David John Hignett -v- Joburne Pty Ltd T/a Blackburn Real Estate

Document Type: Decision

Matter Number: FBA 15/2000

Matter Description: Against the decision in Complaint No 62/1999 given on 1/3/2000

Industry:

Jurisdiction: Full Bench

Member/Magistrate name: Full Bench His Honour The President P J Sharkey Chief Commissioner W S Coleman Senior Commissioner G L Fielding

Delivery Date: 1 Nov 2000

Result:

Citation: 2000 WAIRC 01598

WAIG Reference: 81 WAIG 30

DOC | 72kB
2000 WAIRC 01598

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

PARTIES DAVID JOHN HIGNETT
APPELLANT
-V-

JOBURNE PTY LTD
RESPONDENT
CORAM FULL BENCH
HIS HONOUR THE PRESIDENT P J SHARKEY
CHIEF COMMISSIONER W S COLEMAN
SENIOR COMMISSIONER G L FIELDING
DELIVERED THURSDAY, 14 DECEMBER 2000
FILE NO/S FBA 15 OF 2000
CITATION NO. 2000 WAIRC 01598

_______________________________________________________________________________
Decision Appeal dismissed.
Appearances
APPELLANT MR B F STOKES, AS AGENT

RESPONDENT MR D M JONES, AS AGENT

_______________________________________________________________________________

Reasons for Decision

THE PRESIDENT:

INTRODUCTION


1 This is an appeal by the abovenamed appellant, Mr David John Hignett, against the whole of the decision of the learned Industrial Magistrate, sitting in the Industrial Court at Perth, and brought pursuant to s.84 of the Industrial Relations Act 1979 (as amended) (hereinafter referred to as “the Act”) whereby His Worship, on 1 March 2000, dismissed a complaint by Mr Hignett against the abovenamed respondent, Joburne Pty Ltd (hereinafter referred to as “Joburne”).
GROUNDS OF APPEAL
2 By a Notice of Appeal filed 22 March 2000, the appellant appeals to the Full Bench on the following grounds which were amended at the hearing:-

“A. The learned Magistrate erred in law and fact in finding that the Applicant's entitlement to paid annual leave pursuant to Ss. 18(1), 23(1) & 24(2) of the Minimum Conditions of Employment Act 1993 (MCE) was to be paid at rate of $0.00 contrary to clause 12(b) of the contract of employment which as at the 21st September, 1998 gave the Appellant an entitlement of $597.00. As it was common ground that the Appellant commenced employment on the 4th December, 1992, the learned Magistrate further failed to find that the Appellant’s entitlement to paid annual leave under the MCE was $13,850.40 ($597.00 x 5.8 yrs x 4 weeks).

B. The learned Magistrate misdirected himself in that he misapplied the ratio in the case of John Bombak v. Didco Pty. Ltd. t/as Nik Vargo Real Estate [1995] WAIG 96, in finding that pursuant to the contract of employment as at the 21st September, 1998 (the agreed date of termination of the contract), the Appellant had entitlement to no commission contrary to clause 12(b) thereof and contrary to the fact that due to a settlement set for the 22nd September, 1998, the Appellant was upon termination entitled to $597.00 unpaid commission.

BA: The learned Magistrate erred in law & fact in failing to apply the Pay Order 1998 applicable on 21/9/98 and adopt that minimum rate of pay of $335 to the 19.12 (or 15) weeks of accrued annual leave (from the 4/12/92 or 1/12/93 respectively) of $6,405.20.

C. ALTERNATIVELY:

(i) The learned Magistrate erred in law and fact in finding that the relevant time for determining the Appellant’s entitlement to paid annual salary taken upon termination was the sum payable on the last day of employment and not the last full pay period prior to termination. Further he misdirected himself in failing to find that the correct multiplicand was the sum paid on the pay day prior to termination namely $1,940.00 paid on the 17th September, 1998 the last Thursday pay day. The learned Magistrate should have found the Appellant entitled to $1,940.00 x 5.8 years x 4 weeks = $45,008.00 gross.

(ii) The learned Magistrate failed to find that it was a term of contract, implied by practice and acquiescence between the parties, that pay days were every Thursday provided commission was then payable.

RELIEF SOUGHT:

A. A declaration that as at the 21st September, 1998 the Appellant had an entitlement to unpaid commission of $597.00;
B. A declaration that this sum was the correct multiplicand for calculating the Appellant’s paid annual leave;
C. An Order that the Respondent pay the Appellant the sum of $13,850.40 gross by way of accrued pro rata annual leave pursuant to the MCE.

ALTERNATIVELY:

D. A declaration that as at the 21st September, 1998 it being a day which fell between scheduled pay days, the relevant pay period pursuant to S. 18 (1) MCE was the last full pay period which preceeded (sic) termination, namely the week ending the 17th September, 1998;
E. A declaration that the correct weekly rate for the purposes of calculating the Appellant’s paid annual leave was $1,940.00;
F. An Order that the Respondent pay the Appellant $45,008.00 by way of annual leave pursuant to the MCE.

IN EITHER EVENT:

G. Whether the sum ordered be pursuant to paragraph C or F or some other sum, if any sum is ordered it attract 6% simple interest from the date of termination until the date of payment pursuant to S. 32 of the Supreme Court Act, and
H. Such other orders as the Full Bench deems appropriate.”

BACKGROUND
3 Mr Hignett, by virtue of a complaint brought under s.83 of the Act, alleged that, on or about 30 September 1998 at Perth, Joburne, being a party bound by “Clause (sic) ... of the said Act”, namely the Minimum Conditions of Employment Act 1993, (hereinafter referred to as “the MCE Act”) failed to pay Mr Hignett annual leave as prescribed by the MCE Act. The complaint contains no particulars of the amount. Mr Hignett claimed orders for the sum of $25,000.00 to be paid, together with interest at the rate of 6% per annum as prescribed by s.32 of the Supreme Court Act 1935, and costs (see page 3 of the appeal book (hereinafter referred to as “AB”). The matter came before the Industrial Court at Perth pursuant to s.7 of the MCE Act, which reads as follows:-
“7. Enforcement of minimum conditions
A minimum condition of employment may be enforced — 
(a) where the condition is implied in a workplace agreement, under Division 1 of Part 5 of the Workplace Agreements Act 1993;
(b) where the condition is implied in an award, under Part III of the Industrial Relations Act 1979; or
(c) where the condition is implied in a contract of employment, under section 83 of the Industrial Relations Act 1979 as if it were a provision of an award, industrial agreement or order other than an order made under section 32 or 66 of that Act.”

4 The Industrial Court had jurisdiction by virtue of s.7(c) of the MCE Act.
5 The matter was heard and determined and reasons for decision issued on 24 November 1999.
6 The pivotal issue at first instance was whether or not Joburne was bound by the MCE Act. The legislation provides for regulations and, within the regulations, in Schedule 1, Item 1, under the heading “Persons who are not employees for the purposes of the Act”, there is prescribed as follows:-
“Persons paid wholly by commission
Persons whose services are remunerated wholly by commission or percentage reward.”

7 Accordingly, those people whose services are wholly (my emphasis) remunerated by way of commission or percentage reward are not covered by the MCE Act, His Worship found.
8 By particulars of defence it was admitted that Joburne employed Mr Hignett as a real estate salesman in its business as a real estate agent. Joburne’s defence was that Mr Hignett was, at all material times, remunerated on a commission only basis and was not subject to the provisions of the MCE Act. Joburne also asserted that, being a person so remunerated, Mr Hignett cannot be entitled to monies claimed as annual leave benefits pursuant to the MCE Act (see page 5(AB)).
9 There was evidence for the appellant at first instance from Mr David John Hignett, on his own behalf and evidence for the respondent from Mr Robert Johnston, a Director of Joburne and its Sales Director.
10 The main issue before the Industrial Court was whether Mr Hignett was the employee of Joburne as a real estate agent paid or wholly remunerated by commission or percentage reward or whether he was not wholly so remunerated.
11 Mr Hignett was employed as a real estate representative, registered under the Real Estate and Business Agents Act 1978, from 4 December 1992 to 21 September 1998 (see page 53(AB)). His employment ended on 21 September 1998 when he handed in his notice of resignation and it was accepted. He was employed pursuant to a signed written agreement of employment dated 1 July 1997 (see pages 13-21(AB)). There were, His Worship found, other agreements made verbally between the parties which regulated the terms and conditions of employment.
12 Contributions were made by the employer to an approved superannuation fund for his employment.
13 It was submitted to His Worship that superannuation payments which were made to Mr Hignett formed part of his income. He rejected that submission, saying that it clearly does not. His Worship held that a superannuation payment is one made by virtue of a statutory obligation, and does not form part of income. Superannuation has never formed part of income and it simply did not form part of income in this particular situation.
14 That finding was correctly made, having regard to the decision of the Full Bench in Thompson v Gregmaun Farms Pty Ltd 80 WAIG 1733 (FB). Indeed, having regard to that decision, I do not understand how the submission could be properly made.
15 There was another payment made to Mr Hignett called “The Holiday Inn Park Suites” payment. This was a commission payment. His Worship so found.
16 If the company retained property management of a property after it was sold, then the representatives were paid an amount equal to one week’s rent. Bonuses were paid calculated on the amount of gross sales made by a representative and these were paid from time to time.
17 His Worship also found that the rental payments, in his view, were commission payments because they were based on a pro rata basis and, in the case of an existing rental client, based on 1/52nd of the year’s rental paid. In the case of new rentals clients, it was based on 2/52nd’s of the year’s rental paid. Once again, the quantum of that payment was calculated on a pro rata basis.
18 His Worship did not accept the submission of Mr Clohessy, the advocate for Mr Hignett at first instance, that these payments were not commission payments, because of their calculation on the basis mentioned.
19 His Worship observed that Mr Johnston’s evidence was quite clear in that regard and he had no difficulty with it whatsoever. Further, he observed that even Mr Hignett had some difficulties expressing a contrary view when giving his evidence in relation to that matter.
20 Mr Hignett received five such payments totalling $1,600.00, based on sales commission. Bonus payments were flat payments, he said. His telephone charges were refunded by his employer. His gross salary was $12,419.00. It is clear that annual leave was not discussed with him and no agreement was entered into as to annual leave. He agreed that what he was paid in total was:-
(a) Superannuation contributions;
(b) Commissions on sales of property;
(c) The rental payments for rental properties;
(d) A telephone allowance;
(e) Five sales bonuses;
and no other monies, including no annual leave payments. He earned no bonuses in August or September 1998 and no commission in September 1998, including the week of his dismissal. That also was the gist of evidence and/or not contradicted by Mr Johnston.
21 The telephone charge reimbursement payments made to Mr Hignett, His Worship held, were quite clearly not payments for remuneration, but simply reimbursements made by Joburne to Mr Hignett for expenses incurred by him; these were the defraying of Mr Hignett’s costs and not income at all.
22 His Worship found that, substantially, the remuneration to Mr Hignett by Joburne was by way of commission on sales which he achieved, but there were other payments which he received and those were the matters in dispute before His Worship.
23 His Worship then considered the payment of a bonus described in Exhibit 3 as a sales award or bonus prize. The difficulty with that was that it was to be paid only as a consequence of commission having been earned. It was, as His Worship said, a piggy back commission. Mr Johnston said in evidence that there was no particular basis of arriving at the figure paid, it being a flat payment. There was a flat payment made on achieving a particular figure of $15,000.00, $20,000.00 or $30,000.00 with no increment or increases. There was no “pro rataing”.
24 Although it was conceded that the bonus payment was based on commission paid, His Worship held that it was a payment over and above the commission which was not based on any pro rata payment. The concession made by Joburne was that the payment was not a pro rata payment. This therefore, His Worship held, was correctly made and His Worship accepted the submissions made by Mr Clohessy that the payments were not commission payments.
25 His Worship then applied the ratio in John Bombak v Didco Pty Ltd T/A Nik Varga Real Estate (1995) 75 WAIG 2314 (FB) and correctly held that the MCE Act applied to Mr Hignett’s employment.
26 There was no evidence before His Worship in relation to the issue of the rate that is payable for annual leave.
27 His Worship gave his ex tempore reasons for decision further, on 1 March 2000. He held that Mr Hignett did not have an entitlement to annual leave payments because there was no rate upon which any such entitlement could be based. He therefore found that the complaint was not proven and dismissed it.
ISSUES AND CONCLUSIONS
28 The question before the Commission was at first whether Mr Hignett was entitled to annual leave payments for service from 1 December 1993 to 21 September 1998 pursuant to the provisions of the MCE Act. Mr Jones, in his final submissions for the respondent, conceded that the MCE Act applied to Mr Hignett and conceded that there is some entitlement to annual leave (see page 41 of the transcript at first instance (hereinafter referred to as “TFI”)). It was also conceded by Mr Clohessy, who appeared for the complainant at first instance, (see page 42(TFI)) that the only claim for annual leave was for the period 1 December 1993 to 1 December 1997, which was not the period pleaded in the complaint. As Mr Jones submitted, there were no sales in August or September and nothing was payable to Mr Hignett. Mr Clohessy also conceded that a claim did not lie for more than $1,940.00 (see page 51(TFI)).
29 It is, of course, the case that Clause 13 of the contract of employment provided that Mr Hignett should be entitled to leave, including annual leave, as follows (see page 15(AB)):-
“The Representative shall be entitled to the following leave:
(a) Unpaid annual recreation leave of four weeks after each completed year of continuous service with the Agent. Such leave shall be taken as mutually agreed between the parties.
(b) (i) Unpaid sick leave not exceeding ten days per year of service.
(ii) Additional unpaid sick leave may be granted at the discretion of the Agent.
(c) Such other unpaid compassionate leave as may be granted by the Agent.”

30 The relevant provisions of the MCE Act are s.5(1), s.11, s.18(1) and s.24(2).
31 The MCE Act prescribes an entitlement to paid annual leave (see s.23). That provision applies, in the absence of a more favourable condition in the contract, which absence is the fact (see s.5 of the MCE Act). Accordingly, for those reasons, any entitlement to annual leave had to be a minimum of four weeks per year, paid.
32 It is quite clear that Mr Hignett was substantially remunerated by way of commission payments on sales achieved (see page 8(AB)) and by other payments, one of which was a flat payment which allowed Mr Hignett to claim the benefits of the MCE Act (see page 9(AB)), as was conceded.
33 The MCE Act provides, by s.18(1), that when annual leave is paid, the 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 the workplace agreement, award or contract of employment. The leave was taken effectively on the date of termination, being 21 September 1998.
34 An amount of commission in the pay week ending 17 September 1998 was not the rate for the purposes of calculating payment for annual leave pursuant to the MCE Act. The rate to be taken into account was the rate which was applicable on 21 September 1998, being the date of termination and the day upon which payment of leave was due (see page 11(AB)).
35 It was common ground between the parties that a payment of commission became due to Mr Hignett on 22 September 1998, but this was subsequent to his dismissal and fell outside the period properly the subject of the complaint (see page 89(AB)).
Ground A
36 This ground contends that the Industrial Magistrate was in error in not finding that Mr Hignett was entitled to an amount of $13,850.40, being an annual leave benefit based on 5.8 years of service at $597.00 per week. There is no substance in that ground. Leave must be paid for at the rate which the employee would have received at the time when the leave was taken. The only finding able to be made by His Worship was that the leave became due and payable on the date of Mr Hignett’s termination.
37 There is no evidence that the annual leave benefit was one based upon 5.8 years’ service at the rate of $597.00. There is no authority for the proposition that the full entitlement to leave must be paid at the rate of remuneration due after termination. Indeed, the fact that an amount of commission was due and payable at that time is not evidence that that was the amount which constituted remuneration for the purpose of calculating annual leave.
38 Further, it could not, being monies payable after the termination of the contract of employment, be brought into account in calculating the amount of any annual leave payment due. In any event, an amount of annual leave calculated at a pay rate less than $335.00 per week would not be lawfully payable under the MCE Act.
Ground B
39 There is no merit in this ground. On the agreed date of termination, there were, on the evidence, no monies due and payable to Mr Hignett by way of remuneration upon which a proper calculation of annual leave might be made. Further, there was no evidence that an amount different from the amount of $335.00 referred to hereinafter might be used as the basis for calculating the quantum of any annual leave payment.
Ground BA
40 The commission paid in the week ending 17 September 1998 (being Thursday, the agreed pay day) cannot be the rate required to be paid by s.18(1) of the MCE Act, since it was not the rate at which Mr Hignett would have received as his payment at the time when the leave was taken.
41 Clearly, as Joburne accepts, in the absence of any other rate under the contract of employment, s.5 and s.11 of the MCE Act combined to require Joburne to pay Mr Hignett $335.00 as a minimum rate of pay which is the rate for the purposes of s.18(1) of the MCE Act. This was not the subject of any submission to His Worship on behalf of the applicant at first instance, nor to the Full Bench on behalf of the appellant. The Full Bench can take no account of it as an argument (see Metwally v University of Wollongong (1985) 60 ALR 68 (HC)), as Mr Jones, for Joburne submitted. That disposes of Ground BA.
Further
42 There was no evidence before the Court (see exhibit 2 and pages 55, 61-64, 71 and 74(AB)) to support a conclusion that Mr Hignett is entitled to 5.8 years’ accumulated annual leave benefits. The evidence was that the bonus payments were payable in flat rate form only since 1996, so that annual leave entitlements accrued from that date only, in any event.
FINALLY
43 There were no submissions on behalf of the appellant directed otherwise to the support of the grounds.
44 I would not be willing to accede to the submission that, if there was not sufficient evidence to prove each ingredient of the complaint, then it should be remitted back to His Worship for further hearing and determination. If there was not sufficient evidence to prove all ingredients of the complaint, then it should have been, and indeed was, correctly dismissed.
45 His Worship, by virtue of s.7 of the MCE Act and s.83 of the Act, exercises a jurisdiction which can result in the imposition of a penalty upon complaint. If His Worship was not satisfied that there was sufficient evidence and he was right in so finding, then he was not in error and the appeal cannot succeed.
46 I have considered all of the evidence and all of the submissions.
47 No ground of appeal is made out. His Worship did not err as alleged in the grounds of appeal. For those reasons, I would dismiss the appeal.

CHIEF COMMISSIONER W S COLEMAN:
48 I have had the advantage of reading the drafts of reasons for decision prepared by the Hon. President and the Senior Commissioner. I agree that the appeal should be dismissed.
49 Central to the determination of the matter before the learned Industrial Magistrate was whether the appellant was a person whose services were remunerated wholly by commission or percentage reward for the purposes of the Minimum Conditions of Employment Act, 1993. In my view the learned Industrial Magistrate correctly found that the superannuation payment made under a statutory obligation was not part of income and that remuneration received under an arrangement involving the Holiday Inn Park Suites (HIPS) scheme and rental (REMS) payments were clearly commissions. Where he erred in my view was in determining that ‘sales awards, bonus prize’ (Exhibit 3), fell outside a commission payment. This opened the “floodgates” with respect to the calculation of payment for annual leave.
50 The characterisation of the sales awards of bonus prize as a “piggy-back commission” correctly identifies the nature of the payment. However the fact that this additional level of remuneration was a flat payment and was not calculated on a pro rata basis does not in my view render the circumstances of employment not wholly by commission or percentage reward. The sales award albeit a flat payment was dependent on the level of gross income derived from sales secured by the salesperson. It was wholly dependent on the attainment of a threshold level of income calculated as a percentage reward. Within the context of the Minimum Conditions of Employment Act and indeed in commerce generally “commission” comprehends the payment on the basis other than a percentage reward or pro rata payment. It is the attainment of a sale which attracts the payment be that on a flat fee or percentage of the price. Here there was no entitlement to payment other than by the outcome of sales. That was clearly the intention of the parties; the nature of the additional flat payment on top of the percentage reward did not alter that nor did it bring the arrangement within the scope of the Minimum Conditions of Employment Act for the calculation of annual leave.
51 In my view the outcome reached by the learned Industrial Magistrate although arrived at for different reasons should not be disturbed.

SENIOR COMMISSIONER G L FIELDING:
52 I have had the advantage of reading in draft form the reasons for decision prepared by the President. I agree that the appeal should be dismissed. The learned Industrial Magistrate was right to dismiss the complaint, but did so for the wrong reasons.
53 In my opinion the Appellant was not, on the evidence, an employee for the purposes of the Minimum Conditions of Employment Act 1993. Consequently, the complaint that the Respondent failed to pay the Appellant annual leave as prescribed by that Act was not well founded.
54 A person only has an entitlement to the benefits of annual leave prescribed by the Minimum Conditions of Employment Act 1993 if he is an employee for the purposes of that Act. Section 3 of the Act excludes from the definition of an employee “a class of persons prescribed by the Regulations as persons not to be treated as employees for the purposes” of the Act. The Minimum Conditions of Employment Regulations 1993 provide that “persons whose services are remunerated wholly by commission or percentage reward” are a class of persons not to be treated as employees for these purposes.
55 It is common ground that the Appellant was at all material times employed by the Respondent as a commission sales representative. In addition to the remuneration specified in his written contract of employment, which remuneration the learned Industrial Magistrate correctly held to be commission, the evidence discloses that the Appellant from time to time received monetary bonuses or prizes. These bonuses were paid apparently pursuant to a verbal arrangement between the Appellant and the Respondent. Under this arrangement sales personnel were awarded a bonus for achieving a nominated sales target in any one month. The magnitude of the bonus depended upon the level of the sales achieved by the salesmen in each month. Needless to say the higher the sales income in that month the higher the bonus. The bonus was not fixed by reference to a percentage of the sales income, as was the case for the regular commission paid to the Appellant, but a fixed sum which varied depending on the range or level of gross income from sales achieved by each salesman. The evidence does not reveal much about the nature of the prizes. In the normal course of events I would have thought a prize was in the nature of an ex gratia payment, and thus not to be considered as being remuneration in the context of the Act. However, such evidence as there is suggests that prizes were earnt on much the same basis as the bonuses.
56 The learned Industrial Magistrate thought that these additional bonuses or prizes “could almost be seen as a sort of piggyback commission” or “an additional commission” but in the end was persuaded that they were not in the nature of a commission because there was “no pro rataering” on the level of sales income achieved by salesmen, in this case the Appellant.
57 In my assessment that was an erroneous conclusion. Such evidence as there was suggests that the additional payments made to the Appellant by way of bonuses and prizes were as the learned Industrial Magistrate postulated indeed in the nature of additional commission. They were payments determined by and based on results. Such evidence as there was suggests that the magnitude of those additional payments varied with the level of income from sales, albeit on the basis of scales of income rather than as a direct percentage of the income. They were in a very real sense pro rata payments because they varied with the level of income from sales effected on behalf of the Respondent. Instead of being based on a percentage of the value of the sales they were based on a scale which in turn was regulated by the value of the sales. They were only “flat payments” to the extent that they were based on a particular scale.
58 I adhere to the view I expressed in Oates v Sanders Executive Pty Ltd (1999) 79 WAIG 3543 at 3545 that a commission can take many forms. It does not have to be a percentagebased reward. Indeed, that is evident from the provisions of the Minimum Conditions of Employment Regulations 1993 which clearly imply that remuneration by commission need not involve remuneration by percentage reward. As explained in Drielsma v Manifold [1894] 3 Ch 100 the expression “commission” is not a term of art but is “primâ facie the payment made to an agent for agency work, usually according to a scale  it may be an ad valorem scale, but not necessarily an ad valorem scale” (per Davey LJ at 107). In my assessment that aptly fits the description of the additional payments in question on this occasion.
59 The learned Industrial Magistrate was, in my view, correct for the reasons he gave in holding that superannuation entitlements, the rental payments and telephone allowance did not constitute remuneration for the purposes of the Minimum Conditions of Employment Regulations 1993. In the circumstances it follows that the learned Industrial Magistrate was wrong to conclude that the Appellant was not remunerated wholly by remuneration or by percentage reward. On the contrary the Appellant, on the evidence, was, in my opinion, wholly remunerated by commission or by percentage reward at least for the purposes of the Minimum Conditions of Employment Regulations 1993.
60 Much of the argument on the appeal centred on the rate at which the Appellant was to be paid for his alleged annual leave entitlement under the Act. In my assessment that argument served only to show that the Appellant was remunerated wholly by commission or percentage reward and not by any other means. Section 18(1) in conjunction with s 24 of the Minimum Conditions of Employment Act 1993 provides that payment for untaken leave is to be paid not at the rate when the leave accrued but at the rate applicable to the employee under his contract of employment at the time the leave is taken. It does not follow that because the employee was not due to be paid any remuneration at the time of taking leave, his rate of pay was nil. The logical consequence of that proposition is that the employee was employed to work for nothing. Clearly that was not the case for the Appellant. Rather, he was employed for reward on the basis of receiving a proportion of the commission received by the Respondent through his efforts. In effect that is his rate of pay, albeit that it is impracticable to be used in calculating a payment for annual leave. Perhaps that is why the legislation excludes persons remunerated wholly by commission or percentage reward from the operation of the Act.
61 It follows in my view that the appeal should be dismissed. The Appellant was not an employee for the purposes of the Minimum Conditions of Employment Act 1993.

THE PRESIDENT:

62 For those reasons, the appeal is dismissed.

Order accordingly
David John Hignett -v- Joburne Pty Ltd T/a Blackburn Real Estate

 

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

 

PARTIES DAVID JOHN HIGNETT

APPELLANT

 -v-

 

 JOBURNE PTY LTD

RESPONDENT

CORAM FULL BENCH

  HIS HONOUR THE PRESIDENT P J SHARKEY

  CHIEF COMMISSIONER W S COLEMAN

  SENIOR COMMISSIONER G L FIELDING

DELIVERED THURSDAY, 14 DECEMBER 2000

FILE NO/S FBA 15 OF 2000

CITATION NO. 2000 WAIRC 01598

 

_______________________________________________________________________________

Decision  Appeal dismissed.

Appearances

Appellant   Mr B F Stokes, as agent

 

Respondent   Mr D M Jones, as agent

 

_______________________________________________________________________________

 

Reasons for Decision

 

THE PRESIDENT:

 

INTRODUCTION

 

 

1                 This is an appeal by the abovenamed appellant, Mr David John Hignett, against the whole of the decision of the learned Industrial Magistrate, sitting in the Industrial Court at Perth, and brought pursuant to s.84 of the Industrial Relations Act 1979 (as amended) (hereinafter referred to as “the Act”) whereby His Worship, on 1 March 2000, dismissed a complaint by Mr Hignett against the abovenamed respondent, Joburne Pty Ltd (hereinafter referred to as “Joburne”).

GROUNDS OF APPEAL

2                 By a Notice of Appeal filed 22 March 2000, the appellant appeals to the Full Bench on the following grounds which were amended at the hearing:-

 

  A. The learned Magistrate erred in law and fact in finding that the Applicant's entitlement to paid annual leave pursuant to Ss. 18(1), 23(1) & 24(2) of the Minimum Conditions of Employment Act 1993 (MCE) was to be paid at rate of $0.00 contrary to clause 12(b) of the contract of employment which as at the 21st September, 1998 gave the Appellant an entitlement of $597.00.  As it was common ground that the Appellant commenced employment on the 4th December, 1992, the learned Magistrate further failed to find that the Appellant’s entitlement to paid annual leave under the MCE was $13,850.40 ($597.00 x 5.8 yrs x 4 weeks).

 

 B. The learned Magistrate misdirected himself in that he misapplied the ratio in the case of John Bombak v. Didco Pty.  Ltd. t/as Nik Vargo Real Estate [1995] WAIG 96, in finding that pursuant to the contract of employment as at the 21st September, 1998 (the agreed date of termination of the contract), the Appellant had entitlement to no commission contrary to clause 12(b) thereof and contrary to the fact that due to a settlement set for the 22nd  September, 1998, the Appellant was upon termination entitled to $597.00 unpaid commission.

 

 BA: The learned Magistrate erred in law & fact in failing to apply the Pay Order 1998 applicable on 21/9/98 and adopt that minimum rate of pay of $335 to the 19.12 (or 15) weeks of accrued annual leave (from the 4/12/92 or 1/12/93 respectively) of $6,405.20.

 

  C. ALTERNATIVELY:

 

  (i) The learned Magistrate erred in law and fact in finding that the relevant time for determining the Appellant’s entitlement to paid annual salary taken upon termination was the sum payable on the last day of employment and not the last full pay period prior to termination.  Further he misdirected himself in failing to find that the correct multiplicand was the sum paid on the pay day prior to termination namely $1,940.00 paid on the 17th September, 1998 the last Thursday pay day.  The learned Magistrate should have found the Appellant entitled to $1,940.00 x 5.8 years x 4 weeks = $45,008.00 gross.

 

  (ii) The learned Magistrate failed to find that it was a term of contract, implied by practice and acquiescence between the parties, that pay days were every Thursday provided commission was then payable.

 

  RELIEF SOUGHT:

 

  A. A declaration that as at the 21st September, 1998 the Appellant had an entitlement to unpaid commission of $597.00;

  B. A declaration that this sum was the correct multiplicand for calculating the Appellant’s paid annual leave;

  C. An Order that the Respondent pay the Appellant the sum of $13,850.40 gross by way of accrued pro rata annual leave pursuant to the MCE.

 

  ALTERNATIVELY:

 

  D. A declaration that as at the 21st September, 1998 it being a day which fell between scheduled pay days, the relevant pay period pursuant to S. 18 (1) MCE was the last full pay period which preceeded (sic) termination, namely the week ending the 17th September, 1998;

  E. A declaration that the correct weekly rate for the purposes of calculating the Appellant’s paid annual leave was $1,940.00;

  F. An Order that the Respondent pay the Appellant $45,008.00 by way of annual leave pursuant to the MCE.

 

  IN EITHER EVENT:

 

  G. Whether the sum ordered be pursuant to paragraph C or F or some other sum, if any sum is ordered it attract 6% simple interest from the date of termination until the date of payment pursuant to S. 32 of the Supreme Court Act, and

  H. Such other orders as the Full Bench deems appropriate.”

 

BACKGROUND

3                 Mr Hignett, by virtue of a complaint brought under s.83 of the Act, alleged that, on or about 30 September 1998 at Perth, Joburne, being a party bound by “Clause (sic) ... of the said Act”, namely the Minimum Conditions of Employment Act 1993, (hereinafter referred to as “the MCE Act”) failed to pay Mr Hignett annual leave as prescribed by the MCE Act.  The complaint contains no particulars of the amount.  Mr Hignett claimed orders for the sum of $25,000.00 to be paid, together with interest at the rate of 6% per annum as prescribed by s.32 of the Supreme Court Act 1935, and costs (see page 3 of the appeal book (hereinafter referred to as “AB”).  The matter came before the Industrial Court at Perth pursuant to s.7 of the MCE Act, which reads as follows:-

  7. Enforcement of minimum conditions

  A minimum condition of employment may be enforced  

  (a) where the condition is implied in a workplace agreement, under Division 1 of Part 5 of the Workplace Agreements Act 1993;

  (b) where the condition is implied in an award, under Part III of the Industrial Relations Act 1979; or

   (c) where the condition is implied in a contract of employment, under section 83 of the Industrial Relations Act 1979 as if it were a provision of an award, industrial agreement or order other than an order made under section 32 or 66 of that Act.”

 

4                 The Industrial Court had jurisdiction by virtue of s.7(c) of the MCE Act.

5                 The matter was heard and determined and reasons for decision issued on 24 November 1999.

6                 The pivotal issue at first instance was whether or not Joburne was bound by the MCE Act.  The legislation provides for regulations and, within the regulations, in Schedule 1, Item 1, under the heading “Persons who are not employees for the purposes of the Act”, there is prescribed as follows:-

  Persons paid wholly by commission

  Persons whose services are remunerated wholly by commission or percentage reward.”

 

7                 Accordingly, those people whose services are wholly (my emphasis) remunerated by way of commission or percentage reward are not covered by the MCE Act, His Worship found.

8                 By particulars of defence it was admitted that Joburne employed Mr Hignett as a real estate salesman in its business as a real estate agent.  Joburne’s defence was that Mr Hignett was, at all material times, remunerated on a commission only basis and was not subject to the provisions of the MCE Act.  Joburne also asserted that, being a person so remunerated, Mr Hignett cannot be entitled to monies claimed as annual leave benefits pursuant to the MCE Act (see page 5(AB)).

9                 There was evidence for the appellant at first instance from Mr David John Hignett, on his own behalf and evidence for the respondent from Mr Robert Johnston, a Director of Joburne and its Sales Director.

10              The main issue before the Industrial Court was whether Mr Hignett was the employee of Joburne as a real estate agent paid or wholly remunerated by commission or percentage reward or whether he was not wholly so remunerated.

11              Mr Hignett was employed as a real estate representative, registered under the Real Estate and Business Agents Act 1978, from 4 December 1992 to 21 September 1998 (see page 53(AB)).  His employment ended on 21 September 1998 when he handed in his notice of resignation and it was accepted.  He was employed pursuant to a signed written agreement of employment dated 1 July 1997 (see pages 13-21(AB)).  There were, His Worship found, other agreements made verbally between the parties which regulated the terms and conditions of employment.

12              Contributions were made by the employer to an approved superannuation fund for his employment.

13              It was submitted to His Worship that superannuation payments which were made to Mr Hignett formed part of his income.  He rejected that submission, saying that it clearly does not.  His Worship held that a superannuation payment is one made by virtue of a statutory obligation, and does not form part of income.  Superannuation has never formed part of income and it simply did not form part of income in this particular situation.

14              That finding was correctly made, having regard to the decision of the Full Bench in Thompson v Gregmaun Farms Pty Ltd 80 WAIG 1733 (FB).  Indeed, having regard to that decision, I do not understand how the submission could be properly made.

15              There was another payment made to Mr Hignett called “The Holiday Inn Park Suites” payment.  This was a commission payment.  His Worship so found. 

16              If the company retained property management of a property after it was sold, then the representatives were paid an amount equal to one week’s rent.  Bonuses were paid calculated on the amount of gross sales made by a representative and these were paid from time to time.

17              His Worship also found that the rental payments, in his view, were commission payments because they were based on a pro rata basis and, in the case of an existing rental client, based on 1/52nd of the year’s rental paid.  In the case of new rentals clients, it was based on 2/52nd’s of the year’s rental paid.  Once again, the quantum of that payment was calculated on a pro rata basis.

18              His Worship did not accept the submission of Mr Clohessy, the advocate for Mr Hignett at first instance, that these payments were not commission payments, because of their calculation on the basis mentioned.

19              His Worship observed that Mr Johnston’s evidence was quite clear in that regard and he had no difficulty with it whatsoever.  Further, he observed that even Mr Hignett had some difficulties expressing a contrary view when giving his evidence in relation to that matter.

20              Mr Hignett received five such payments totalling $1,600.00, based on sales commission.  Bonus payments were flat payments, he said.  His telephone charges were refunded by his employer.  His gross salary was $12,419.00.  It is clear that annual leave was not discussed with him and no agreement was entered into as to annual leave.  He agreed that what he was paid in total was:-

(a) Superannuation contributions;

(b) Commissions on sales of property;

(c) The rental payments for rental properties;

(d) A telephone allowance;

(e) Five sales bonuses;

and no other monies, including no annual leave payments.  He earned no bonuses in August or September 1998 and no commission in September 1998, including the week of his dismissal.  That also was the gist of evidence and/or not contradicted by Mr Johnston.

21              The telephone charge reimbursement payments made to Mr Hignett, His Worship held, were quite clearly not payments for remuneration, but simply reimbursements made by Joburne to Mr Hignett for expenses incurred by him; these were the defraying of Mr Hignett’s costs and not income at all.

22              His Worship found that, substantially, the remuneration to Mr Hignett by Joburne was by way of commission on sales which he achieved, but there were other payments which he received and those were the matters in dispute before His Worship.

23              His Worship then considered the payment of a bonus described in Exhibit 3 as a sales award or bonus prize.  The difficulty with that was that it was to be paid only as a consequence of commission having been earned.  It was, as His Worship said, a piggy back commission.  Mr Johnston said in evidence that there was no particular basis of arriving at the figure paid, it being a flat payment.  There was a flat payment made on achieving a particular figure of $15,000.00, $20,000.00 or $30,000.00 with no increment or increases.  There was no “pro rataing”.

24              Although it was conceded that the bonus payment was based on commission paid, His Worship held that it was a payment over and above the commission which was not based on any pro rata payment.  The concession made by Joburne was that the payment was not a pro rata payment.  This therefore, His Worship held, was correctly made and His Worship accepted the submissions made by Mr Clohessy that the payments were not commission payments.

25              His Worship then applied the ratio in John Bombak v Didco Pty Ltd T/A Nik Varga Real Estate (1995) 75 WAIG 2314 (FB) and correctly held that the MCE Act applied to Mr Hignett’s employment.

26              There was no evidence before His Worship in relation to the issue of the rate that is payable for annual leave.

27              His Worship gave his ex tempore reasons for decision further, on 1 March 2000.  He held that Mr Hignett did not have an entitlement to annual leave payments because there was no rate upon which any such entitlement could be based.  He therefore found that the complaint was not proven and dismissed it.

ISSUES AND CONCLUSIONS

28              The question before the Commission was at first whether Mr Hignett was entitled to annual leave payments for service from 1 December 1993 to 21 September 1998 pursuant to the provisions of the MCE Act.  Mr Jones, in his final submissions for the respondent, conceded that the MCE Act applied to Mr Hignett and conceded that there is some entitlement to annual leave (see page 41 of the transcript at first instance (hereinafter referred to as “TFI”)).  It was also conceded by Mr Clohessy, who appeared for the complainant at first instance, (see page 42(TFI)) that the only claim for annual leave was for the period 1 December 1993 to 1 December 1997, which was not the period pleaded in the complaint.  As Mr Jones submitted, there were no sales in August or September and nothing was payable to Mr Hignett.  Mr Clohessy also conceded that a claim did not lie for more than $1,940.00 (see page 51(TFI)).

29              It is, of course, the case that Clause 13 of the contract of employment provided that Mr Hignett should be entitled to leave, including annual leave, as follows (see page 15(AB)):-

  “The Representative shall be entitled to the following leave:

  (a) Unpaid annual recreation leave of four weeks after each completed year of continuous service with the Agent.  Such leave shall be taken as mutually agreed between the parties.

  (b) (i) Unpaid sick leave not exceeding ten days per year of service.

   (ii) Additional unpaid sick leave may be granted at the discretion of the Agent.

  (c) Such other unpaid compassionate leave as may be granted by the Agent.”

 

30              The relevant provisions of the MCE Act are s.5(1), s.11, s.18(1) and s.24(2).

31              The MCE Act prescribes an entitlement to paid annual leave (see s.23).  That provision applies, in the absence of a more favourable condition in the contract, which absence is the fact (see s.5 of the MCE Act).  Accordingly, for those reasons, any entitlement to annual leave had to be a minimum of four weeks per year, paid.

32              It is quite clear that Mr Hignett was substantially remunerated by way of commission payments on sales achieved (see page 8(AB)) and by other payments, one of which was a flat payment which allowed Mr Hignett to claim the benefits of the MCE Act (see page 9(AB)), as was conceded.

33              The MCE Act provides, by s.18(1), that when annual leave is paid, the 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 the workplace agreement, award or contract of employment.  The leave was taken effectively on the date of termination, being 21 September 1998.

34              An amount of commission in the pay week ending 17 September 1998 was not the rate for the purposes of calculating payment for annual leave pursuant to the MCE Act.  The rate to be taken into account was the rate which was applicable on 21 September 1998, being the date of termination and the day upon which payment of leave was due (see page 11(AB)).

35              It was common ground between the parties that a payment of commission became due to Mr Hignett on 22 September 1998, but this was subsequent to his dismissal and fell outside the period properly the subject of the complaint (see page 89(AB)).

Ground A

36              This ground contends that the Industrial Magistrate was in error in not finding that Mr Hignett was entitled to an amount of $13,850.40, being an annual leave benefit based on 5.8 years of service at $597.00 per week.  There is no substance in that ground.  Leave must be paid for at the rate which the employee would have received at the time when the leave was taken.  The only finding able to be made by His Worship was that the leave became due and payable on the date of Mr Hignett’s termination.

37              There is no evidence that the annual leave benefit was one based upon 5.8 years’ service at the rate of $597.00.  There is no authority for the proposition that the full entitlement to leave must be paid at the rate of remuneration due after termination.  Indeed, the fact that an amount of commission was due and payable at that time is not evidence that that was the amount which constituted remuneration for the purpose of calculating annual leave.

38              Further, it could not, being monies payable after the termination of the contract of employment, be brought into account in calculating the amount of any annual leave payment due.  In any event, an amount of annual leave calculated at a pay rate less than $335.00 per week would not be lawfully payable under the MCE Act.


Ground B

39              There is no merit in this ground.  On the agreed date of termination, there were, on the evidence, no monies due and payable to Mr Hignett by way of remuneration upon which a proper calculation of annual leave might be made.  Further, there was no evidence that an amount different from the amount of $335.00 referred to hereinafter might be used as the basis for calculating the quantum of any annual leave payment.

Ground BA

40              The commission paid in the week ending 17 September 1998 (being Thursday, the agreed pay day) cannot be the rate required to be paid by s.18(1) of the MCE Act, since it was not the rate at which Mr Hignett would have received as his payment at the time when the leave was taken.

41              Clearly, as Joburne accepts, in the absence of any other rate under the contract of employment, s.5 and s.11 of the MCE Act combined to require Joburne to pay Mr Hignett $335.00 as a minimum rate of pay which is the rate for the purposes of s.18(1) of the MCE Act.  This was not the subject of any submission to His Worship on behalf of the applicant at first instance, nor to the Full Bench on behalf of the appellant.  The Full Bench can take no account of it as an argument (see Metwally v University of Wollongong (1985) 60 ALR 68 (HC)), as Mr Jones, for Joburne submitted.  That disposes of Ground BA.

Further

42              There was no evidence before the Court (see exhibit 2 and pages 55, 61-64, 71 and 74(AB)) to support a conclusion that Mr Hignett is entitled to 5.8 years’ accumulated annual leave benefits.  The evidence was that the bonus payments were payable in flat rate form only since 1996, so that annual leave entitlements accrued from that date only, in any event.


FINALLY

43              There were no submissions on behalf of the appellant directed otherwise to the support of the grounds.

44              I would not be willing to accede to the submission that, if there was not sufficient evidence to prove each ingredient of the complaint, then it should be remitted back to His Worship for further hearing and determination.  If there was not sufficient evidence to prove all ingredients of the complaint, then it should have been, and indeed was, correctly dismissed.

45              His Worship, by virtue of s.7 of the MCE Act and s.83 of the Act, exercises a jurisdiction which can result in the imposition of a penalty upon complaint.  If His Worship was not satisfied that there was sufficient evidence and he was right in so finding, then he was not in error and the appeal cannot succeed.

46              I have considered all of the evidence and all of the submissions.

47              No ground of appeal is made out.  His Worship did not err as alleged in the grounds of appeal.  For those reasons, I would dismiss the appeal.

 

CHIEF COMMISSIONER W S COLEMAN:

48              I have had the advantage of reading the drafts of reasons for decision prepared by the Hon. President and the Senior Commissioner.  I agree that the appeal should be dismissed.

49              Central to the determination of the matter before the learned Industrial Magistrate was whether the appellant was a person whose services were remunerated wholly by commission or percentage reward for the purposes of the Minimum Conditions of Employment Act, 1993.  In my view the learned Industrial Magistrate correctly found that the superannuation payment made under a statutory obligation was not part of income and that remuneration received under an arrangement involving the Holiday Inn Park Suites (HIPS) scheme and rental (REMS) payments were clearly commissions.  Where he erred in my view was in determining that ‘sales awards, bonus prize’ (Exhibit 3), fell outside a commission payment.  This opened the “floodgates” with respect to the calculation of payment for annual leave.

50              The characterisation of the sales awards of bonus prize as a “piggy-back commission” correctly identifies the nature of the payment.  However the fact that this additional level of remuneration was a flat payment and was not calculated on a pro rata basis does not in my view render the circumstances of employment not wholly by commission or percentage reward.  The sales award albeit a flat payment was dependent on the level of gross income derived from sales secured by the salesperson.  It was wholly dependent on the attainment of a threshold level of income calculated as a percentage reward.  Within the context of the Minimum Conditions of Employment Act and indeed in commerce generally “commission” comprehends the payment on the basis other than a percentage reward or pro rata payment.  It is the attainment of a sale which attracts the payment be that on a flat fee or percentage of the price.  Here there was no entitlement to payment other than by the outcome of sales.  That was clearly the intention of the parties; the nature of the additional flat payment on top of the percentage reward did not alter that nor did it bring the arrangement within the scope of the Minimum Conditions of Employment Act for the calculation of annual leave.

51              In my view the outcome reached by the learned Industrial Magistrate although arrived at for different reasons should not be disturbed.

 

SENIOR COMMISSIONER G L FIELDING:

52              I have had the advantage of reading in draft form the reasons for decision prepared by the President.  I agree that the appeal should be dismissed.  The learned Industrial Magistrate was right to dismiss the complaint, but did so for the wrong reasons. 

53              In my opinion the Appellant was not, on the evidence, an employee for the purposes of the Minimum Conditions of Employment Act 1993.  Consequently, the complaint that the Respondent failed to pay the Appellant annual leave as prescribed by that Act was not well founded. 

54              A person only has an entitlement to the benefits of annual leave prescribed by the Minimum Conditions of Employment Act 1993 if he is an employee for the purposes of that Act.  Section 3 of the Act excludes from the definition of an employee “a class of persons prescribed by the Regulations as persons not to be treated as employees for the purposes” of the Act.  The Minimum Conditions of Employment Regulations 1993 provide that “persons whose services are remunerated wholly by commission or percentage reward” are a class of persons not to be treated as employees for these purposes.

55              It is common ground that the Appellant was at all material times employed by the Respondent as a commission sales representative.  In addition to the remuneration specified in his written contract of employment, which remuneration the learned Industrial Magistrate correctly held to be commission, the evidence discloses that the Appellant from time to time received monetary bonuses or prizes.  These bonuses were paid apparently pursuant to a verbal arrangement between the Appellant and the Respondent.  Under this arrangement sales personnel were awarded a bonus for achieving a nominated sales target in any one month.  The magnitude of the bonus depended upon the level of the sales achieved by the salesmen in each month.  Needless to say the higher the sales income in that month the higher the bonus.  The bonus was not fixed by reference to a percentage of the sales income, as was the case for the regular commission paid to the Appellant, but a fixed sum which varied depending on the range or level of gross income from sales achieved by each salesman.  The evidence does not reveal much about the nature of the prizes.  In the normal course of events I would have thought a prize was in the nature of an ex gratia payment, and thus not to be considered as being remuneration in the context of the Act.  However, such evidence as there is suggests that prizes were earnt on much the same basis as the bonuses. 

56              The learned Industrial Magistrate thought that these additional bonuses or prizes “could almost be seen as a sort of piggyback commission” or “an additional commission” but in the end was persuaded that they were not in the nature of a commission because there was “no pro rataering” on the level of sales income achieved by salesmen, in this case the Appellant.

57              In my assessment that was an erroneous conclusion.  Such evidence as there was suggests that the additional payments made to the Appellant by way of bonuses and prizes were as the learned Industrial Magistrate postulated indeed in the nature of additional commission.  They were payments determined by and based on results.  Such evidence as there was suggests that the magnitude of those additional payments varied with the level of income from sales, albeit on the basis of scales of income rather than as a direct percentage of the income.  They were in a very real sense pro rata payments because they varied with the level of income from sales effected on behalf of the Respondent.  Instead of being based on a percentage of the value of the sales they were based on a scale which in turn was regulated by the value of the sales.  They were only “flat payments” to the extent that they were based on a particular scale.

58              I adhere to the view I expressed in Oates v Sanders Executive Pty Ltd (1999) 79 WAIG 3543 at 3545 that a commission can take many forms.  It does not have to be a percentagebased reward.  Indeed, that is evident from the provisions of the Minimum Conditions of Employment Regulations 1993 which clearly imply that remuneration by commission need not involve remuneration by percentage reward.  As explained in Drielsma v Manifold [1894] 3 Ch 100 the expression “commission” is not a term of art but is “primâ facie the payment made to an agent for agency work, usually according to a scale it may be an ad valorem scale, but not necessarily an ad valorem scale” (per Davey LJ at 107).  In my assessment that aptly fits the description of the additional payments in question on this occasion.

59              The learned Industrial Magistrate was, in my view, correct for the reasons he gave in holding that superannuation entitlements, the rental payments and telephone allowance did not constitute remuneration for the purposes of the Minimum Conditions of Employment Regulations 1993.  In the circumstances it follows that the learned Industrial Magistrate was wrong to conclude that the Appellant was not remunerated wholly by remuneration or by percentage reward.  On the contrary the Appellant, on the evidence, was, in my opinion, wholly remunerated by commission or by percentage reward at least for the purposes of the Minimum Conditions of Employment Regulations 1993.

60              Much of the argument on the appeal centred on the rate at which the Appellant was to be paid for his alleged annual leave entitlement under the Act.  In my assessment that argument served only to show that the Appellant was remunerated wholly by commission or percentage reward and not by any other means.  Section 18(1) in conjunction with s 24 of the Minimum Conditions of Employment Act 1993 provides that payment for untaken leave is to be paid not at the rate when the leave accrued but at the rate applicable to the employee under his contract of employment at the time the leave is taken.  It does not follow that because the employee was not due to be paid any remuneration at the time of taking leave, his rate of pay was nil.  The logical consequence of that proposition is that the employee was employed to work for nothing.  Clearly that was not the case for the Appellant.  Rather, he was employed for reward on the basis of receiving a proportion of the commission received by the Respondent through his efforts.  In effect that is his rate of pay, albeit that it is impracticable to be used in calculating a payment for annual leave.  Perhaps that is why the legislation excludes persons remunerated wholly by commission or percentage reward from the operation of the Act.

61              It follows in my view that the appeal should be dismissed.  The Appellant was not an employee for the purposes of the Minimum Conditions of Employment Act 1993.

 

THE PRESIDENT:

 

62              For those reasons, the appeal is dismissed.

 

Order accordingly