CONTRACTUAL BENEFIT CLAIM

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

CITATION : 2025 WAIRC 00033

DELIVERED : FRIday, 24 January 2025

FILE NO. : B 61 OF 2023

Applicant

AND

SIGNCRAFT (AUST) PTY LTD

Respondent

CatchWords : Denied contractual benefits – entitlements under a contract of employment – probation – casual – annual leave accrued – personal and carer’s leave – public holidays – national employment standards – clean hands – misconduct of employee – breach of employment contract

Legislation : Fair Work Act 2009 (Cth)

  Industrial Relations Act 1979 (WA)

Result : Application dismissed

Representation:

Applicant : Ms Suzanne Galloway

Respondent : Mr Gregory Morgan

Case(s) referred to in reasons:

Belo Fisheries v Dennis Terence Froggett (1983) 63 WAIG 2394;

Charles (Carmelo) Parrella v FBM Corporation Pty Ltd [2012] WAIRC 00903; (2012) 92 WAIG 1988

Civil Service Association of Western Australia Incorporated v Director General, Ministry of Justice [2003] WAIRC 08587; (2003) 94 WAIG 215

Lai Corporation Pty Ltd v Steinberg (1986) 28 AILR 492

Matthews v Cool or Cosy Pty Ltd & Anor [2004] WASCA 114; (2004) 84 WAIG 2152

Perth Finishing College Pty Ltd v Susan Watts (1989) 69 WAIG 2307

Reginald Simons v Business Computers International Pty Ltd (1985) 65 WAIG 2039

Waroona Contracting v Usher (1984) 64 WAIG 1500

Reasons for Decision

1         Ms Suzanne Galloway (the applicant) brings a claim for denied contractual benefits.  The applicant claims $4,560.00 being for one month pay in lieu of notice, $1,140.00 being for 38 hours carers leave and $1,527.63 being for 50.92 hours annual leave accrued but not taken.  The applicant also claims that she was underpaid by $2.00 per hour in the first week of her employment and seeks payment of $80.00.  The total amount claimed is $7,307.63.

2         The respondent, Signcraft (Aust) Pty Ltd (Signcraft) is the applicant’s former employer. It opposes the claim and says the applicant was paid her entitlements due under the terms of the contract of employment.  The respondent also says the applicant misconducted herself and was in breach of her employment contract and contends that in the circumstances of the applicant’s misconduct, it would be unfair to grant the applicant’s claim.

Factual background and Evidence

3         The applicant was employed by the respondent as a signwriter from 28 February 2023 until the employment relationship ended on or around 28 July 2023.

4         The respondent wrote to the applicant on 23 January 2023 offering her a position of Signwriter/Installer starting on 13 February 2023.  The terms of the employment set out in the letter stated the position was casual, then full time after three months’ probation.  The letter further stated that the applicant’s ‘employment is on a contractual basis for a period of three months subject to renewal’.

5         The parties agree that the applicant was subsequently employed under a written contract dated 20 March 2023.  The contract terms provided she was full time and was appointed for a probationary period of three months from the commencement date of 24 February 2023 during which time the employment may be terminated by the employer with two weeks’ notice.  The terms of the contract provided four weeks annual leave, ten days paid personal or carer’s leave accrued on a pro-rata basis per year, and up to two days unpaid carer’s leave for each occasion an immediate family or household member required care or support because of personal illness or injury or an unexpected emergency, and one months’ notice of termination of the employment.  The contract operated from 24 February 2023.

6         The respondent says that the applicant was employed on a casual basis and commenced full time employment on 20 May 2023.  The respondent contends that the applicant was not entitled to annual leave and paid sick leave prior to 20 May 2023 because she was a casual employee at that time.  Therefore, the applicant’s claim for any accrued leave and personal leave accrued prior to 20 May 2023 are not entitlements which have been denied.

7         The parties disagree on the circumstances of the termination.  The applicant says she was dismissed at the initiative of the respondent, and she is entitled to payment of notice. The respondent says the applicant effectively resigned without notice.

8         The respondent’s evidence is that on the morning of 28 July 2023 the applicant was swearing, behaving angrily and aggressively to staff and customers, and being disruptive.  The applicant was informed that her behaviour was not acceptable, and to go home and adjust her attitude when she returned to the workplace on Monday.  The applicant left the workplace and then shortly after returned and removed her Signcraft uniform T-shirt, threw it on a bench and demanded a separation certificate and her final pay.

9         The respondent’s evidence is that later that day the applicant contacted Signcraft staff and insisted on receiving a separation certificate and payment of her final pay.  On the same day the applicant visited the principal of the respondent, Mr Morgan, at his home, and spoke to his partner in an aggressive manner demanding to speak with Mr Morgan.

10      Later that day, Mr Morgan emailed the applicant stating that she is not to phone or return to the office.

11      On 1 August 2023, Signcraft emailed the applicant advising that it accepted her resignation and had paid her entitlements and provided her a separation certificate as she had requested.

12      After the applicant had left the workplace, it was noticed by one of the staff that the cameras in the print room were not working. On investigating the cause of the dysfunction, it was found that grease had been smeared over the camera lenses.

13      The camera recordings made on 27 July 2023 were submitted into evidence and the recordings show the applicant smearing the camera lenses.  The respondent contends that the applicant’s actions were deliberate and were done to prevent observation of her subsequently using the business equipment for her own personal use.

14      The applicant says that she did not intentionally smear the cameras with grease and that she was cleaning the cameras.

15      A camera was damaged and replaced at a cost of $465.00 to the respondent.

16      I find that the Ms Galloway deliberately smeared grease on the cameras.  I do not find the applicant to be credible when she says that she was instructed to clean the cameras and somehow mistakenly used grease to do so.  The recordings show that after applying the grease to the camera lenses, the applicant observed the display monitors.  It is clear from the video recording of her observing the camera’s video display, that she would have noticed the display for each camera was obscured.  Her reaction is not consistent with that of a person realising a significant problem had occurred, if the purpose of the applicant had been to clean the camera lenses.

17      I therefore find that this was a deliberate act by the applicant to prevent the observation and recording of her subsequent activities in the print work areas.

18      The respondent says that the applicant used one of the printers to undertake private work.  The respondent says that the applicant had been told that she was not to undertake private work using Signcraft equipment unless she had prior approval. The respondent says that previously the applicant had been told not to use the printer and that she was not trained on the equipment.  The respondent says the applicant damaged the printer and the repair cost $6,088.50.

19      On the balance of probabilities, I find that the applicant used a specialised printer for her personal use.  I find that the contract of employment clearly states that using equipment for personal use is grounds for termination of employment without notice, unless the use was agreed.  Given this, the applicant must have understood that she needed to have approval to use the printer.  I find that the applicant deliberately obscured the camera lenses so that she would not be observed using the equipment for personal use.

20      The respondent’s evidence is that on 3 August 2023 he received an email from Kent Knight of Image Sign Group Pty Ltd, informing him that the applicant had contacted him to undertake work for him that had been sourced through his communications with Signcraft.  Mr Knight had understood that the work undertaken by the applicant was being done as part of Signcraft’s services.  It was only discovered that the work had been undertaken by the applicant directly and independently of Signcraft, when Mr Knight requested that Signcraft rectify issues with the installation of the signs by the applicant.

21      The applicant says that she was engaged directly by Mr Knight following her response to a general invitation by Mr Knight to a number of service providers.

Consideration

22      The jurisdiction to enquire into and deal with an industrial matter is conferred by s 23(1) of the Industrial Relations Act 1979 (WA) to hear and determine a claim.  Section 29(1)(b)(ii) of the Act provides standing to an employee to bring a claim concerning entitlements under a contract of employment:  Matthews v Cool or Cosy Pty Ltd & Anor [2004] WASCA 114 (2004) 84 WAIG 2152.

23      The Full Bench in Reginald Simons v Business Computers International Pty Ltd (1985) 65 WAIG 2039 found that the jurisdiction of the Commission in matters pursuant to s 29(1)(b)(ii) of the Act is judicial:

The jurisdiction of the Commission which is founded by proceedings brought under section 29 (b) (ii) of the Act is judicial.  It is not arbitral or legislative.  The Commission’s jurisdiction is thus limited to the ascertainment of existing rights by a determination of whether or not an employee has been denied a benefit, not being a benefit under an award or an order, to which the employee is entitled under a contract of service.

24      An applicant making an application pursuant to s 29(b)(ii) of the Act must, therefore, establish that their claim is for a benefit to which he/she is entitled under his/her contract of employment.  The Commission must determine the terms of the contract of employment and decide whether the claim constitutes a benefit which has been denied under this contract, having regard to the obligations of the Commission to act according to equity, good conscience, and the substantial merits of the case (see Belo Fisheries v Froggett 63 WAIG 2394 ; see also Waroona Contracting v Usher (1984) 64 WAIG 1500 and Perth Finishing College Pty Ltd v Watts (1989) 69 WAIG 2307).

25      The meaning of ‘entitled’ in the context of the section must mean entitled as a matter of legal right, because it refers to benefits under the contract: Perth Finishing College Pty Ltd v Watts at 2313.

26      To establish that there is a claim for a benefit under the contract the terms of the contract must be considered.

27      The parties agree that there was a written contract dated 20 March 2023 and this document sets out the terms of employment of the applicant.

28      I am satisfied that the applicant has established that a written contract of employment applied and contained the following express terms:

a. The written contract of employment commenced on 24 February 2023;

b. The rate of pay is $30.00 per hour;

c. A probation period of three months from 24 February 2023 until 23 May 2023;

d. 20 days paid annual leave per year of service to be taken within one year of falling due;

e. 10 days paid personal or carer’s leave per year of service accrued on a pro-rata basis and any portion not taken is carried over each year; and

f. Additional two days’ unpaid carer’s leave per occasion an immediate family or household member requires care or support because of personal illness or injury or unexpected emergency.

29      It is the evidence of Signcraft that the term probation was understood to mean that the applicant was employed on a casual basis during a period of probation.  The payslips show that the category of employment as ‘casual’ from 18 February 2023 to 26 May 2023 and then the employment category recorded on the payslips changes to ‘full time’ from 3 June 2023.

30      The employment contract is dated 20 March 2023.  The commencement date of the contract is back dated to 24 February 2023.  The express terms of the written contract under the clause entitled ‘Employment Conditions’ on page 2, state that the applicant was engaged as a full time employee from the commencement date of 24 February 2023.

31      The applicant’s evidence is that she regularly raised the matters of the payslips stating she was ‘casual’ and not full time.  The applicant says she also raised the issues of the payslips omitting annual leave accruals, she was not paid for public holidays nor paid personal leave at the time of receiving the relevant payslips or taking the personal leave.

32      The respondent says that the applicant was told that she was employed as a causal and knew she was engaged on a casual basis during the three months of her probationary period.

33      Probation and casual are not synonyms.  An employee may be engaged on a permanent or ongoing employment contract and be on a period of probation.

34      The express terms of the written contract made between the parties on 20 March 2023 supersedes the contract made on 23 January 2023.

35      I find that in accordance with her contract of employment dated 20 March 2023 the applicant was entitled to paid annual leave per year of service.  The terms of the contract do not refer to an entitlement to the progressive accrual of the annual leave, nor do they refer to an entitlement to be paid any portion of annual leave accrued and not taken at the termination of the employment contract.

36      In Lai Corporation Pty Ltd v Steinberg (1986) 28 AILR 492, the Supreme Court held that a contractual entitlement to annual leave cannot be converted to a cash entitlement unless there is an express term in the contract that provides for the payment.

37      The applicant has not established that her contract of employment expressly provided for access to pro rata annual leave before completing one year of service, nor that annual leave may be paid out.

38      The Fair Work Act 2009 (Cth) (Fair Work Act) provides for annual leave minimum standards of employment and s 90 specifically sets out that any unused annual leave must be paid out at the end of employment.  The terms of the written contract do not provide for the provisions of the Fair Work Act to be read into the terms of the contract.  As such, it has not been established by the applicant that there is an entitlement or benefit under the contract of employment to annual leave prior to completing one year of service, nor to payment of any portion of leave untaken, that she has been denied.  The Commission does not have jurisdiction to enforce the provisions of the Fair Work Act.

39      The express terms of the written contract do not include any reference to public holidays.  The Fair Work Act provides for minimum standards for public holidays and s 116 specifically sets out the circumstances in which an employee absent from duty on a public holiday is to be paid.  The terms of the written contract do not provide for the provisions of the Fair Work Act to be read into the terms of the contract.  As such, it has not been established by the applicant that there is an entitlement or benefit under the contract of employment to payment of public holidays.  The Commission does not have jurisdiction to enforce the provisions of the Fair Work Act.

40      In the claim for personal and/or carer’s leave, I find that the contract of employment provided for paid leave to care for an immediate member of the applicant’s family or for the applicant’s illness and inability to attend the workplace.

41      Regarding the claim for payment in lieu of notice, I have listened to the evidence of the applicant and the respondent carefully.  I prefer the evidence of the respondent.  I find that the respondent advised the applicant to leave the workplace and return on the following working day with an adjusted attitude.  I find the applicant responded by effectively resigning and demanding her termination pay and a separation certificate.  The respondent subsequently discovered the applicant had misconducted herself in a manner that was in breach of her contract of employment during her employment.  The terms of her employment contract provided for her employment to be terminated without notice.

42      I am not satisfied that the applicant was entitled to be paid, but was denied, a contractual benefit by way of four weeks’ pay in lieu of notice.  I find the applicant effectively resigned from her employment on 31 July 2023 without notice.  In any event, the respondent had the ability to terminate her employment without notice given the misconduct of the applicant.

43      However, despite the applicant partly establishing she may have an entitlement to at least some benefit under her contract, and that with the submission of further evidence, established this benefit was denied, I do not consider I ought to make the orders sought by the applicant.  In my view the applicant’s conduct disqualifies her from the remedy she seeks because she does not come with ‘clean hands’.

Unclean Hands

44      The doctrine of unclean hands means that a party who seeks equitable relief and has themselves acted unconscionably in connection with the same subject matter out of which they claim a right to relief may be denied the relief sought because of that conduct.

45      In Civil Service Association of Western Australia Incorporated v Director General, Ministry of Justice [2003] WAIRC 08587; (2003) 94 WAIG 215 (CSA v Ministry of Justice), a matter concerning disciplinary proceedings concerning a government employee, the Commission considered the issue of whether the Commission’s jurisdiction has general equitable jurisdiction. Kenner C said:

[55] In relation to the nature of the Commission's jurisdiction, in response to submissions by the applicant, counsel for the respondent also submitted that the Commission's jurisdiction is statutory and there is no general equitable jurisdiction conferred upon the Commission or the Commission constituted as an Arbitrator under the Act.  Whilst it is trite to observe that the Commission is not a court of equitable jurisdiction, in my view, given that the touchstone of the Commission's jurisdiction is to enquire into and deal with industrial matters “in accordance with equity, good conscience and the substantial merits of the case” under s 26(1)(a) of the Act, it is appropriate for the Commission to have regard to relevant equitable principles, as part of “inquiring into and dealing with” an industrial matter.

[56] The injunction in s 26(1)(a), governs the manner of the exercise of the Commission's jurisdiction, and somewhat tritely, is not a source of power in itself.  However, what it does permit is the departure from strict legal entitlement, in circumstances where the equity and good conscience compels such a conclusion.  For example, in a contractual benefits claim, in circumstances where the applicant may be strictly entitled to a benefit under his or her contract of employment, but the circumstances of the case reveal that the applicant engaged in some form of misconduct or deceit in relation to the matter the subject of the claim, the Commission is empowered in my opinion, pursuant to s 26(1)(a), to deny an applicant relief.  This approach would appear to accord with the two important maxims of equity, they being that “he who seeks equity must do equity and that “he must also come with clean hands”.  In my opinion, there is nothing inconsistent with the Commission's jurisdiction, for the application of these broad principles, having regard to s 26(1)(a) of the Act.

46      In Charles (Carmelo) Parrella v FBM Corporation Pty Ltd [2012] WAIRC 00903; (2012) 92 WAIG 1988 (Parrella), in a claim for a denied contractual benefit, the Commission considered the question of an applicant’s conduct that caused loss and damage to an employer. Beech C said:

[9] Whether Mr Parrella acted in breach of his contract of employment will be an important consideration in both this Commission and in the Supreme Court proceedings.  It is directly raised in FBM’s Notice of Answer in this matter and it is central to the action taken by FBM in the Supreme Court.  Although this Commission will decide whether Mr Parrella has not been allowed by FBM benefits to which he is entitled under his contract of employment, his claim for an order that FBM pay him any benefits will be decided according to equity, good conscience and the substantial merits of the case (Sargant v Lowndes Lambert Australia Pty Ltd (2000) 81 WAIG 311; and the appeal which was dismissed:  [2001] WAIRC 02603; (2001) 81 WAIG 1149).  This means that if Mr Parrella did act in breach of his contract of employment and caused loss and damage to FBM, he does not come here with clean hands.  The Commission would be slow to order FBM to pay him a benefit due under the very contract of employment of which he himself was in breach which caused loss and damage to his former employer.

47      The terms of the applicant’s employment contract specifically addressed the issue of using the equipment of the business for personal work:

Termination

…

The company may terminate your employment at any time without notice if:

 ● ….

 ● ….

 ● Using company equipment for personnel [sic] use unless agreed otherwise with myself (Greg Morgan).

48      The contract of employment specifically references the use of company equipment for personal purposes.  The severity of the consequences for using company equipment without the agreement of the principal of the company clearly conveyed to the applicant the significance of such conduct.

49      The behaviour of the applicant in obscuring the lenses of the cameras and confirming the outcome of her efforts demonstrates the applicant’s concern should her subsequent activities in the print room be discovered.  The applicant went to considerable lengths to avoid detection and to deceive the respondent.  I find that the applicant’s conduct is not consistent with an employee’s duty of good faith to an employer.

50      In the matter of the use of confidential information by the applicant, I have listened carefully to the witness testimony of both the applicant and the respondent, and I have considered the documentary evidence submitted by the parties.  I prefer the evidence of the respondent and find that the applicant deliberately directed work meant for Signcraft to her own business operations.

51      The contract of employment expressly provides that information relating to the business is confidential and is the sole property of Signcraft.  The contract states that the applicant shall not either during or after employment divulge or use confidential information for her own benefit or another benefit without the prior consent of the respondent.  The applicant’s use of confidential information of the respondent to procure a benefit for herself and her action are clearly in breach of the expressed terms of the contract of employment.

52      I find that the applicant engaged in misconduct in breach of the terms of the contract of employment and, consistent with the decisions in CSA v Ministry of Justice and Parrella, ought to be denied relief sought.

53      Given this conclusion I hereby dismiss the application.