WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

CITATION : 2014 WAIRC 01042

DELIVERED : Monday, 22 september 2014

FILE NO. : B 44 OF 2014

Applicant

AND

The Salvation Army (Western Australia) Property Trust as the Trustee for The Salvation Army (WA) Social Work trading as Salvos Stores

Respondent

Catchwords : Industrial law (WA) – Contractual benefits claim – Whether the Commission has jurisdiction – Characterisation of the claim – Claim for leave – Claim for ordinary wage or salary – Whether the claimed denied contractual benefits arise under the contract of employment – Principles applied – Non-excluded matter – Incorporation of an award – Ready, willing and able – Above award wage – Jurisdiction found – Declaration that the Commission has jurisdiction to hear the claim

Legislation : Commonwealth Constitution s 77(iii)

  Fair Work Act 2009 (Cth) ss 12, 27(1)(c)

  Industrial Relations Act 1979 (WA) ss 7, 12, 26(2), 29(1)(b)(ii), 83(3)

  Judiciary Act 1903 (Cth) s 39

Result : Jurisdiction found

Representation:

Counsel:

Applicant : Mr J Fiocco of counsel

Respondent : Mr J Reid

Solicitors:

Applicant : Slater & Gordon Lawyers

Case(s) referred to in reasons:

Ahern v The Australian Federation of Totally and Permanently Incapacitated Ex-Service Men and Women (WA Branch Inc) (1999) 79 WAIG 1867

Australian Workers’ Union v BHP Iron-Ore Pty Ltd (2001) 102 IR 410

Balfour v Travelstrength Limited (1980) 60 WAIG 1015

Byrne v Australian Airlines Limited; Frew v Australian Airlines Limited (1995) 185 CLR 410

Gramotnev v Queensland University of Technology [2013] QSC 158

Hotcopper Australia Ltd v Saab (2001) 81 WAIG 2704

Lang v Telecom Australia (1989) 70 WAIG 186

Leontiades v FT Manfield Pty Ltd (1980) 43 FLR 193

Mason v Bastow (1990) 70 WAIG 19

Matthews v Cool or Cosy Pty Ltd (2004) 84 WAIG 2152

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

Public Service Association and Professional Officers’ Association Amalgamated of NSW v Director of Public Employment (2012) 250 CLR 343

Queensland v Together Queensland, Industrial Union of Employees (2012) 301 ALR 457

Roberts v Groome (1984) 64 WAIG 774

Soliman v University of Technology, Sydney (2008) 176 IR 183

Steele v Tardiani (1946) 72 CLR 386

Stylianou v Country Realty Pty Ltd as trustee for the Marcelli Family Trust (2010) 91 WAIG 2029

Triantopoulos v Shell Company of Australia Ltd (2011) 91 WAIG 67

Case(s) also cited:

Abdalla v Viewdaze Pty Ltd (2003) 122 IR 215

Comley v Blessing Holdings Pty Ltd as Trustee for the PJS Family Trust [2013] FWC 5008

Davidson v Aboriginal & Islander Child Care Agency (1998) 105 IR 1

Higgins v Gateway Printing (2010) 90 WAIG 525

Raizada v NR Tax Savers and Professionals Pty Ltd (2012) 92 WAIG 478

Rowley v BHP Billiton Iron Ore (2013) 94 WAIG 539

Schultz v Asphar (Asphar Survey Pty Ltd) (2013) 93 WAIG 1557

Urban Transport Authority of New South Wales v Nweiser (1992) 28 NSWLR 471

Reasons for Decision

1         The respondent is a not for profit social welfare organisation.  The applicant was employed as a retail sales assistant in one of the respondent’s retail stores in Perth.  She remains employed.

2         Circumstances were such that from about mid June 2013 the applicant did not attend work on the grounds that the respondent considered that she was not fit for duty, for medical reasons, arising from a prior workplace injury.  As a result of medical reports from the applicant’s doctor in September, October and early November 2013, the applicant contends that she was declared fit for duty and able to return to work, and able to perform her full range of ordinary duties.  Despite this, it is common ground that the applicant was not permitted to return to work until about 15 November 2013.

3         As a consequence of these events, the applicant said that she was “forced” to take sick, annual and unpaid leave, when she was in fact fit for duty. Thus, the applicant contended that she was required by the respondent to use her leave entitlements. The applicant now contends that this “enforced” leave should be paid to her, as a denied contractual benefit. Whilst Ms Fergusson’s claim is couched in this way, it is clear from the agreed facts filed by the parties, that most of Ms Fergusson’s absence from the workplace was unpaid.  Of the total of 281.2 hours of absence, only 34.15 hours were attributable to annual leave. The rest was “unpaid leave”, until she returned to work on 15 November. Thus, with respect, the particulars of claim have somewhat mischaracterised the applicant’s claim.  In reality, she contends that she should be paid her normal wages for the majority of the period that she was not permitted to resume work.     

4         There is a twist in this case. It is also common ground that the applicant’s employment was and is covered by the General Retail Industry Award 2010, made under the Fair Work Act 2009 (Cth). Accordingly, the respondent submitted that the Commission has no jurisdiction to “enforce” the award, and the applicant’s contract of employment does not specify a benefit in relation to annual leave and sick leave, independently of the Award.  For the applicant, it was submitted that the Commission does have jurisdiction because the only exclusion to the contractual benefits jurisdiction, is in relation to State awards made under the Industrial Relations Act 1979.

5         Given the issue raised, it was agreed that the Commission would deal with this preliminary issue of jurisdiction “on the papers”, by written submissions.

Contentions

6         The applicant submitted that there is no issue raised by the respondent that the Commission has jurisdiction to deal with an industrial matter of the present kind, involving the determination of a contractual benefit, against a constitutional corporation: Stylianou v Country Realty Pty Ltd as Trustee for the Marcelli Family Trust (2010) 91 WAIG 2029; Triantopoulos v Shell Company of Australia Ltd (2011) 91 WAIG 67. The applicant also referred to the various elements required to be established in a denied contractual benefits claim, they being that the claim must relate to an industrial matter under s 7 of the Act; the claimant must be an employee; the claimed benefit must be a contractual benefit that being a benefit to which there is an entitlement under the applicant’s contract of service; the relevant contract must be a contract of service; the benefit claimed must not arise under an award or order of the Commission; and the benefit must have been denied by the employer:  Hotcopper Australia Ltd v Saab (2001) 81 WAIG 2704; Ahern v The Australian Federation of Totally and Permanently Incapacitated Ex-Service Men and Women (WA Branch Inc) (1999) 79 WAIG 1867.  So much is not controversial.

7         Additionally, the applicant referred to “benefit” for the purposes of s 29(1)(b)(ii) of the Act, as being defined very broadly to allow an employee to bring to the Commission a matter in which the employee believes he or she has been deprived of some advantage, entitlement, right, superiority, favour, good or perquisite by the action of the employer in contravention of a provision of the contract of service: Balfour v Travelstrength Limited (1980) 60 WAIG 1015; Perth Finishing College Pty Ltd v Watts (1989) 69 WAIG 2307.

8         The applicant submitted that the contentious issue in this matter is whether the benefit claimed by her arises under an award or order of this Commission.  It was submitted that the relevant award referred to in the applicant’s contract of employment in clauses 7 and 10 is a federal award made under the FW Act, and not an award or order of this Commission.  Consequently, the applicant submitted that the Commission has jurisdiction to enforce payments of the benefit under the applicant’s contract of employment, “in the terms set out in the Award”.

9         The applicant acknowledged, in my view quite correctly, that based on Byrne v Australian Airlines Limited; Frew v Australian Airlines Limited (1995) 185 CLR 410, awards are independent from contracts of employment and incorporation of their terms will not be lightly inferred. However, it was submitted that in this case, the Award provides the “measure or standard upon which the Applicant is to be remunerated but the conferral of the benefit is under the contract not under the Award”.

10      For the foregoing reasons, the applicant contended that the Commission has jurisdiction to entertain her contractual benefits claim.

11      For the respondent, it was acknowledged that the Commission has held that it may determine contractual benefit claims against constitutional corporations:  see Stylianou. However, in this case, the respondent submitted that the benefits claimed were legislative, and not contractual, and fall exclusively within the federal jurisdiction. It was contended by the respondent that the applicant’s contract of employment, relevantly refers to the employment relationship as being, in cl 2 “covered by the National Employment Standards as well as the General Retail Industry Award 2010”. The respondent further submitted that cl 10 refers to the applicant’s entitlement to annual leave and sick leave in the terms of “as per the General Retail Industry Award 2010”. 

12      Accordingly, the respondent submitted that the true origin of the benefits claimed in this case arise from the Award and not the contract of employment. The submission was that the Commission has no jurisdiction to enforce a federal award rather, that such matters need to be pursued in the federal courts in accordance with the relevant provisions of the FW Act.

Consideration

13      There is no question as to the Commission’s capacity to enforce a contract of employment, as a denied contractual benefit, against a national system employer.  Such a matter is a “non‑excluded matter” for the purposes of s 27(1)(c) of the FW Act: Stylianou; Triantopoulos; Matthews v Cool or Cosy Pty Ltd (2004) 84 WAIG 2152.

14      It is also the case that from the plain terms of ss 7 and 29(1)(b)(ii) of the Act, the express exclusion from the Commission’s denied contractual benefits jurisdiction, applies to those who allege that the relevant benefit arises under an award or order of this Commission, made under the Act.  It is also clear that the enforcement of an award or order of the Commission is, by virtue of s 83(3) of the Act, exclusively within the jurisdiction of the Industrial Magistrates Court.  However, the key issue in this case is whether the claimed denied contractual benefit is one that arises “under” (i.e. by virtue of or pursuant to) the relevant contract: Lang v Telecom Australia (1989) 70 WAIG 186. Furthermore, the ascertainment of a denied contractual benefit involves the determination of an applicant’s “entitlement”, which means the “existence of an enforceable legal right”:  Leontiades v FT Manfield Pty Ltd (1980) 43 FLR 193 per Keely J. 

15      Thus, the question in this case arises as to whether, subject to what I say further below as to an alternative characterisation of the applicant’s claim, the claim for annual leave by the applicant, is one involving the enforcement of her contract of employment as a non‑excluded matter under s 27(1)(c) of the FW Act. Other interesting issues may arise, as to whether, in any event, this Commission, as a court of record under s 12 of the Act, is also a “court of a State” for the purposes of the enforcement provisions of the FW Act. Despite respectable arguments that this Commission can be so described, at least for the purposes of s 77(iii) of the Commonwealth Constitution and s 39 of the Judiciary Act 1903 (Cth) (see Queensland v Together Queensland, Industrial Union of Employees (2012) 301 ALR 457; Public Service Association and Professional Officers’ Association Amalgamated of NSW v Director of Public Employment (2012) 250 CLR 343; cf Lang), the prescription of “eligible State and Territory courts”, by list in s 12 of the FW Act, for the purposes of the enforcement of federal industrial instruments, may be determinative against such jurisdiction being exercised by this Commission in relation to employees covered by federal awards. However, as the issue has not been raised and argued in the present case, it is best left to another occasion. 

16      As to whether the provisions of the Award in this case constitute benefits “under” the applicant’s contract of employment, for the following reasons, I think that it is doubtful that they are.  The language of cl 10 – Leave, and for that matter, cl 11 – Jury Service of the applicant’s contract of employment, refers to the relevant provision in terms of “as per” the Award.  As noted above, the incorporation of a term of an award into a contract of employment is not to be lightly inferred.  The mere mention of an award, or a provision of one, will not provide a basis to conclusively determine that the award is contractually binding.  As the learned authors in Sappideen C, O’Grady P, Riley J and Warburton G, Macken’s Law of Employment (7th ed, 2011) 266 say: 

Nevertheless, mere mention of the existence of an award or enterprise agreement which binds the parties will not conclusively determine that the award or agreement clauses are incorporated into and binding in contract.  It may be that on proper construction of the contract document, the reference to the award or agreement manifests nothing more than an acknowledgment by the parties of the statutory instruments which will also govern their relationship, according to the terms of the statute.  Mention of industrial instruments in a contract document may serve to identify ‘relevant information capable of affecting the parties contractual relations rather than documents intended to be binding and enforceable as part of their contractual relations’. 

17      Thus, the reference to industrial instruments in contracts of employment in terms such as “are prescribed by”; “are as prescribed”; “subject to and governed by”, have been held to be insufficient to constitute words of incorporation:  Gramotnev v Queensland University of Technology [2013] QSC 158; Australian Workers’ Union v BHP Iron‑Ore Pty Ltd (2001) 102 IR 410; Soliman v University of Technology, Sydney (2008) 176 IR 183. 

18      In my view, in this case, the use of the language “as per” are words of explanation to describe the industrial instrument to which the particular provision of the contract directs attention. It is not the case in my opinion, that the reference to the Award in the applicant’s contract, creates the “standard upon which the Applicant is to be remunerated”, as contended by the applicant. 

19      Based on the above analysis, arguably therefore, the only way that the applicant may seek to recover what she alleges to be the denied rights to annual leave, which as I have mentioned above only represents a small portion of her overall claim, would be for her to seek to enforce the terms of the Award in the appropriate federal court, or an eligible State or Territory court, as defined in s 12 of the FW Act. 

20      However, as noted above, there is a different characterisation of the applicant’s claim which places a wholly different complexion on the issue of jurisdiction.  After the written submissions were received from the parties, and following further consideration by the Commission, I requested my Associate to write to the parties setting out an issue upon which I sought further submissions.  That issue relates to whether the applicant’s claim could be properly characterised as a claim for a denial by the respondent to the applicant, of her ordinary wage or salary over the relevant period. This is on the basis that the applicant contends she was fit for duty, and was ready, willing and able to perform under her contract of employment over this period. 

21      Despite this, the applicant contended that she was effectively excluded from the respondent’s premises, and annual leave benefits were appropriated to her, with the great majority of the time being a period of unpaid leave.  If the applicant’s claim can be characterised in this way, then by cl 7 – Wage Rate of her contract of employment, it is specified that an annual wage rate for her position is $37,130.15, an annual rate of wage above the Award. 

22      If considered in this way, then two issues arise.  The first issue is that the contract of employment itself specifies the annual rate of wage. The second is that the annual wage exceeds that prescribed by the Award. It has been held by the Commission that where an employee is paid in excess of the relevant award rate of pay, irrespective of whether it is a State or federal award, then the employee may recover the whole amount claimed as a non‑award payment, as a contractual benefit: Roberts v Groome (1984) 64 WAIG 774; Steele v Tardiani (1946) 72 CLR 386; Mason v Bastow (1990) 70 WAIG 19. 

23      As the Commission, in enquiring into and dealing with an industrial matter, is not, by s 26(2) of the Act, restricted to the specific claim made or to the subject matter of the claim, the Commission invited further submissions as to this issue.  The parties accordingly, made the following further written submissions. 

24      For the applicant it was contended that this characterisation has great force and supports the proposition that her claim is within the jurisdiction of the Commission.

25      For the respondent, it was submitted that the Commission should not characterise the applicant’s claim in the alternative as outlined above. The submission was that to do so would be to impose an impermissibly broad construction on Ms Fergusson’s contract of employment when in reality, the entirety of her claim should be considered in the federal courts as an enforcement of the Award or the federal legislation.  Furthermore it was submitted by the respondent that to adopt the alternative characterisation of the claim, would involve an overemphasis on the implication of a term of the applicant’s ongoing access to the workplace, in order to perform work and earn wages under the contract of employment. In relation to the contract it was accepted by the respondent that as observed by the Commission, under her contract of employment, the applicant was paid in excess of the relevant amount prescribed by the Award and that furthermore, an over-award payment, could be recovered as an entire debt due, without being characterised as an award enforcement.

26      Furthermore, the respondent reiterated its earlier submissions that the onus still remained with the applicant to establish that her claim fell within the Commission’s jurisdiction and that she had failed to discharge that onus.

Conclusion

27      In my view, for the following brief reasons, the applicant’s claim is within the jurisdiction of this Commission and it may be dealt with as a claim for an alleged denied contractual benefit.

28      A significant difficulty for the respondent’s submission is the implicit contention that the entirety of the applicant’s claim involves the enforcement of a term of the Award. This is not correct.  From the agreed facts as filed by the parties, it is clear that the majority of time over which wages are claimed, involved no payment at all to the applicant. That is, as noted above, she was not paid her ordinary wage or salary for 247.05 of the total of 281.2 hours over which she was absent from the workplace. Thus, it is clear, that in reality, the applicant is not claiming the effective benefit of a “re-crediting” of leave entitlements, because in the main, she has not received them. The essence of the dispute is that the applicant maintains, consistent with the medical advice that she received, that she was fit, willing and able to return to duty on 19 September 2013. 

29      She further contends that in effect, wrongfully, the employer precluded her from doing so and failed to pay her for the majority of the time she was absent, until her return to duty on 15 November 2013.  Whilst, as noted, in light of the agreed facts, that may not have been adequately particularised in the claim, the claim in my view can only be properly characterised as a claim for payment of her ordinary wage and salary, for the period over which she contends that she was wrongfully prevented from returning to duty.  When viewed in the context of the agreed facts, which the matter must be, the claim plainly substantively relates to the enforcement of the applicant’s contract of employment, by way of denied contractual benefits, in the form of payment of her wages over the relevant period. Whilst the applicant’s claim, on the facts as agreed, may raise interesting issues of the “wages-work bargain”, as a matter of common law that is not a question of jurisdiction. The applicant’s claim is plainly an industrial matter, and relates to a claim for the enforcement of her contract of employment, by way of a benefit arising under it, which she says has been denied to her.

30      Accordingly, the Commission will take steps to re-list the application in due course.