100318580

WESTERN AUSTRALIAN INDUSTRIAL MAGISTRATE’S COURT

PARTIES GREG LOGAN-SCALES, DEPARTMENT OF CONSUMER & EMPLOYMENT PROTECTION

CLAIMANT

 -v-

 OLTEN PTY LTD (ACN 076 543 130) T/A MSA SECURITY

RESPONDENT

CORAM MAGISTRATE WG TARR IM

DATE THURSDAY, 14 AUGUST 2003

FILE NO/S M 248 OF 2002

CITATION NO. 2003 WAIRC 09130

____________________________________________________________________________________             

Representation

Claimant Mr G Logan-Scales appeared for the Claimant.

Respondent Mr D Clarke of Senate Pty Ltd appeared as agent for the Respondent.

_______________________________________________________________________________

Reasons for Decision

1          The Claimant in these proceedings is claiming on behalf of an ex-employee of the Respondent that the Respondent failed to comply with the Security Officers (Western Australia) Interim Award 1996 (“the Award”) by not paying the employee penalty rates for the Foundation Day public holiday (clause 10(a) of the Award) and overtime rates for the additional hours worked above 7.6 hours per day (clauses 17(a) and 17(d) of the Award)

2          Generally there is no issue taken with the evidence that the employee, Kevin Cecil Cutbush, was employed as a part-time security officer by the Respondent during the period subject to the claim.  The particulars claim he was employed during the period 30 December 1996 to 4 July 1999.

3          The fundamental issue is whether there was an agreement between the Australian Liquor, Hospitality and Miscellaneous Workers Union (“the Union”) and the Respondent.  It is argued by the Respondent that the agreement dated 23 January 1992 between The Federated Miscellaneous Workers Union of Australia, WA Branch (“the FMWU”) which I assume became the present union (“the Union”) and MSA Guards and Patrols (“the Agreement”) remains in force.  That agreement was produced and marked exhibit N.

4          The Agreement was made in accordance with subclause (3)(b) of clause 7 of the Security Officers’ Award No 25 of 1981, the State award which applied at the time.  The parties agreed to implement alternative shift arrangements outside of ordinary hours as defined in the State award. It, in effect, provided for the rostering of security officers to work up to twelve ordinary hours per day, averaging 38 hours per week over a roster cycle (“12 hour shift”).

5          For completeness, the agreement is included hereunder:

HOURS AGREEMENT BETWEEN THE FMWU

AND MSA GUARDS & PATROLS

In accordance with Clause 7 – Hours (3) (b) of the Security Officers’ Award No. 25 of 1981, agreement to implement alternative shift arrangements outside of ordinary hours (as defined in the Award), shall be as follows:

1)   Rosters may be arranged whereby Security Officers may work up to, but not exceeding, 12 ordinary hours per day, averaging 38 hours per week over a roster cycle.

2)   Ordinary hours is deemed to include any shift or weekend penalties.

3)   Employees must genuinely agree to work the proposed rosters and must agree in writing prior to commencement of such rosters.  Such written agreement will be available to the Union on request.

4)   Any hours worked in excess of 12 hours per day will be overtime and will be paid at double time.

5)   MSA Guards & Patrols will notify the FMWU within 2 weeks where rosters are developed in accordance with this agreement.

6)   The duration of this agreement will be for one year from 24th January 1992.

7)   Annual Leave

 For administration purposes, all annual leave entitlements will be recorded in equivalent average weekly hours of work in accordance with Clause 7 – Hours.

 When an employee proceeds on leave, his/her entitlement calculated in accordance with this subclause, will be debited by the number of ordinary hours he/she would have worked on his/her ordinary roster during the period of leave.

8)   Public Holidays

 An employee shall be entitled to the holidays as prescribed in Clause 8 – Holidays of the award without loss of pay up to a maximum of 7.6 hours for each public holiday.

9)   Sick Leave

 An employee shall accrue sick leave at the rate of 1/6th of a week for each completed month of service.  In respect of this agreement, a week shall be regarded as 38 hours.

10) Compassionate Leave

 A day will be regarded as 7.6 hours for the purposes of this agreement.

11) Where shift arrangements are implemented in accordance with this agreement and as a result of the work roster employees are within a pay period working ordinary hours which are less than 38 in a week and in the next pay period are working ordinary hours which are more than 38 in a week then the employee shall be paid an average of ordinary time, allowances and overtime earnings for each week of the roster cycle.

 The same principle shall apply to part time employees on a pro-rata basis.

Should any difficulties arise in regard to the operation of this agreement then the Union and the Employer will confer as soon as practicable to resolve such difficulties.

The rights of the parties are reserved in regard to seeking the assistance of the Industrial Relations Commission.

6          The Agreement was signed by David Armstrong on behalf of the FMWU and by Mr Tony Bywaters on behalf of MSA Guards & Patrols and was dated 23 January 1992.

7          The Claimant argues that the Agreement is no longer in force and that the provisions of the Award apply.

8          Clause 9 of the Award sets out the ordinary hours of duty in subclause (a) as follows:

9 – HOURS

(a)   (i)     Subject to the provisions of this clause, the ordinary hours of duty shall be an average of 38 per week with the hours actually worked being 80 in each roster period of 14 consecutive days to be worked eight hours per day on any ten days of the fortnight with not more than one shift in any period of 24 hours.

(ii)    The ordinary hours shall be worked with two hours of each week’s work accruing as an entitlement to a maximum of 12 accrued days off in each 12 month period.  The accrued days off shall be taken in a minimum period of one week made up of five consecutive accrued days off in conjunction with a period of annual leave or at a time mutually acceptable to the employer and officer, or

(iii)   The ordinary hours of an officer in lieu of the provisions of subclause (a) hereof, may be worked within a 20 day, four week cycle with 0.4 of an hour of each day worked accruing as an entitlement to take the 20th day in each cycle as an accrued day off in conjunction with other days off duty.

9          Relevant to these proceedings clause 9(c)(ii), as set out hereunder, provides for a twelve hour shift by agreement as the State award did:

(c)   In addition to the foregoing the following specific provisions shall apply:

(i)   …

(ii)  The ordinary working hours prescribed by this clause may be altered by agreement between the employer and the Union, and where an agreement is reached in accordance with this provision to allow ordinary hours to be worked in excess of those prescribed by this clause up to but not exceeding 12 hours then notwithstanding any provision of this Part, the parties may also reach agreement in relation to consequential variations in the payment of ordinary hours, leave and other provision of this Part affected by agreement pursuant to this subclause.

10       There is no dispute that the agreement was not registered by the Western Australian Industrial Relations Commission.

11       Mr John Blaze Dennison (“Mr Dennison”) gave evidence that he is the Managing Director of Olten Pty Ltd which trades as MSA Security and he is the chief executive officer.  He has been involved in the security industry since 1981 and took over MSA Security with effect from 1 January 1997.

12       Mr Dennison gave evidence of a period of due diligence and his discussions with Mr Byfield, the then General Manager.  The issue of the 12 hour shift agreement was raised and Mr Dennison was shown a copy of the agreement.  He said he raised with Mr Byfield, at the time, “the fact that the agreement stated that it had a duration for one year”.

13       It is Mr Dennison’s evidence that he had been told by Mr Byfield that “whilst the document stated for one year that he had an agreement with the union for that agreement to continue on”.  His evidence is that he asked a Mr Wilf Hunt, who was a Union official, and Mr Hunt had told him that “MSA Guards & Patrols had a 12 hour agreement”.

14       Mr Dennison was also involved in discussions and meetings with the industry and Union officers, in particular, Mr Nicholas Ellery and Mr Wilf Hunt, resulting in the change from the State award to the Federal award.  It is his evidence that he was left with a clear understanding “that the existing agreements, understandings and interpretations that applied to the State award would carry over into the Federal award.  In effect the status quo would prevail”.

15       It is the Union’s position that the agreement dated 23 January 1992 was for twelve months and since its expiry there have been attempts to negotiate another agreement which have not been successful.  On 4 February 1993 a Union organiser wrote to Mr Byfield in reply to his letter dated 14 January 1993.  The Union’s letter read:

“I am glad to advise you that we are willing to extend to you the extension of the 12 Hour Shift Agreement, there are however some alterations to the original.  If you are in agreement to this new document, I will arrange a time and date for us to sign.”

16       Mr Byfield confirmed in his evidence that the new arrangement was not signed because the new “agreement contained some conditions which were rather tenuous, in my opinion”.

17       Mr Byfield confirmed that no other written agreement was ever entered into while he was in charge of MSA, however, he gave evidence of a verbal agreement with Mr Wilf Hunt, who he first met in 1995.  He went on to say that the verbal agreement was “on the basis that they (the union) never received any complaint from any of my staff.  They didn’t see it necessary to rock any boats as they had a reasonable number of members.  We hadn’t given them any reason to – or have any reason to come and check our books, time and management records, and our verbal agreement was as long as the status quo remained”.

18       Mr Hunt gave evidence that he returned from working for the Union in the North West  to Perth in mid 1995.  He was a Union organiser responsible for private security companies.  He was well aware of the 12 hour shift agreement provision in the State award and that there were written agreements between the union and a number of security firms.  The agreements he sighted were signed by Stephanie Mayman and Mike Kirkpatrick, officers of the Union.  He had not seen the MSA agreement, signed by Dave Armstrong, before it was shown to him in Court.  Mr Hunt gave evidence that he had major concerns about the 12 hour shift and when he raised the matter with a number of security companies they produced relevant agreements.

19       Although in cross-examination Mr Hunt agreed that MSA in mid 1995 produced a current written agreement signed by Ms Mayman and Mr Kirkpatrick, he was obviously mistaken as there is no suggestion in the Respondent’s evidence that such an agreement existed in that form and it is the 1992 agreement which is relied upon.  At best the evidence of Mr Hunt is that he made an assumption on the basis of what he was told by Mr Dennison that MSA had a written agreement with the Union similar to that of other security companies and because there were no complaints, as such, from the members of the union, no issue was taken regarding 12 hour shifts.

20       As I have mentioned, it is and was the view of the Union that there was no 12 hour shift agreement with MSA.

21       Ms Susan Lines gave evidence that because of that belief she had discussions with Mr Dennison.  She said she “asked Mr Dennison on many occasions if he had a copy of the agreement to furnish us with a copy and he never did”.  She gave evidence that after the issue of the Federal award she took the opportunity of stating the Union’s position and wrote to all on the respondency list of the Federal award, including MSA.  Her letter was dated 27 February 1997 and read as follows:

In view of the recent decision (14 January 1997) regarding the issuance of a Federal Award for Security Officers, (Security Officers (Western Australia) Interim Award 1996), it seems appropriate to discuss arrangements you have in place with us regarding the operation of 12 hour shifts as per Clause 7 – Hours (b) of the former State Award.

It is our view that any prior written agreements that existed pursuant to that State Award known as the Security Officers’ Award No. 25 of 1981 are therefore null and void.

Could you please indicate to us whether you wish to pursue a new agreement, otherwise we will assume Award Clause 9 – Hours in the Federal Award applies without variation.

22       Mr Dennison responded by letter dated 12 March 1997 maintaining his claim that the agreement made under the State award continued under the Federal award.  His view, he claims, is based on his discussions with Mr Hunt and with Mr Nicholas Ellery, a solicitor who was employed by the Union as an Industrial Officer and who was involved with the creation of the Federal award.  It is also suggested by the Respondent that, as the use of the 12 hour shift was widespread in the security industry and there were no prosecutions until this one on behalf of the employee Cutbush, the union knew of and accepted that there was an agreement.

23       It is Mr Ellery’s evidence that it was in the Union’s interest to move to a Federal award and he was involved in negotiations with the major employers in the security industry, including MSA.  In a letter to the Australian Industrial Relations Commission he stated “we have agreed that the status quo position should be applied, that is, the federal award that is issued should mirror, as far as possible, the current state award positions”.  It was his evidence that his view then was that he intended any existing rights or obligations created by the State award should be mirrored in the Federal award.  He did not specifically recall 12 hour shift agreements being mentioned and he maintains there was no extension of any agreement.  His view was that he “didn’t think the agreements were very good documents, I didn’t think they were a particularly good deal” and he would be reluctant to “okay” any agreements of the type he saw with other security firms.  It was also his view that any agreements be in writing “because if they’re not, I mean, it’s obviously open to confusion or misunderstanding”.  He went on to say that “it was common practice and the common expectation that agreements would be put in writing”.

24       It is the Respondent’s view that the 1992 Agreement was in force during the period of the claim herein, whereas the Claimant’s position is that the Agreement was for a period of one year from 24 January 1992.

25       Whenever there is a dispute regarding the terms of an agreement or contract it is necessary to consider the wording used in the agreement or contract to determine the meaning of the relevant clauses.  Clause 6 of the Agreement provides:

“The duration of this agreement will be for one year from 24th January 1992.”

26       I would have thought, by any assessment, that the meaning of those words is clear and the only conclusion one could come to is that the Agreement expired on 24 January 1993.

27       I have been asked to find that, as the wording of clause 6 of the Agreement is the same as the words used in the State and Federal awards generally to describe duration, the Agreement should continue in force until it is cancelled, suspended or replaced.

28       Section 37(4) of the Industrial Relation Act 1979 provides that:

“An award, and any provision of an award, whether or not it has been made for a specified term, shall, subject to any variation made under this Act, remain in force until cancelled, suspended, or replaced under this Act unless, in the case of an award or a provision made for a specified term, it is expressly provided that the award or the provision, as the case may be, shall cease to operate upon the expiration of that term.”

29       The legislation provides for an award which may otherwise expire because of a duration clause to continue in force notwithstanding that clause.

30       Similarly, an industrial agreement which is defined in section 7 of the Industrial Relation Act 1979 as meaning:

“…an agreement registered by the Commission under this Act as an industrial agreement;

continues in force until a new agreement has been made.

31       Section 41(6) of that Act provides as follows:

Notwithstanding the expiry of the term of an industrial agreement, it shall, subject to this Act, continue in force in respect of all parties thereto, except those who retire therefrom, until a new agreement or an award in substitution for the first‑mentioned agreement has been made.

32       The Agreement the subject of these proceedings was not registered and, therefore, did not come within the provisions of the Industrial Relation Act 1979.

33       Although this action is a claim relating to a breach of the Federal award, it is the State legislation which has application to the statutory extension of the duration provision of the agreement which was made pursuant to the provisions of the State award.  Had the agreement been registered and had it, therefore, continued in force as provided for in section 41(6) of the State Act, there could have been an argument with some merit that it continued in force under the Federal award.

34       I am unable to find any evidence to support the claim that the Agreement was extended verbally by Mr Hunt, Mr Ellery or any other Union official.  In fact, there is no evidence that the parties turned their minds to the Agreement and specifically agreed that it be extended.

35       It has been the Union’s position from as early as the Union’s letter dated 4 February 1993 offering an extension of the Agreement in the terms of an altered agreement attached thereto that the Agreement no longer applied.  There is no evidence that a new agreement was accepted by the Respondent and signed by the parties.

36       The Union’s letter dated 27 February 1997, following the issue of the Federal award, also stated the Union’s view and invited security companies to pursue a new agreement if they wished.

37       Having found, therefore, that there was no 12 hour shift agreement after 24 January 1993, I now turn to the question of overtime entitlements.

38       I have set out Clause 9 of the Federal Award on page 5 of these reasons.

39       The Award provides for the ordinary hours of duty to be 38 hours per week, but allows for up to 80 hours being actually worked in each roster period of 14 consecutive days to be worked 8 hours per day on any 10 days of the fortnight with not more than one shift in any period of 24 hours.  This, in effect, means that an employee becomes entitled to an accrued day off each month.

40       As I understand the evidence, the accrued day off comes about because the weekly wage rate set out in the Award is based on a 38 hour week, although the employee works 40 hours.  The extra 2 hours per week accumulates so that a day can be taken off in the fourth week.  It follows, therefore, that the employee works, in effect, 32 hours in the fourth week but is paid the same weekly wage rate as provided within the Award for the 38 hour week.

41       Clause 9, in my view, envisages ordinary hours to be 8 per day, resulting in 80 hours being worked in a fortnightly roster period or 160 hours in a four week cycle (See subclause (a)(ii) and (iii)).  It follows, therefore, that whether an employee was paid for 38 hours per week and who accumulates a day off each 4 weekly period, or was paid for the 40 hours worked each week without accumulating hours towards a day off, in neither case would they be entitled to overtime until they had completed 8 hours in any 24 hour period.

42       Clause 17 is the clause which provides for overtime and the relevant part is set out hereunder:

“… all work done outside ordinary hours prescribed by clause 9. –Hours of this award, shall be paid for at the rate of time and one-half for the first two hours and double time thereafter.  Continuous shift officers shall be entitled to double time.  In computing overtime each day’s work shall stand alone.”

43       It follows, therefore, that the employee Kevin Cutbush, who was paid for all hours worked and did not accumulate time towards an accrued day off, was entitled to be paid overtime at the rate provided on each occasion that he worked in excess of 8 hours in any one shift based on the hourly rate that was applicable at the time.

44       Generally the amount payable is within the knowledge of and can be calculated by the parties.  There has been issue taken with some entries in the wages records where it is apparent the employee was paid for work he could not have done.  In the Claimant’s submissions it is admitted that the employee was overpaid in a range between $184.87 to $216.85, depending on the hours worked on 13 June 1997.  Although the onus of proof is on the Claimant to prove its claim, there is an obligation on the Respondent employer to maintain accurate time and wages records. In my view, where there is an obvious error in the employer’s records raising a doubt about entitlement, the employee should be given the benefit of that doubt.  I find, therefore, that the overpayment should be determined to be $184.87.  That amount should be deducted from the amount found or agreed to be owed.

45       I am hopeful that the parties will agree on the actual amount due as a result of my findings on the issue of overtime.

46       The only other outstanding matter is the question of penalty rates for the hours worked on the Foundation Day public holiday on 2 June 1997.  There is evidence before the Court by way of a timesheet report generated from the Respondent’s own computer which shows that Mr Cutbush was paid for 3 hours worked on 2 June 1997.  Those hours were paid at the ordinary hour’s rate.  Clause 10 of the Award provides for the payment of double time and one-half for all time worked on a public holiday including Foundation Day.  I find on the evidence that Mr Cutbush did work 3 hours on the subject Foundation Day and was entitled to be paid at the rate provided in clause 10 of the Award.

WG Tarr

Industrial Magistrate