WESTERN AUSTRALIAN INDUSTRIAL MAGISTRATES COURT

CITATION : 2019 WAIRC 00592

DELIVERED : Thursday, 1 August 2019

FILE NO. : M 206 OF 2018

CLAIMANT

AND

Director General, Department Primary Industries and Regional Development

Respondent

CatchWords : INDUSTRIAL LAW (WA) – Application to strike out pleadings – Jurisdiction of industrial magistrate to hear claim – Enforcement of alleged failure to pay correct rate of pay for an incentive payment and long service leave – Voluntary severance under Targeted Voluntary Separation Scheme

Legislation : Industrial Relations Act 1979 (WA)

Public Sector Management Act 1994 (WA)

Public Sector Management (Redeployment and Redundancy) Regulations 2014 (WA)

Long Service Leave Act 1958 (WA)

Minimum Conditions of Employment Act 1993 (WA)

Industrial Magistrates Courts (General Jurisdiction) Regulations 2005 (WA)

Magistrates Court (Civil Proceedings) Act 2004 (WA)

Instruments : Public Sector and Government Officers CSA General Agreement 2017

Public Service Award 1992

Case(s) referred to

in reasons : Crowley v Chief Executive Officer, Department of Commerce 2017

WAIRC 00262

Kershaw v Sunvalley Australia Pty Ltd [2007] WASCA 278

Garbett v Midland Brick Company Pty Ltd [2003] WASCA 36

General Steel Industries Inc v Commissioner of Railways [1964] HCA 69

Fedec v The Minister for Corrective Services [2017] WAIRC

00828

Sammut v AVM Holdings Pty Ltd [No2] [2012] WASC 27

City of Wanneroo v Australian Municipal, Administrative, Clerical And Services Union [2006] FCA 813

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Excelior Pty Ltd [2013] FCA 638

Result : Application granted

Representation:

Claimant : Ms D. Larson (industrial officer)

Respondent : Mr R. Andretich (of counsel) from the State Solicitor’s Office

REASONS FOR DECISION

1          Susan Smailes (Ms Smailes) accepted a voluntary severance in March 2018 while employed as a financial analyst for the Department of Primary Industries and Regional Development (the Department). At the time she had been acting in a level 4 position for 10 years and was in receipt of a higher duties allowance (HDA), but her substantive position was classed as a level 2.

2          The voluntary severance was in response to an offer under a Targeted Voluntary Separation Scheme (the Scheme) made pursuant to reg 16 of the Public Sector Management (Redeployment and Redundancy) Regulations 2014 (WA) (the Redundancy Regulations).

3          Regulations 13, 14 and 15 of the Redundancy Regulations provide the severance entitlements that may be paid to an employee and includes a severance payment, payment of cash in lieu of all accrued long service leave and an incentive payment.

4          The Civil Service Association of Western Australia Inc. (the claimant) disputes the amount paid to Ms Smailes for the payment of cash in lieu of all accrued long service leave, the incentive payment and annual leave.

5          Ms Smailes says she was paid a severance payment upon redundancy at the level 4 rate and her annual leave, long service leave and incentive payment was paid at the level 2 rate.

6          The claimant seeks the payment of $8,414.98 to Ms Smailes being the difference between the amount paid to her and the amount she was entitled to had she been paid at the level 4 rate for annual leave, long service leave and incentive payment.

7          In making the claim to the Industrial Magistrates Court (IMC), the claimant says the Department failed to comply with:

• clause 40 of the Public Sector and Government Officers CSA General Agreement 2017 (the Agreement) in failing to pay the HDA;
• section 18 of the Minimum Conditions of Employment Act 1993 (WA) (MCE Act); and
• regulation 13 of the Redundancy Regulations.

8          On 31 May 2019, the Department lodged an application to dismiss the claimant’s claim as it relates to the payment for long service leave and the incentive payment at the level 4 rate on the basis that the IMC has no jurisdiction to deal with this aspect of the claim under s 83 of the Industrial Relations Act 1979 (WA) (the IR Act) or otherwise (the Application).

9          While not expressed in the Application, I infer the Application is made pursuant to reg 7(1)(h) of the Industrial Magistrates Courts (General Jurisdiction) Regulations 2005 (WA) (the IMC Regulations).

10       The claimant opposes the Application.

11       Schedule I to this decision outlines the jurisdiction of the IMC.

12       Schedule II to this decision outlines principles applicable to construction of an industrial agreement and statutes.

13       Schedule III to this decision contains relevant extracts of the Agreement and Public Service Award 1992 (the Award).

Issues for Determination

14       The following issues require determination:

• The IMC’s jurisdiction under s 83 of the IR Act.
• What provisions of what instrument and what orders are sought to be enforced by the claimant having regard to the claimant’s claim?
• The interaction between provisions of the MCE Act, the Agreement and the Award.
• The nature of the entitlements paid under the Redundancy Regulations.

The Department’s Contentions

15       The Department contends that:

• the IMC has jurisdiction conferred by s 83(1) of the IR Act to enforce ‘a provision of an instrument’ specified in s 83(2) which includes: (a) an award; (b) an industrial agreement; (c) an employer-employee agreement; and (d) an order made by the Western Australian Industrial Relations Commission (the Commission);
• Ms Smailes’ employment was governed by the Award and the Agreement, neither of which provides for the payment of the value of untaken accrued long service leave on cessation of employment;
• further, an entitlement to an incentive payment only arises upon the early acceptance of an offer of voluntary severance made under the Redundancy Regulations and not any award or agreement applicable to Ms Smailes; and
• any dispute regarding the amount paid arising from a voluntary severance under the Redundancy Regulations is confined to a referral made pursuant to s 95 or s 96A of the Public Sector Management Act 1994 (WA) (the PSM Act) (see Crowley v Chief Executive Officer, Department of Commerce 2017 WAIRC 00262).

Claimant’s Contentions

16       The claimant contends that the:

• claim concerns the rate of pay paid to Ms Smailes under the Scheme (which the Department says is a departure from the original claim);
• incentive payment forming part of the redundancy payments is an implied term of Ms Smailes’ contract of employment by virtue of the requirement to pay entitlements in full under s 17C(1) of the MCE Act and the Agreement where the incentive payment is a wage entitlement;
• Redundancy Regulations do not provide a rate of pay for long service leave which is contained in the Award and the Agreement where Ms Smailes is entitled to full pay implied pursuant to s 7 of the MCE Act;
• entitlements owed to Ms Smailes is not a decision within the definition of s 94 of the PSM Act where the decision was to offer voluntary severance to Ms Smailes, therefore, s 95 of the PSM Act has no application in Ms Smailes case; and
• amount owed for long service leave under the Award and Agreement is an entitlement enforceable under s 83 of the IR Act and the incentive payment was not paid in full and is enforceable under s 83 of the IR Act due to the operation of s 17C of the MCE Act.

Jurisdiction of the IMC

17       The IMC jurisdiction under s 83 of the IR Act is uncontroversial. That is, an application to the IMC for enforcement can only be made in respect of an instrument to which subsection (1) applies. These instruments are detailed in subsection (2) and include an award, an industrial agreement, an employer-employee agreement or an order made by the Commission.

18       To invoke the IMC’s enforcement jurisdiction, the claimant must first identify which instrument it says it is seeking to enforce. In Ms Smailes’ case the claimant can only rely upon the Award and/or the Agreement there being no employer-employee agreement and no order made by the Commission.

19       Thereafter, once the instrument is identified, consistent with the words in subsection (1), the claimant must then also identify the provision it says has been contravened or not complied with by the Department.

20       The claimant’s claim refers to a failure to comply with cl 40 of the Agreement, which is not challenged in the Application, a failure to comply with s 18 of the MCE Act and a failure to comply with reg 13 of the Redundancy Regulations.

21       The order sought by the claimant is the payment of an amount of money it says is the difference between the amount Ms Smailes was paid and the amount it says she was entitled to be paid under the Scheme. Any such order can only be made by the IMC under s 83A(1) of the IR Act in proceedings under s 83 where the employee has not been paid an amount to which they are entitled under the relevant instrument.

The Claimant’s Claim

22       The claimant’s claim is predicated on it being the correct interpretation of the Redundancy Regulations where it says Ms Smailes ought to have been paid at the level 4 rate of pay when she was paid out annual leave, long service leave and the incentive payment.

23       The claimant’s claim acknowledges the incentive payment arises because of the Redundancy Regulations, but the claimant now seeks to import into an employment instrument a term of its payment otherwise than by reason of the Redundancy Regulations.

24       The claimant’s claim also acknowledges the Award does not specify arrangements for paying out any accruals on termination of employment, including long service leave, but says s 18 of the MCE Act applies to the applicable rate of leave that ought to have been paid. However, the claimant now also seeks to rely upon payments of long service leave contained in the Award and the Agreement to be paid in full in compliance with s 17C of the MCE Act.

25       On 18 April 2019, the claimant lodged further and better particulars of its claim. Relevant to the Application are part 3 – long service leave and part 4 – incentive payment. In part 3, the claimant says Ms Smailes is entitled to long service leave at ‘full pay’ under cl 25 of the Award meaning that she is entitled to an amount of long service leave paid at the higher rate. In part 4, the claimant similarly says Ms Smailes is entitled to an incentive payment at the higher rate but relies on the definition of ‘pay’ in reg 13 of the Redundancy Regulations.

The Award

26       Clause 25 of the Award provides for long service leave. Broadly speaking it refers to when the entitlement to long service leave commences and how it is calculated, when it may be taken, and the terms upon which it may be taken. Clause 25 is silent on what occurs to long service leave entitlements upon the cessation of employment and the rate at which long service leave is paid, save that under cl 25(1) an officer is entitled to 13 weeks of long service leave on full pay.

27       The Award does not contain a provision relating to redundancy, severance payments, or incentive payments.

The Agreement

28       Clause 30 of the Agreement provides for early access to pro-rata long service leave. Similar to clause 25 of the Award it is silent on what occurs to long service leave entitlements upon the cessation of employment and the rate of pay for long service leave.

29       Clause 45 of the Agreement provides for redeployment and redundancy where the parties to the Agreement (including the claimant) acknowledge the PSM Act and the Redundancy Regulations provide the legislative framework for redeployment and redundancy for all employees covered by the Agreement (including Ms Smailes). Further, if the provisions of the Agreement and the Redundancy Regulations are inconsistent, the provision of the Redundancy Regulations prevail.

30       Thereafter, cl 45 of the Agreement provides for how surplus employees are to be managed and is silent on severance payments, rates of pay or types of payments to be made.

31       The Agreement does not otherwise contain a provision relating to severance payments or incentive payments.

The MCE Act

32       Section 5(1) of the MCE Act provides that the minimum conditions of employment extends to and binds all employees and employers and are taken to be implied, relevantly, in any  award (s 5(1)(aa) and s 5(1)(c) of the MCE Act do not apply in Ms Smailes case).1

33       Award is defined to mean an award made under the IR Act and includes any industrial agreement or order of the Commissioner under that Act.2

34       Minimum condition of employment means: (a) the requirement as to the maximum hours of work; or (b) a rate of pay prescribed by the MCE Act; or (c) a requirement as to pay, other than a rate of pay, prescribed by the MCE Act; (d) a condition for leave prescribed by the MCE Act; or (e) the use, in manner prescribed by the MCE Act, of a condition for leave prescribed by the MCE Act; or (f) a condition prescribed by Part 5.3

35       The enforcement of a minimum condition of employment where the condition is implied in an award may occur under Part III of the IR Act, which includes s 83.4

36       Section 17C(1) of the MCE Act provides that where an employee receives their pay in money they are entitled to be paid in full and the payment is to be made by one of four ways provided for in s 17C(1)(a) to (d).

37       Section 18(1) of the MCE Act provides that where leave is paid leave, payment is to be made at the rate the employee would have received as his or her payment at the time the leave is taken under, relevantly, the award. Subsection (3) provides that the payment for overtime, penalty rates or any kind of allowance is not required to be considered in determining any rate of payment for this section.

38       The Industrial Appeal Court in Kershaw v Sunvalley Australia Pty Ltd [2007] WASCA 278 [22] - [24], explained the interaction of sections 5 and 7 of the MCE Act and sections 83 and 83A of the IR Act, albeit as it related to minimum conditions of employment implied into a contract of employment rather than an award or agreement.

39       The effect of s 5 of the MCE Act is that the minimum conditions of employment, including s 17C and s 18, is implied in an award or agreement. The effect of s 7 of the MCE Act is that the minimum condition may be enforced under s 83 of the IR Act as if it were a provision of an award or agreement.5

40       However, notably in Kershaw, Le Miere J (with whom Wheeler and Pullin JJ agreed) stated:

The obligation of the respondent to pay to the appellant annual leave entitlements owing at 30 June 2003 arises, if at all, from the provisions of the deed. The deed is not an instrument to which s 83(1) applies and the provisions of the deed are not provisions of an instrument to which s 83(1) of the IR Act applies or which are deemed by s 7 of the MCE Act to be provisions to which s 83(1) of the IR Act applies[28].

The Public Sector Management Act 1994 (WA)

41       Part 6 of the PSM Act contains provisions relating to redundancy and redeployment in the Public Sector. Section 94 of the PSM Act details the regulation-making power relating to the redundancy and redeployment of registrable employees, who are defined in s 94(1A).

42       Section 95 of the PSM Act invests the Commission with certain powers to review a decision made or purported to be made under regulations referred to in s 94. Two things arise: (1) the Commission does not have jurisdiction in respect of a referred decision from s 94 if the employment of the employee concerned is terminated;6 and (2) the Commission must confine its determination to whether the regulations in s 94 have been fairly and properly applied in relation to the employee.7

43       In respect of (1), pursuant to s 95(6) of the PSM Act, the Commission does not have jurisdiction in respect of a purported referral of a s 94 decision in circumstances where the employment of the employee concerned has already come to an end at the time of the referral.8

44       Section 96A of the PSM Act invests the Commission with certain powers to review a decision made under regulations referred to in s 95A. Section 95A of the PSM Act concerns the termination of employment of a registered employee (as that term is defined). Ms Smailes was not a registered employee for the purposes of Part 6 of the PSM Act or the Redundancy Regulations.

45       According to the Full Bench of the Commission in Crowley:

…there is only one power conferred to hear and determine a claim by a government officer, including a former government officer, that he or she has not been paid a severance payment in accordance with the requirements of the Redeployment and Redundancy Regulations. The sole power of the Commission to hear and determine such a claim and the power of a government officer to refer such a claim is confined to a referral made pursuant to s 95 or s 96A of the PSM Act [69].

46       The Full Bench referred to policy reasons for concluding that the specific power conferred on the Commission to review a s 94 decision or a s 95A decision was limited to a referral under s 95 or s 96A of the PSM Act rather than by way of a referral pursuant to s 23(1) invoking the Commission’s general power of review.

47       Ms Smailes no longer has a right of review to the Commission under s 95(6) of the PSM Act.

48       The claimant effectively seeks to circumvent the effect of the decision in Crowley by applying for the enforcement of an award or agreement term under s 83 of the IR Act, rather than by the Commission’s review powers under s 95 or s 96A of the PSM Act, and implying into the Award and/or the Agreement certain MCE Act conditions it says are applicable to the payments made to Ms Smailes.

49       Neither of these issues appear to have been argued before the Full Bench in Crowley (because it was not the case run by Mr Crowley), and the question is whether the conclusion on jurisdiction in Crowley applies in Ms Smailes case as it relates to the jurisdiction of the IMC to review payments made to Ms Smailes under the umbrella of the IMC’s enforcement jurisdiction in s 83 of the IR Act.

The Redundancy Regulations

50       There is no dispute the Scheme was made pursuant to the Redundancy Regulations and Ms Smailes was offered voluntary severance under the Scheme which she accepted.

51       Regulation 16 of the Redundancy Regulations provides for the approval of a scheme under which employees are invited to apply to be offered voluntary severance, which in Ms Smailes case, included the Scheme.

52       The Scheme was published in the Government Gazette, WA on 15 September 2017 which contained the following relevant terms:

• regulations 3, 13, 14 and 17 shall apply to all offers of voluntary severance made under this scheme; and
• an employee who accepts a voluntary severance shall be paid an incentive payment consistent with regulation 15.

53       Regulation 13 provides the calculation to be applied in determining the amount of severance pay made where ‘pay’ is defined in reg 3(1) of the Redundancy Regulations but also includes the allowances referred to in reg 13(1)(a) to (c).

54       Regulation 14 requires the employing authority to pay, in addition to any amount payable under any relevant employment instrument, cash in lieu of all accrued long serve leave to the extent, if any, not provided for by that instrument.

55       Employment instrument means a contract of employment or an award.9 Relevantly, award means an award, industrial agreement or order under the IR Act.10

56       Regulation 15 refers to an incentive payment, which is a payment made when an employee accepts an offer of voluntary severance but resigns earlier than four weeks after the day on which the offer is accepted. The calculation depends on the timing of the resignation.

57       Regulation 17 refers to restriction of employment in the public sector after the payment of a severance payment and is not relevant to the Application.

58       Section 95B of the PSM Act deals with inconsistencies between Part 6 of the PSM Act, any regulations made under s 94 or s 95A of the PSM Act and any award or agreement.

59       Section 95B(2) of the PSM Act provides that ‘the provisions of this Part and regulations referred to in sections 94 and 95A prevail, to the extent of any inconsistency, over any industrial agreement’. Clause 45 of the Agreement contains a similar term.

60       In Ms Smailes’ case the industrial agreement is the Award and/or the Agreement.

What is the incentive payment?

61       The incentive payment referred to in reg 15 of the Redundancy Regulations arises solely because of accepting an early voluntary severance. The Award and/or the Agreement contains no reference to the payment of an incentive payment.

62       The claimant’s claim as it relates to the payment of the incentive payment is that Ms Smailes ought to have been paid in accordance with the definition of ‘pay’ in reg 3(1) of the Redundancy Regulations (which arguably includes an allowance in reg 3(2)).  However, at the hearing of the Application the claimant increased the scope of its claim to include the reference to a term being implied into the Award or Agreement that the incentive payment ought to have been ‘paid in full’ pursuant to s 17C of the MCE Act.

63       There does not appear to be any inconsistency between the actual payment of an incentive payment under the Redundancy Regulations and the Award and/or Agreement. To the extent that there may be an inconsistency, it relates to the amount of the incentive payment to be paid.

64       Leaving aside the claimant’s ability to alter its claim as it sought to do, is there any merit in the claimant’s contention as it relates to the meaning of ‘paid in full’?

Operation of section 17C of the MCE Act

65       Section 17C of the MCE Act is within Part 3A of the MCE Act entitled ‘Other requirements as to pay’. Section 3 of the MCE Act defines ‘minimum condition of employment’, which relevant to s 17C, includes at (b) a requirement as to pay, other than a rate of pay, prescribed by this Act (my emphasis).

66       The claimant argues that the requirement to ‘paid in full’ referred to in s 17C of the MCE Act means the employee is entitled to be paid all his or her entitlements at the rate of pay applicable to the employee.

67       There are three reasons why I do not accept the claimant’s construction of ‘paid in full’ in s 17C MCE Act.

68       First, the definition of ‘minimum condition of employment’ applicable to s 17C expressly excludes rates of pay, which is contained in Part 3 of the MCE Act.  Thus, s 17C of the MCE Act must be referrable to something other than how much money is paid or is entitled to be paid or the rate of pay.

69       Secondly, a review of the whole of Part 3A demonstrates that this part is directed to ensuring the employer, unless authorised by the employee, pays the whole of the employee’s pay in money to the employee and does not withhold monies or compel the employee to accept some other form of remuneration in lieu of money.11

70       Thirdly, the claimant’s suggested interpretation of ‘paid in full’ in s 17C does not provide a harmonious construction of s 17B, s 17C and s 17D of the MCE Act where the sections are intended to be read together.

71       That is, s 17D(1) starts with ‘[d]espite section 17C, an employer may deduct from an employee’s pay…’. On the claimant’s contention, the opening words to s 17D(1) would have no meaning because s 17C on the claimant’s construction requires an employee to be paid all their entitlements at an applicable rate rather than being paid the whole of their entitlements.

72       Therefore, while I accept that s 17C of the MCE Act is deemed to apply to the Award and/or Agreement, in my view, it does not operate in the manner suggested by the claimant but requires the whole of an employee’s pay (howsoever comprised) to be paid in money by the employer to the employee, unless otherwise authorised by the employee.

73       However, if I am wrong about that, where the Redundancy Regulations apply to the extent of any inconsistency with the Award and/or Agreement, issues relating to the rate of pay to be applied to an incentive payment are outlined in reg 3 and reg 14 of the Redundancy Regulations and not by reference to s 17C of the MCE Act, implied or otherwise.

Determination on incentive payment

74       Having regard to the application of s 17C of the MCE Act and the genesis of an incentive payment, the requirement to pay an incentive payment arises from the acceptance of a voluntary severance under the Redundancy Regulations and not from any provision, implied or otherwise, of the Award or the Agreement.

75       Further, the claimant’s claim as it relates to the payment of the incentive payment is predicated on Ms Smailes being paid at an incorrect rate of pay and rather than she was not paid the whole of any payment. The claimant is seeking a review of the rate of pay paid as an incentive payment.

76       Accordingly, the IMC does not have jurisdiction to consider the rate of pay of the payment of the incentive payment because no provision of the Award or Agreement, implied or otherwise, has been contravened applicable to the payment of the incentive payment, which is capable of being enforced under s 83 of the IR Act.

77       Further, where the claimant is seeking a review of the rate of pay paid for an incentive payment, if Crowley applies to an incentive payment in the same way that it applies to a severance payment, the appropriate review is under s 95 of the PSM Act as a payment not made in accordance with the requirements of the Redundancy Regulations.

78       The claimant contends that unless the ground on which the strike out of a part of a case is ‘clearly demonstrated’ and ‘apparent at a glance’ the claimant ought not to be denied access to court.12

79       However, similarly, argument ‘perhaps even of an extensive kind, may be necessary to demonstrate that the case of the plaintiff is so clearly untenable that it cannot possibly succeed’.13

80       In Ms Smailes’ case, it is clear, albeit via legal argument, that there is no provision of an award or agreement capable of being enforced applicable to the payment of an incentive payment paid under reg 15 of the Redundancy Regulations.

81       Therefore, s 83 of the IR Act has no application and any alleged underpayment cannot be ordered pursuant to s 83A(1) of the IR Act.

Long service leave

82       As part of the offer and acceptance of a voluntary severance, regulation 14 of the Redundancy Regulations provides for the payment of all accrued long service leave of the employee (calculated for each completed year of service) to the extent, if any, not provided for by the Award or Agreement (my emphasis).

83       Accrued long service leave is defined in the reg 3(1) of the Redundancy Regulations.

84       The only provisions relevant and provided by the Award or the Agreement is the amount of long service leave an employee is eligible for once they have completed the requisite years of service or where they are eligible for early access to pro rata long service leave (to be taken as leave and not cash in lieu). However, in neither case does the Award or Agreement refer to the cashing out of long service leave upon cessation of employment, specifically upon the acceptance of voluntary severance.

85       I note the Long Service Leave Act 1958 (WA) provides for the payment of accumulated long service leave upon termination of employment but on different conditions.

86       Therefore, much like an incentive payment, the payment of all accrued long service leave (as defined) is a creature of the Redundancy Regulations, which arises only upon acceptance of voluntary severance.

87       The claimant contends that pursuant to s 18(1) of the MCE Act, implied into the Award or Agreement, Ms Smailes is entitled to be paid at the rate she would have received at the time the leave is taken under the Award.

88       Three issues arise with the claimant’s contention.

89       Firstly, s 18(1) of the MCE Act is predicated on the leave being taken rather than cashed out.  That is, when regard is had to the words ‘payment at the time the leave is taken’ and leave being paid leave, it is apparent that what is intended by s 18(1) is that when an employee takes paid leave, they get paid at the rate of pay they would have received had they been at work.

90       Section 18(3) of the MCE Act supports this interpretation where other payment types are not required to be taken into account in determining the rate of pay in s 18 of the MCE Act.

91       Second, s 18 of the MCE Act is within Part 4, which contains the types of leave for which paid leave and unpaid leave is available. That is, and by way of example, Part 4, Division 2 contains s 19(1) of the MCE Act, which entitles an employee to a yearly amount of paid leave as sick leave, carer’s leave or family leave. The entitlements accrue pro-rata on a weekly basis and are cumulative, but the employee is not entitled to take paid carer’s leave more than they are otherwise entitled to. Section 20B of the MCE Act entitles an employee to unpaid carer’s leave. There is no provision to cash out this type of paid leave.

92       Similarly, Part 4, Division 3 contains s 23 of the MCE Act, which entitles an employee to be paid annual leave of four weeks in a year up to 152 hours. Notably, s 24(1) of the MCE Act enables the employee to elect to be paid prior to the commencement of annual leave for the period of annual leave taken.

93       Part 4 further contains entitlements to paid bereavement leave, paid parental leave and so on.

94       Thus, when the sections are read together, Part 4 entitles an employee to, as a minimum, a certain amount and type of paid and unpaid leave during their employment. It says nothing about the cashing out of any type of leave and makes no reference to long service leave.

95       Thirdly, the cashing out of leave relevant to the Award and the Agreement is contained within cl 36 of the Agreement relating to annual leave and cl 25 of the Award relating to long service leave. The cashing out of long service leave says nothing about the rate of pay to be paid when it is cashed out. Further, early access to long service leave is referred to in cl 30 of the Agreement and can only be taken as paid leave and not cash in lieu. Meaning that in certain circumstances an employee can elect to take paid long service leave and have the time off work while employed but they cannot otherwise cash out their entitlement to pro rata long service leave.

96       Therefore, s 18 of the MCE Act is directed towards the payment of paid leave while the employee is employed and, in fact, taking paid or unpaid leave.

97       Section 18 of the MCE Act does not determine the rate of pay of entitlements to be paid upon the cessation of employment, including voluntary severance under the Redundancy Regulations.

98       Regulation 14 of the Redundancy Regulations refers to ‘pay’ in terms of the payment of cash in lieu of all accrued long service leave. ‘Pay’ is defined in reg 3(1) of the Redundancy Regulations and includes the sum of, relevantly, at (a) the award rate of pay, excluding allowances, applicable to the substantive classification of the recipient of the pay or, if the recipient does not have a substantive classification, the rate of pay, excluding allowances, under his or her contract of employment; and (b) an allowance listed in subregulation (2).

99       Regulation 3(2) of the Redundancy Regulations contains the applicable allowances for the purposes of the definition of ‘pay’ in subregulation (1).

100    As previously stated, the Award and the Agreement make no reference to the rate of pay of long service leave either at the time that it is taken, or when it is cashed out during employment, or upon the cessation of employment for the purposes of cashing out accrued long service leave.

101    The combined effect of regulations 3 and 14 of the Redundancy Regulations provides the mechanism within which all accrued long service leave is paid upon acceptance of voluntary severance, which would not otherwise be available to the employee (noting the definition of accrued long service leave includes long service leave that is accruing).

Determination on long service leave

102    Therefore, as with the incentive payment, having regard to the application of s 18 of the MCE Act and the genesis of the payment of cash in lieu for all accrued long service leave, the requirement to pay cash in lieu of all accrued long service leave arises from the acceptance of a voluntary severance under the Redundancy Regulations and not from any provision, implied or otherwise, of the Award or the Agreement.

103    Further, similar to the payment of the incentive payment, the claimant’s claim as it relates to the payment of the accrued long service leave is predicated on Ms Smailes being paid at an incorrect rate of pay. The claimant is seeking a review of the rate of pay paid for cash in lieu of all accrued long service leave.

104    Accordingly, the IMC does not have jurisdiction to consider the payment of the cash in lieu of all accrued long service leave because no provision of the Award or Agreement, implied or otherwise, has been contravened applicable to the payment of the cash in lieu of all accrued long service leave, which is capable of being enforced under s 83 of the IR Act.

105    Further, where the claimant is seeking a review of the rate of pay paid for the cash in lieu of all accrued long service leave, if Crowley applies to the cash in lieu of all accrued long service leave in the same way that it applies to a severance payment, the appropriate review is under s 95 of the PSM Act as a payment not made in accordance with the requirements of the Redundancy Regulations.

106    In Ms Smailes’ case, it is clear, albeit via legal argument, that there is no provision of an award or agreement capable of being enforced applicable to the payment of the cash in lieu of all accrued long service leave paid under reg 14 of the Redundancy Regulations.

107    Therefore, s 83 of the IR Act has no application and any alleged underpayment cannot be ordered pursuant to s 83A(1) of the IR Act.

Outcome

108    The Application is and be granted as follows:

1. Pursuant to reg 7(1)(h) of the of the IMC Regulations, paragraphs 26 to 27 of the claimant’s claim and order sought in respect to the payment of cash in lieu of all accrued long service leave and paragraphs 3.1 to 3.10 of the claimant’s further and better particulars with consequential calculations are struck out where the IMC has no jurisdiction to determine this aspect of the claim.
2. Pursuant to reg 7(1)(h) of the of the IMC Regulations, paragraphs 32 to 37 of the claimant’s claim and order sought in respect of the payment of incentive payment and paragraphs 4.1 to 4.8 of the claimant’s further and better particulars with consequential calculations are struck out where the IMC has no jurisdiction to determine this aspect of the claim.

109    I will now hear from the parties in respect of orders to be made.

D SCADDAN

INDUSTRIAL MAGISTRATE

1 Garbett v Midland Brick Company Pty Ltd [2003] WASCA 36 [81].

2 Section 3(1) of the MCE Act.

3 Section 3(1) of the MCE Act.

4 Section 7 of the MCE Act.

5 Kershaw [22] and Garbett [83].

6 Section 95(6) of the PSM Act.

7 Section 95(5) of the PSM Act.

8 Crowley [67(a)].

9 Regulation 3 of the Redundancy Regulations.

10 Regulation 3 of the Redundancy Regulations.

11 Commonly referred to as ‘Truck Act’ provisions.

12 General Steel Industries Inc v Commissioner of Railways [1964] HCA 69.

13 General Steel Industries.

Schedule I – Jurisdiction of the IMC

1. The IMC has the jurisdiction conferred by the Industrial Relations Act 1979 (WA) (IR Act) and other legislation. Sections 83 and 83A of the IR Act confer jurisdiction on the court to make orders for the enforcement of a provision of an industrial agreement where a person has contravened or failed to comply with the agreement. If the contravention or failure to comply is proved, the IMC may issue a caution or impose a penalty and make any other order, including an interim order, necessary for the purpose of preventing any further contravention. The IMC must order the payment of any unpaid entitlements due under an industrial agreement.
2. The powers, practice and procedure of the IMC are the same as a case under the Magistrates Court (Civil Proceedings) Act 2004 (WA). The onus of proving a claim is on the claimant and the standard of proof required to discharge this onus is proof ‘on the balance of probabilities’. The IMC is not bound by the rules of evidence and may inform itself on any matter and in any manner as it thinks fit. In Sammut v AVM Holdings Pty Ltd [No2] [2012] WASC 27 [40] - [47], Commissioner Sleight examined a similarly worded provision regulating cases in the State Administrative Tribunal of Western Australia, noting:

[T]he rules of evidence are [not] to be ignored…. After all, they represent the attempt made, through many generations, to evolve a method of enquiry best calculated to prevent error and elicit truth. …

The more flexible procedure provided for does not justify decisions made without a basis in evidence having probative force.

Schedule II – Relevant Principles of Construction

1. This case involves construing industrial agreements and statutes. Similar principles apply to both.  The relevant principles to be applied when interpreting an industrial instrument are set out by the Full Bench of the Western Australian Industrial Relations Commission in Fedec -v- The Minister for Corrective Services [2017] WAIRC 00828 [21] - [23]. In summary (omitting citations), the Full Bench stated:
   1. ‘The general principles that apply to the construction of contracts and other instruments also apply to the construction of an industrial agreement.’
   2. ‘The primary duty of the court in construing an instrument is to endeavour to discover the intention of the parties as embodied in the words they have used in the instrument. It is the objectively ascertained intention of the parties, as it is expressed in the instrument, that matters; not the parties' subjective intentions. The meaning of the terms of an instrument is to be determined by what a reasonable person would have understood the terms to mean;’
   3. ‘The objectively ascertained purpose and objective of the transaction that is the subject of a commercial instrument may be taken into account in construing that instrument. This may invite attention to the genesis of the transaction, its background and context. The apparent purpose or object of the relevant transaction can be inferred from the express and implied terms of the instrument, and from any admissible evidence of surrounding circumstances’;
   4. ‘An instrument should be construed so as to avoid it making commercial nonsense or giving rise to commercial inconvenience. However, it must be borne in mind that business common sense may be a topic on which minds may differ’;
   5. ‘An instrument should be construed as a whole. A construction that makes the various parts of an instrument harmonious is preferable. If possible, each part of an instrument should be construed so as to have some operation’; and
   6. ‘Industrial agreements are usually not drafted with careful attention to form by persons who are experienced in drafting documents that have legal effect.’

To the above list I would add:

7. Ascertaining the intention of the parties begins with a consideration of the ordinary meaning of the words of the instrument. Ascertaining the ordinary meaning of the words requires attention to the context and purpose of the clause being construed. City of Wanneroo v Australian Municipal, Administrative, Clerical And Services Union [2006] FCA 813 [53] - [57] (French J).
8. Context may appear from the text of the instrument taken as a whole, its arrangement and the place of the provision under construction. The context includes the history of the instrument and the legal background against which the instrument was made and in which it was to operate. City of Wanneroo v Australian Municipal, Administrative, Clerical And Services Union [supra] at [53] - [57] (French J); Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Excelior Pty Ltd [2013] FCA 638 [28] - [30] (Katzmann J).

Schedule III – Relevant Clauses

Public Service Award 1992

4. - SCOPE

This Award shall apply to all public service officers, other than those listed in (a), (b) and (c) of this clause, appointed under Part 3 or Part 8 Section 100, of the Public Sector Management Act 1994 or continuing as such by virtue of clause 4(c) of Schedule 5 of that Act, who are members of or eligible to be members of the Civil Service Association of Western Australia (Inc).

(a) A public service officer whose remuneration payable is determined or recommended pursuant to the Salaries and Allowances Act 1975.

(b) A public service officer whose remuneration is determined by an Act to be at a fixed rate, or is determined or to be determined by the Governor pursuant to the provisions of any Act.

(c) A chief executive officer as defined in section 3(1) of the Public Sector Management Act 1994.

…

6. - DEFINITIONS

In this Award, the following expressions shall have the following meaning:-

"Administrative Instruction" means administrative instruction as defined by Schedule 5 of the Public Sector Management Act 1994.

"Casual Officer" means an officer engaged by the hour for a period not exceeding one calendar month in any period of engagement, as determined by the employer.

"Chief Executive Officer" in relation to any officer employed in a Department, means the person immediately responsible for the general management of the Department to the Minister of the Crown for the time being administering the Department.

"De Facto Partner" means a relationship (other than a legal marriage) between two persons who live together in a 'marriage-like' relationship and includes same sex partners.

“Employees” means public service officers and executive officers employed in the Public Service under Part 3 and Part 8 of the Public Sector Management Act 1994.”

"Employer" and "Employing Authority" means employing authorities as defined by section 5 of the Public Sector Management Act 1994.

"Headquarters" means the place in which the principal work of an officer is carried out, as defined by the employer.

"Metropolitan Area" means that area within a radius of fifty (50) kilometres from the Perth City Railway Station.

"Officers" means public service officers and executive officers employed in the Public Service under Part 3 and Part 8 of the Public Sector Management Act 1994.

"Partner" means either spouse or defacto partner.

"Spouse" means a person who is lawfully married to that person.

“Union” means the Civil Service Association of Western Australia Incorporated (the Association).

…

25. - LONG SERVICE LEAVE

(1) Each officer who has completed:

(a) A period of 7 years of continuous service in a permanent and/or fixed term contract capacity; or

(b) 10 years of continuous service in a temporary capacity;

shall be entitled to 13 weeks of long service leave on full pay.

Employees may by agreement with their employer, clear any accrued entitlement to long service leave in minimum periods of one (1) day.

(2) Where an officer has continuous service in both a temporary and permanent capacity the date on which the officer shall become entitled to long service leave shall be determined by taking into account on a proportional basis the periods of temporary and permanent service.

The category of temporary officer ceased on 1 October 1994 with the repeal of the Public Service Act 1978.

(3) Each officer is entitled to an additional 13 weeks of long service leave on full pay for each subsequent period of 7 years of continuous service.

(4) A part-time officer shall have the same entitlement to long service leave, as full time officers however payment made during such periods of long service leave shall be adjusted according to the hours worked by the officer during that accrual period.

(5) For the purpose of determining an officer's long service leave entitlement, the expression "continuous service" includes any period during which the officer is absent on full pay or part pay from duties in the Public Service, but does not include:

(a) any period exceeding two weeks during which the officer is absent on leave without pay or unpaid parental leave, except where leave without pay is approved for the purpose of fulfilling an obligation by the Government of Western Australia to provide staff for a particular assignment external to the Public Sector of Western Australia;

(b) any period during which an officer is taking long service leave entitlement or any portion thereof except in the case of subclause (10) when the period excised will equate to a full entitlement of 13 weeks;

(c) any service by an officer who resigns, is dismissed or whose services are otherwise terminated other than service prior to such resignation, dismissal or termination when that prior service has actually entitled the officer to the long service leave under this clause;

(d) any period of service that was taken into account in ascertaining the amount of a lump sum payment in lieu of long service leave;

(e) any service of a Cadet whilst undertaking full time studies.

(6) A long service leave entitlement, which fell due prior to March 16, 1988, amounted to three (3) months.  A long service leave entitlement, which falls due on or after that date, shall amount to thirteen (13) weeks. 

(7) Any Public Holiday or days in lieu of the repealed public service holidays occurring during an officers absence on long service leave shall be deemed to be a portion of the long service leave and extra days in lieu thereof shall not be granted. 

(8) The employer may direct an officer to take accrued long service leave and may determine the date on which such leave shall commence.  Should the officer not comply with the direction, disciplinary action may be taken against the officer.

(9) An officer who has elected to retire at or over the age of 55 years and who will complete not less than 12 months continuous service before the date of retirement may make application to the employer to take pro rata long service leave before the date of retirement, based on continuous service of a lesser period than that prescribed by this clause for a long service entitlement.

(10) Compaction of leave

(a) An officer who, during an accrual period was subject to variations in ordinary working hours or whose ordinary working hours during the accrual period are less than the officer's ordinary working hours at the time of commencement of long service leave, may elect to take a lesser period of long service leave calculated by converting the average ordinary working hours during the accrual period to the equivalent ordinary hours at the time of commencement of long service leave.

(b) Notwithstanding subclause (6) of this clause, an officer who has elected to compact an accrued entitlement to long service leave in accordance with paragraph (10)(a) of this clause, shall only take such leave in any period on full pay, and the period excised as "continuous service" shall be 13 weeks.

(11) Portability

(a) Where an officer was, immediately prior to being employed in the Public Service, employed in the service of:

The Commonwealth of Australia, or

Any other State Government of Australia, or

Any Western Australian State body or statutory authority prescribed in Administrative Instruction 611

and the period between the date when the officer ceased previous employment and the date of commencing employment in the Public Service does not exceed one week, that officer shall be entitled to long service leave determined in the following manner:

(i) the pro rata portion of long service leave to which the officer would have been entitled up to the date of appointment under the Public Sector Management Act 1994, shall be calculated in accordance with the provisions that applied to the previous employment referred to, but in calculating that period of pro rata long service leave, any long service leave taken or any benefit granted in lieu of any such long service leave during that employment shall be deducted from any long service leave to which the officer may become entitled under this clause; and

(ii) the balance of the long service leave entitlement of the officer shall be calculated upon appointment to the Public Service in accordance with the provisions of this clause.

(b) Nothing in this clause confers or shall be deemed to confer on any officer previously employed by the Commonwealth or by any other State of Australia any entitlement to a complete period of long service leave that accrued in the officer's favour prior to the date on which the officer commenced employment in the Public Service.

(12) Half Pay

Subject to the employer's convenience, an employer may approve an officer's application to take long service leave on full pay or half pay.  In the case of long service leave which falls due on or after March 16, 1988 portions in excess of four weeks shall be in multiples of one week's entitlement.

(13) Long Service Leave on Double Pay

(a) Employees may by agreement with their employer, access any portion of an accrued entitlement to long service leave on double pay for half the period accrued.  In these circumstances the leave actually taken is 50 percent of the accrued entitlement accessed.

(b) Where employees proceed on long service leave on double pay in accordance with this subclause, the entitlement accessed is excised for the purpose of continuous service in accordance with subclause (5) of this clause.

(14) Cash Out of Accrued Long Service Leave Entitlement

(a) Employees may by agreement with their employer, cash out any portion of an accrued entitlement to long service leave, provided the employee proceeds on a minimum of ten (10) days annual leave in that calendar year.

(b) Where employees cash out any portion of an accrued entitlement to long service leave in accordance with this subclause, the entitlement accessed is excised for the purpose of continuous service in accordance with subclause (5) of this clause.

Public Sector and Government Officers CSA General Agreement 2017

30. EARLY ACCESS TO PRO RATA LONG SERVICE LEAVE

30.1 This clause is to be read in conjunction with clause 25 – Long Service Leave of the Applicable Award.

30.2 For the purpose of this clause, “Employee” includes full time, part time, permanent and fixed term contract Employees.

30.3 Subject to clause 30.5, Employees within seven years of their preservation age under Western Australian Government superannuation arrangements may, by agreement with their Employer, choose early access of their long service leave at the rate of 9.28 days per completed twelve month period of continuous service for full time Employees.

30.4 Part time Employees have the same entitlement as full time Employees, with their entitlement calculated on a pro rata basis according to any variations to their ordinary working hours during the accrual period.

30.5 Early access to pro rata long service leave does not include access to long service leave to which the Employee has become entitled, or accumulated prior to being within seven years of their preservation age.

30.6 Under this clause, long service leave can only be taken as paid leave and there is no capacity for payment in lieu of leave.

30.7 Employees may, by agreement with their Employer, clear long service leave in minimum periods of one day.

30.8 Where Employees access pro rata long service leave early, any period of leave taken will be excised for the purpose of continuous service in accordance with the following clauses of the Applicable Award:

(a) clause 25 (5) of the Public Service Award 1992; or

(b) clause 25 (4) of the Government Officers Salaries, Allowances and Conditions Award 1989.

…

40. HIGHER DUTIES ALLOWANCE

Higher Duties Allowance and Leave

40.1 This clause replaces clauses 19 (6), (7) and (8) – Higher Duties Allowance of the Applicable Award.

40.2 Where an Employee who is in receipt of an allowance granted under clause 19 – Higher Duties Allowance of the Applicable Award and has been doing so for a continuous period of twelve months or more, proceeds on any period of paid leave and:

(a) resumes in the office immediately on return from leave, the Employee shall continue to receive the allowance for the period of leave; or

(b) does not resume in the office immediately on return from leave, the Employee shall continue to receive the allowance for the period of leave accrued during the period of higher duties.

40.3 Where an Employee who is in receipt of an allowance granted under clause 19 – Higher Duties Allowance of the Applicable Award for less than twelve months proceeds on a period of paid leave, whether in excess of the normal entitlement or not, the Employee shall continue to receive the allowance for the period of normal leave provided that:

(a) during the Employee’s absence, no other Employee acts in the office in which the Employee was acting immediately prior to proceeding on leave; and

(b) the Employee resumes in the office immediately on return from leave.

40.4 For the purpose of clause 40.3, “normal leave” means the period of paid leave an Employee would accrue in twelve months. It shall also include any public holidays and leave in lieu accrued during the preceding twelve months taken in conjunction with such paid leave.

Part Time Higher Duties Allowance Arrangements

40.5 This clause shall be read in conjunction with clause 19 – Higher Duties Allowance of the Applicable Award.

40.6 Where a part time Employee acts in a higher office, the allowance shall be payable after the completion of 37.5 hours service in that position. The 37.5 hours service in the higher position must be worked consecutively according to the normal working hours of the part time position for which the allowance is being paid.

…

45. REDEPLOYMENT AND REDUNDANCY

45.1 The parties acknowledge that the Public Sector Management Act 1994 (PSMA) and the Public Sector Management (Redeployment and Redundancy) Regulations 2014 (Regulations) provide the legislative framework for redeployment and redundancy for all Employees covered by this General Agreement. If the provisions of this General Agreement and the Regulations are inconsistent, the provision of the Regulations shall prevail.

45.2 The Employer and prospective Employer will assess the Suitability of a Surplus employee broadly which includes, but is not limited to:

(a) acknowledging that the Employee’s classification level illustrates core competencies for that classification level;

(b) providing sufficient weight to the Employee’s knowledge, skills and experience; and

(c) recognising the transferability of skills to roles where a direct fit may not exist.

45.3 The Employer and prospective Employer will seek to place Surplus employees in suitable positions in accordance with clause 45.2.

45.4 The Employer will provide Surplus employees with direct access to priority vacancies through the online Recruitment Advertising Management System.

45.5 The Employer will provide Surplus employees with case management in line with the Public Sector Commission’s Redeployment and Redundancy Guidelines and the Public Sector Commission’s Redeployment and Redundancy Guidelines Appendix A – Case Management or any revised arrangement subsequent to the review of the redeployment and redundancy provisions. The Employer will ensure that Surplus employees are provided with an appropriately skilled case manager/s, a skills audit and continual support to find Suitable employment.

45.6 Upon notification of registration, the Employer shall provide an Employee who is notified of the Employer’s intention to register them under regulation 18 of the Regulations with the written reason/s for the intended registration and the possible employment, placement and training options available to them.

45.7 Where the Employer is able to do so consistent with Commissioner’s Instruction No. 12 – Redeployment and Redundancy, the Employer may Suspend the Redeployment period of a Registered employee for the duration that the Employee is participating in retraining, a secondment or other employment placement arrangement. Where suspension of the total duration would exceed the allowable duration under Commissioner’s Instruction No. 12 – Redeployment and Redundancy, the Employer may Suspend the Redeployment period for the portion allowable.

45.8 When a Registered employee enters the last three months of their Redeployment period, the Employer will notify the Union as soon as possible.