An award, namely the Vehicle Industry - Repair Services and Retail - (Long Service Leave) Award 1977 containing a right to accrue long service leave applied to Mr Cooper immediately before pt 2-2 of the FW Act commenced (the test time).

(b) The terms of the award 'would have entitled' Mr Cooper to long service leave at the test time (31 December 2009) even though at that time Mr Cooper had not accrued any long service leave pursuant to the terms of the award.

(c) The Long Service Leave Act 1987 (SA) did not apply to Mr Cooper's long service leave claim.

42      Justice Katzmann found there were two conditions that had to be satisfied for there to be 'applicable award-derived long service leave terms' that applied to Mr Cooper.  At [40] - [45] her Honour found:

The first condition is that there is an award which would have applied to Mr Cooper at the test time if, at that time, he had been in his 'current circumstances of employment'. It was common ground that 'current circumstances of employment' referred to Mr Cooper's circumstances of employment just before his employment with Maughan ended (that being the relevant time for considering his long service leave entitlement).

The second condition is that the terms of the award 'would have entitled' Mr Cooper to long service leave. This was the subject of the dispute. So what is meant by 'terms of an award ... that ... would have entitled'?

The language here is awkward, the meaning ambiguous. On one possible interpretation the phrase refers to terms that provide for an entitlement to long service leave. Alternatively, as Mr Cooper argued, it may refer to an entitlement that would have actually accrued.

In my view, the first interpretation is to be preferred. The second condition in s 113(3)(a) is satisfied if, at the test time, the employee would have had a right to long service leave under a relevant award (that is, an award satisfying the first condition in s 113(3)(a)), irrespective of whether at that time the employee would have accrued long service leave. If there was a federal long service leave award or terms in a federal award that provided for the payment of long service leave that would have applied to the employee at the test time, then they continue to apply. If not, then the State or Territory Act applied. If, under the terms of the award, Mr Cooper was not eligible for long service leave at the time of his redundancy, s 113 does not give him an entitlement under the State Act.

When regard is had to the legislative context and purpose, Mr Cooper's construction of s 113 is untenable. If it were to be accepted, there would be 'applicable award-derived long service leave terms' in relation to an employee at the point at which an employee had worked sufficient years to accrue long service leave under the relevant award. From that point onwards, the award would govern the employee's long service leave, but before that point, the employee's long service leave would be governed by the State or Territory Act. This cannot be what Parliament intended. As Maughan submitted, s 113 is a transitional provision that is designed to preserve the effect of long service leave terms in awards as they stood before the commencement of the National Employment Standards.

The industrial magistrate said (at [47]) that on the construction for which Maughan contended, the provision in s 113(3)(a)(ii) would be redundant: 'a superfluous restatement of s 113(3)(a)(i)'. I respectfully disagree. Paragraph (a)(i) says nothing about long service leave. It is concerned with whether there was an award in place at the relevant time that would have applied to the employee. Paragraph (a)(ii) is concerned with whether that award includes an entitlement to long service leave. The two paragraphs must be read together.

43      Her Honour was of the opinion that the words 'would have entitled' were not only awkward, and the meaning ambiguous but it is apparent that those words were capable of two interpretations.  Thus, one interpretation of those words is that 'would have entitled' refer to terms that provide for an entitlement to long service leave.  The other interpretation is those words only refer to an entitlement that would have actually accrued.

44      Whilst the reasoning in Maughan Thiem may be highly persuasive, interpretation of the words 'entitled to, or eligible to become entitled to' of the LSL Act requires a consideration of these words by regard not only to the words but the whole of the text of s 4(3) of the LSL Act and the LSL Act as a whole.

45      In my opinion, the reasoning in Maughan Thiem is distinguishable.  Unlike s 113 of the FW Act, s 4(3) of the LSL Act does not set a time at which an assessment of an entitlement should be made.  More importantly, no assessment of or comparison of entitlements under an award and the South Australian Long Service Leave Act is required by the operation of s 113 of the FW Act.

46      An entitlement under the LSL Act is something which someone has a right to:  Nekros Pty Ltd v Baker [2006] WAIRC 05764; (2006) 86 WAIG 3361 [28] (Ritter AP), [90] - [92] (Kenner C).

47      The requirement of being 'entitled to, or eligible to become entitled to' cannot be read in isolation from the condition that the entitlement to long service leave under an industrial instrument be at least equivalent to the entitlement under the LSL Act.

48      If the use of the words being 'entitled to' are construed as an existing or actual entitlement and 'eligible to become entitled to' as an entitlement that can accrue if the conditions for eligibility are met, it is not material when an assessment is made of a person's entitlement under an industrial instrument and the LSL Act, as at any one time an entitlement to long service leave is capable of being characterised as actual or contingent.  I use the word 'contingent' in the sense of an eligibility to become entitled to long service leave if the conditions specified for accrual are met.  An actual entitlement is an entitlement that has vested, or to use the language used by the learned Industrial Magistrate, where a 'milestone' has been met which has the effect that the condition or conditions for accrual have been met.

49      For example, if a person, who is an 'employee' for the purposes of the LSL Act, resigns after completion of 10 years' continuous employment, on resignation, the entitlement to payment of 8⅔ weeks as pay for long service leave vests as an actual entitlement.  If the person contemplates resignation after seven years' continuous employment, then they can be said to be eligible to become entitled to payment of pro-rata long service leave under s 8(3) of the LSL Act, if they resign.  Also, at the commencement of employment this person could be said to be eligible for this entitlement which will vest in seven years providing their employment is continuous employment within the meaning of s 6 of the LSL Act.

50      It is apparent from the provisions of the LSL Act that 'long service leave' is comprised of a bundle of entitlements, or put another way as a bundle of rights to long service leave which can accrue in varying circumstances.  As such it cannot be said that there is a singular or indivisible entitlement or right to long service leave.

51      Leaving aside some of the conditions affecting the entitlement to long service leave such as the circumstances pursuant to which employment will be deemed continuous employment in s 6 of the LSL Act, these entitlements are as follows:

(a) an entitlement to accrue 8⅔ weeks' long service leave after completion of 10 years' continuous employment on termination of employment:  s 8(2);

(b) an entitlement to 4⅓ weeks for each five years' continuous employment completed after 10 years' continuous employment;

(c) on termination of employment an entitlement to pro-rata of 8⅔ weeks for 10 years, for each year of continuous employment completed after 10 years' continuous service by death or otherwise than by his or her employer for serious misconduct;

(d) an entitlement to a proportion of 8⅔ weeks' pro-rata long service leave after seven years' continuous employment on termination of employment by death or for any reason other than serious misconduct:  s 8(3);

(e) an entitlement to take a proportion of 13 weeks' long service leave after 14 years' continuous service:  s 8(4);

(f) by agreement between the employer and employee an entitlement to take 8⅔ weeks' long service leave after completion of 10 years' continuous service:  s 8(5) and s 8(7);

(g) an entitlement to take 13 weeks' long service leave and any accrued pro-rata long service leave after 15 years' continuous service:  s 8(2), s 8(8) and s 8(9).

52      This construction of the intention of the whole of the LSL Act, being to provide for a bundle of minimum standards of rights to long service leave, is consistent with the heading of pt III of the LSL Act which states 'Entitlements to long service leave or to payment in lieu thereof'.  Pursuant to s 3 and s 32 of the Interpretation Act unless inconsistent with the intention of the whole of an Act, the headings of the parts of an Act form part of the written law.

53      Section 8 of the LSL Act starts with a legislative presumption that an employee has, subject to the provisions of the LSL Act, an entitlement to long service leave under the LSL Act.  Section 4(3) renders the entitlement to long service leave inoperative where the conditions set out in s 4(3) apply.

54      In this matter, it is clear that s 4(3) of the LSL Act requires a comparison of the entitlement or entitlements to long service leave under cl 6.6 of the agreement and the LSL Act.  Just as the LSL Act creates a bundle of rights or entitlements to long service leave, so too does cl 6.6 of the agreement.  These are as follows:

(a) 13 weeks' long service leave on the completion of 10 years' service:  cl 6.6.1;

(b) pro-rata long service leave (cl 6.6.5):

(i) on death after any period of continuous service;

(ii) on termination of employment by the employer for other than disciplinary reasons after any period of continuous service;

(iii) on retirement at the age of 55 or over after a period of 12 months' continuous service;

(iv) to enter Invitro Fertilisation Programme after a period of three years' continuous service;

(v) on resignation for pregnancy after a period of three years' continuous service.

55      On commencement of employment a person who is a woman of child bearing age would be eligible to become entitled to each of the entitlements in (a) and (b) of [54] of these reasons.  Whether any of these entitlements would vest as actual entitlements or rights would depend upon the person's circumstances, including not only length of continuous service, their gender in the case of (b)(v) and perhaps (b)(iv) and their age in the case of (b)(iii).

56      Other variables that would require comparison are an assessment of what constitutes 'continuous employment' under s 6 of the LSL Act (which is not the same as 'continuous service' under cl 6.6 of the agreement) and what counts as a period of employment under s 6 of the LSL Act and cl 6.6 of the agreement.  An assessment of these variables, however, is not material when regard is had to Ms Yoon's circumstances in this appeal.

57      Without regard to the circumstances of a person no assessment can be made as to whether a particular person is entitled to, or eligible to become entitled to, long service leave under an industrial instrument that is at least equivalent to the entitlement under the LSL Act.

58      For example, a male person whose age is 30 at the commencement of employment engaged by the PTA for a fixed term for a period of seven years in a classification to which the agreement applies, would at the expiry of the contract by effluxion of time have no entitlement to pro-rata long service leave under the agreement.  Nor is it likely that they could be said to be eligible to become entitled to long service leave under the agreement at the commencement of the fixed term contract.  In these circumstances, pursuant to s 4(3) of the LSL Act, at all material times that person would be an employee for the purposes of the LSL Act.

59      The issue whether a male employee employed on a permanent basis who is 30 at the commencement of their employment may or may not be an employee for the purposes of the LSL Act, depends upon the circumstances of when the conditions triggering a right or entitlement to long service leave arises.  At the commencement of their employment they are eligible to become entitled to 13 weeks' long service leave after 10 years' continuous service under the agreement.  However, if they choose to resign at the age of 39 after nine years' service they cease to be eligible to become entitled to long service leave, or pro-rata long service leave under the agreement unless they die or their employment is terminated for reasons other than discipline.  In those circumstances, on one of those events, they become entitled to payment of pro-rata long service leave under the agreement.  If the person in question dies, their estate is entitled to payment of pro-rata long service leave under the agreement as the pro-rata entitlement under the agreement is greater than the entitlement under s 8(3) of the LSL Act.  However, if those events do not occur at the point where the employee has been continuously employed for a period of nine years, the employee in question is an employee within the definition of 'employee' under the LSL Act and is entitled to payment of pro-rata long service leave as provided for in s 8(3) of the LSL Act.

60      The test to be applied pursuant to s 4(3) of the LSL Act, in this matter, required an assessment of whether:

(a) there is an industrial instrument that applies to Ms Yoon that provides for long service leave as a condition of employment;

(b) Ms Yoon is entitled to or eligible to become entitled to long service leave under the industrial instrument; and

(c) the entitlement to long service leave under the industrial instrument is at least equivalent to the entitlement to long service leave under the LSL Act.

61      It is not in dispute that the answer to the first question is, 'Yes'.  The agreement provided that Ms Yoon was eligible to become entitled to long service leave whilst she was an employee of the PTA provided she met the conditions for accrual.  At the time of termination of her employment she had not met any of the conditions required by the terms of cl 6.6 of the agreement for accrual of long service leave.

62      Thus, in circumstances where Ms Yoon on the termination of her employment had no accrued or contingent entitlement to long service leave under the agreement but had satisfied the pre-conditions for accrual of and payment of pro-rata long service leave under s 8(3) of the LSL Act, it cannot be said that she had any entitlement to long service leave that was at least equivalent to the entitlement to long service leave under the LSL Act.

63      For these reasons, the appeal should be dismissed as I am of the opinion the learned Industrial Magistrate did not err in determining that Ms Yoon was an employee to whom the LSL Act applies and that she was entitled to a payment under s 8(3) of the LSL Act.

BEECH CC:

64      I have read in advance the reasons for decision of her Honour the Acting President and agree that the appeal should be dismissed.  Section 4(3) of the Long Service Leave Act (the LSL Act) has been set out in the reasons for decision of her Honour the Acting President and I need not repeat it here.  In order to determine whether Ms Yoon is by virtue of the industrial agreement entitled to, or eligible to become entitled to, long service leave at least equivalent to the entitlement to long service leave under the Act, it is necessary to establish what is the entitlement to long service leave under the Act.  Once there is an entitlement to long service leave under the Act, s 4(3) requires an investigation whether a person is entitled to, or eligible to become entitled to, long service leave at least equivalent by virtue of the industrial agreement. 

65      Contrary to the submissions of the PTA in this appeal, this does not involve an objective comparison to determine whether, on the whole, the agreement is at least equivalent to the LSL Act.  The language of s 4(3) of the Act does not require such an approach. 

66      Section 4(3) commences by referring to 'a person'.  It concludes by saying that where a person is entitled to, or eligible to become entitled to, long service leave under an award, agreement, employer-employee agreement or an enactment that is at least equivalent to the entitlement under the LSL Act, it is that person who is not within the definition of 'employee' under the LSL Act.  This suggests that the determination to be made is in relation to individual circumstances rather than by comparing the entitlements as a whole. 

67      Section 4(3) also refers to where a person is ‘entitled to, or eligible to become entitled to’, long service leave under an award, agreement, employer-employee agreement or an enactment, but does not refer an eligibility to become entitled to long service leave under the LSL Act.  In relation to the LSL Act, s 4(3) does not use the words 'or eligible to become entitled to'.  The comparison required by s 4(3) is not of an entitlement or eligibility to become entitled under an award, agreement, employer-employee agreement or an enactment and an entitlement or eligibility to become entitled under the LSL Act; it is between:

- an entitlement or eligibility to become entitled under an award, agreement, employer-employee agreement or an enactment; and

- an entitlement under the LSL Act.

68      This, in my view, also suggests that the determination is not made by comparing the entitlements under an award, agreement, employer-employee agreement or an enactment as a whole with the entitlements under the LSL Act as a whole. 

69      In order to see whether a person is entitled to, or eligible to become entitled to, long service leave under an award, agreement, employer-employee agreement or an enactment at least equivalent to the entitlement under the Act, it is necessary to determine what the person’s entitlement is under the Act.  When that is answered, one then asks whether a person is entitled to, or eligible to become entitled to, long service leave under an award, agreement, employer-employee agreement or an enactment at least equivalent to that entitlement.

70      Thus, under s 8(2), an employee who has completed at least 10 years' continuous employment is entitled in respect of 10 years so completed, 8⅔ weeks of long service leave.  At that time, the employee will have under the agreement, an entitlement to long service leave at least equivalent to that entitlement, namely 13 weeks of long service leave.  Accordingly, the entitlement under the LSL Act does not apply to the employee and the source of the employee's entitlement to long service leave is the agreement. 

71      Under s 8(2)(b) of the LSL Act, when an employee completes a further five years' continuous service, making a total of 15 years, the employee becomes entitled to a further 4⅓ weeks' long service leave under the LSL Act.  At that time, the employee will not have an equivalent entitlement under the industrial agreement, however, under the industrial agreement the employee is eligible to become entitled to long service leave at least equivalent to that entitlement, namely 13 weeks' long service leave after a further two years' continuous service.  Accordingly, when an employee completes a further five years' continuous service the entitlement under the LSL Act does not apply to that employee. 

72      Under s 8(2)(c) of the LSL Act, on the termination of the employee's employment, whether by death or in any circumstances otherwise than by his employer for serious misconduct, the employee is entitled to an amount of long service leave calculated with regard to the number of years of continuous employment completed since the employee last became entitled under the Act.  At that time, whether the employee is entitled, or eligible to become entitled, to long service leave under the industrial agreement that is at least equivalent to the entitlement in s 8(2)(c) of the Act needs to be determined.  Given that the employee's employment has terminated, the employee either has an entitlement under the industrial agreement or not – the employee is not going to be eligible to become entitled to long service leave under the agreement at some future time because the continuous service has come to an end. 

73      Similarly, under s 8(3) of the LSL Act, where an employee has completed at least seven years, but less than 10 years, of continuous service, and the employment is terminated by the employee's death or for any reason other than serious misconduct, there is an entitlement to long service leave which is a proportionate amount on the basis of 8⅔ weeks for 10 years of such continuous service.  By s 9(2) of the LSL Act, in a case to which s 8(2)(c), or s 8(3) applies, the employee is deemed to have been entitled to, and to have commenced leave, immediately prior to the termination.  The LSL Act makes provision for the manner in which payment equivalent to the amount which would have been payable in respect of the period of leave is made.  Where s 8(3) of the LSL Act applies, it will be a matter of fact whether at that time there is an entitlement to long service leave under the agreement that is at least equivalent to the entitlement to long service leave under s 8(2)(c), or s 8(3) of the LSL Act. 

74      It is not an objective comparison to determine whether, on the whole, long service leave entitlements under the agreement are at least equivalent to the entitlements to long service leave under the Act.  Section 4(3) of the LSL Act does not, in its language, require such a comparison to be made.  Neither does the language support the view that Parliament would have intended that an evaluation, on the whole, is to be made by an employer at the commencement of an employee's employment whether long service leave entitlements to long service leave under an applicable agreement are at least equivalent to the entitlements under the LSL Act. 

75      It follows in my view, that the learned Industrial Magistrate was correct in rejecting the view of the appellant in this matter.  When Ms Yoon’s employment terminated, she had more than seven years', but less than 10 years', continuous service with the appellant.  Her employment terminated in circumstances other than serious misconduct.  She had an entitlement to long service leave under the LSL Act.  As a matter of fact, at that time there was no corresponding entitlement to long service leave under the agreement.  Nor was she eligible under the industrial agreement to become entitled to long service leave at least equivalent at some future time because her service had ended.  Accordingly, she was an employee as defined under the LSL Act, and in my view his Honour was correct to so hold. 

KENNER C:

76      The issue arising on the present appeal is a relatively narrow one of statutory interpretation.  In the proceedings at first instance the learned Industrial Magistrate found that the respondent was an employee for the purposes of s 4(3) of the Long Service Leave Act 1958 (WA) and was eligible to receive pro rata long service leave, despite not being entitled to that benefit under the industrial agreement covering her employment.  The ultimate question for resolution before the Industrial Magistrate's Court was whether the respondent was "entitled to, or eligible to become entitled to, long service leave" under the industrial agreement "at least equivalent to the entitlement to long service leave" under the LSL Act.  If so, the respondent was not covered by the LSL Act.

77      The learned Industrial Magistrate rejected the appellant's primary contention that on its proper construction, s 4(3) of the LSL Act requires a "holistic" comparison between the long service leave entitlements, objectively considered in total, under the relevant industrial agreement, compared to those under the LSL Act.  This, according to the appellant, should be assessed logically, at the time of an employee's commencement in employment.  Rather, the Court concluded that the time at which such an assessment is made, is when the specific entitlement of an employee to leave accrues, held by the learned Industrial Magistrate to be the relevant "milestone" giving rise to the benefit of leave.  Thus, the assessment is one having regard to the individual circumstances of the employee, at the time the benefit accrues.

78      The appellant now appeals against the decision of the Industrial Magistrate's Court.  The one ground of appeal is that the learned Industrial Magistrate was wrong to conclude that the respondent was covered by the LSL Act.  A number of particulars of the ground of appeal are set out, which essentially take issue with those of his Honour's findings and conclusions, which were contrary to the appellant's argument put at first instance.

79      In a nutshell, the appellant contended on this appeal that an employee is either within the scope of the LSL Act for the purposes of long service leave benefits or they are not.  An employee's status, as being either covered by the LSL Act or a relevant industrial instrument, does not vary during the course of an employee's period of employment.  Having regard to the language of s 4(3) of the LSL Act, emphasis should be placed on the words "or eligible to become entitled to", in support of the proposition that if the learned Industrial Magistrate's reasoning is correct, these words would have no work to do because it is only when an entitlement actually accrues, in accordance with an individual's personal circumstances, that the relevant comparison between the entitlements is made.  The appellant contended that this proposition is not correct.

80      The appellant complained that the effect of the decision at first instance is that an employee could effectively oscillate between being covered by the LSL Act and the relevant industrial instrument, depending upon his or her length of service and the point in time at which the relevant long service leave benefit accrues.  The contention of the appellant was this could not have been the intention of Parliament, having regard to the terms of the legislative scheme as a whole.

81      In aid of its argument as to the meaning of s 4(3), the appellant also referred to a recent decision of the Full Court of the Federal Court in Maughan Thiem Auto Sales Pty Ltd v Cooper (2014) 244 IR 399.  In this case, the Full Court considered the terms of s 113 of the Fair Work Act 2009 (Cth) which deals with the preservation of award based long service leave terms.  The appellant sought to derive support from the Full Court's decision, in relation to what was said by the appellant to be in part, similar language to that used in s 4(3) of the LSL Act.

82      For the respondent, it was contended that the learned Industrial Magistrate reached the right decision in this case.  It was submitted that there is no basis, construing the legislative scheme under the LSL Act in accordance with its terms, for an "on the whole" objective consideration of all of the terms of an industrial instrument, compared to the benefits arising under the LSL Act.  Such a course would be, on the respondent's submissions, an unworkable and confusing approach, requiring the consideration of the entirety of the terms of the relevant industrial agreement each and every time the issue of comparability for long service leave purposes arises.

83      The key provision is s 4(3) of the LSL Act which is in the following terms:

(3) Where a person is, by virtue of — 

(a) an award or industrial agreement;

(b) an employer‑employee agreement under Part VID of the Industrial Relations Act 1979 or other agreement between the person and his employer; or

(c) an enactment of the State, the Commonwealth or of another State or Territory,

entitled to, or eligible to become entitled to, long service leave at least equivalent to the entitlement to long service leave under this Act, that person is not within the definition of "employee" in subsection (1).

84      As has been repeatedly said by the High Court, interpretation is a text based activity and the first point of consideration is the text of the statute concerned:  Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 per Hayne, Heydon, Crennan and Kiefel JJ at par 47; Amcor Ltd v CFMEU (2005) 222 CLR 241 per Kirby J at par 67.  Furthermore, as the learned authors Pearce, D C and Geddes, R S in Statutory Interpretation in Australia (8th Ed, 2014) state at pars 2.26 and 2.38 respectively, all words in a statute should be given some meaning and effect, and it is presumed that words mean what they say, unless that may lead to an absurd or irrational result.

85      The LSL Act, when first made, provided that it was an Act to grant long service leave to employees whose employment was not regulated under the then Industrial Arbitration Act 1912 (WA).  The then s 4 of the Act set out a definition of "employee" which contained a number of exclusions, one of which in s 4(c)(iii), included a person whose terms and conditions of employment were regulated by an award or industrial agreement under the then Industrial Arbitration Act 1912.  A number of other exclusions to the definition of "employee" applied to persons who were "entitled, or eligible to become entitled" to long service leave elsewhere, such as in employment in the public sector or those covered by Commonwealth awards etc.

86      In 1995 the Industrial Relations Legislation Amendment and Repeal Act 1995 (WA), among other things, amended s 4 of the LSL Act to insert the current s 4(3).  This amendment, which took effect on 16 January 1996, introduced for the first time, the concept of "equivalence" between entitlements under a relevant industrial instrument and those under the LSL Act, to determine who was to be covered by the legislation.

87      Section 4(3) is located in Part II of the LSL Act dealing with the "Construction and application of this Act".  The entitlements to long service leave are set out in Part III which has the heading "Entitlements to long service leave or to payment in lieu thereof".  Whilst s 4(3) refers to "the entitlement" to long service leave under the LSL Act, it is clear from the terms of Part III that there are in fact a number of entitlements prescribed.  The two principal entitlements of course are a period of fully accrued long service leave after at least 10 years of continuous employment and a pro rata entitlement to long service leave after a period of at least seven years of continuous employment.  In the present case, it was not in dispute that the respondent had at least seven years of continuous employment with the appellant and would therefore qualify for pro rata long service leave under the LSL Act if the legislation applied.

88      In my view what s 4(3) requires, construed in accordance with its ordinary and natural meaning, is that an employee has either an "entitlement" to long service leave accrued under an industrial instrument or has, prospectively, the "eligibility" for the same.  In the case of the former, at the time of the entitlement arising under either a relevant industrial instrument, s 4(3) requires a simple comparison to be made between the provisions of the legislation or the industrial instrument, to determine the issue of equivalence.  If the provisions of the industrial instrument and the LSL Act are of equal value, then the industrial instrument provision will apply.  If not, the terms of the LSL Act will apply.

89      For example, in the present case, the Agreement provides that an employee is entitled to 13 weeks long service leave after 10 years of service.  This is clearly a greater benefit than that provided by the LSL Act, which provides 8 2/3 weeks of long service leave for the same period of continuous service.  Similarly, the same conclusion could be reached by a prospective assessment.  That is, if and when an employee reaches 10 years of service, the question can simply be asked, what does the Agreement provide in such a case?  Is it at least equivalent to that under the LSL Act?  In the present circumstances it clearly would be, and provides a superior benefit.  The LSL Act would therefore not apply in that circumstance.

90      In the case of a pro rata entitlement, again, the same comparison can be made.  The question could be asked of a bystander, armed with the relevant information, "what about pro rata long service leave?"  This would lead to a comparison between the terms of the LSL Act and the Agreement.  As the terms of 6.6.5 of the Agreement (see AB 44) are far more restrictive in relation to pro rata long service leave, and do not provide for a pro rata benefit when an employee resigns in the ordinary course, then, for the purposes of s 4(3), the answer must be that the Agreement is to be regarded as not "at least equivalent" to the pro rata entitlement under the LSL Act and the latter would apply.

91      This approach to s 4(3) does not necessarily require the crystallisation of the entitlement or a "milestone" event to be reached, as found by the learned Industrial Magistrate, but it may do.  There is nothing precluding a prospective comparison, on the construction of the relevant provisions of the LSL Act, which I prefer.  This gives the words "or eligible to become entitled" some work to do.  In accordance with the ordinary meaning of the text in s 4(3), read with the terms of Part III dealing with entitlements to long service leave, there is no absurdity, capriciousness or irrationality in such a result: Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation (1981) 147 CLR 297. 

92      Bearing in mind also that the LSL Act is to be construed beneficially, as remedial legislation, this approach to the interpretation of s 4(3) is to be preferred:  Bull v Attorney-General (NSW) (1913) 17 CLR 370; Re Will and Estate of McComb [1999] 3 VR 485.  It is for these reasons that in my view, the approach to the interpretation of s 4(3) advanced by the appellant should not be accepted.  There is nothing in the language of the relevant provisions of the LSL Act that requires a global, objective assessment of all of the terms of a relevant industrial instrument concerning long service leave, compared to the entirety of the LSL Act, at the time of commencement of employment, to satisfy the "equivalence" criterion of s 4(3).  Furthermore, given that the evident purpose of s 4(3), read with Part III of the LSL Act, is to ensure that employees covered by relevant industrial instruments are not disadvantaged in relation to their long service leave benefits, then the construction adopted above is consistent with that purpose: s 18 Interpretation Act 1984 (WA).  

93      Finally, in relation to the decision of the Federal Court in Maughan Thiem, one can appreciate the initial attraction to the contention put by the appellant, that the words "would have entitled" in s 113 of the FW Act, provide some assistance to the appellant's argument in the construction of the words "eligible to become entitled" in s 4(3) of the LSL Act.  However, I consider that the Federal Court decision is distinguishable.  Firstly, the subject matter of s 113 of the FW Act is the preservation of award based long service leave terms, as part of the transitional arrangements under the National Employment Standards under the FW Act.  Secondly, there is no notion of comparability or equivalence used in s 113 as there is in s 4(3) of the LSL Act.  Thirdly, the language in s 4(3), unlike in s 113 of the FW Act, refers to both an entitlement and eligibility to an entitlement.

94      I would therefore dismiss the appeal.