WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

CITATION : 2017 WAIRC 00115

DELIVERED : Friday, 3 March 2017

FILE NO. : B 189 OF 2016

Applicant

AND

Mr Andre Stasikowski

Stass Environmental (ABN 73 976 537 552)

Respondent

CatchWords : Industrial law - Whether the Commission has jurisdiction to deal with a claim for enforcement of a contract of employment against a national system employer - Whether claim for denied contractual benefits is a non-excluded matter under s 27(1) of the Fair Work Act 2009 (Cth) - Contractual benefits that are also safety net entitlements - Difference between a safety net entitlement and a contractual benefit - Jurisdictional objection not upheld 

Legislation : Industrial Relations Act 1979 (WA) s 29(1)(b)(ii)

  Fair Work Act 2009 (Cth) s 12, s 26, s 26(1), s 26(3)(c), s 27, s 27(1)(c), s 27(2)(o), s 61(2), s 139(1), s 541, s 542(1), s 543, s 548 

Result : Matter to be listed for hearing

Representation:

Applicant : In person

Respondent : Mr A Stasikowski

Cases referred to in reasons:

Higgins v Gateway Printing [2010] WAIRC 00296; (2010) 90 WAIG 529

Triantopoulos v Shell Company of Australia Ltd [2011] WAIRC 00004; (2011) 91 WAIG 67

Reasons for Decision

Background

1         Mr Grobler was employed by Stass Environmental from 15 December 2011 until 30 September 2016.  Mr Grobler says Stass Environmental denied him contractual benefits including annual leave and annual leave loading owed under contracts of employment dated 2 September 2011 and 11 November 2013 (Contracts).  Mr Grobler referred his claim for denied contractual benefits to the Commission on 18 November 2016.

2         Stass Environmental refused to participate in conciliation at the Commission.  It objects to the Commission dealing with Mr Grobler’s claim because it says that the Commission does not have jurisdiction. 

3         The Commission held a directions hearing on 15 February 2017.  At the directions hearing, the parties agreed that I should decide on the papers whether the Commission has jurisdiction to deal with Mr Grobler’s application.

4         Stass Environmental filed written submissions on 8 February 2017.  Mr Grobler filed written submissions on 28 February 2017.

The law

5         Under s 29(1)(b)(ii) of the Industrial Relations Act 1979 (WA) (IR Act), the Commission may determine whether an employee has been denied contractual benefits.

6         Section 26 of the Fair Work Act 2009 (Cth) (FW Act) generally excludes state laws:

26   Act excludes State or Territory industrial laws

(1)   This Act is intended to apply to the exclusion of all State or Territory industrial laws so far as they would otherwise apply in relation to a national system employee or a national system employer.

(2)   A State or Territory industrial law is:

(a)   a general State industrial law; or

(b)   an Act of a State or Territory that applies to employment generally and has one or more of the following as its main purpose or one or more of its main purposes:

(i)   regulating workplace relations (including industrial matters, industrial activity, collective bargaining, industrial disputes and industrial action);

(ii)   providing for the establishment or enforcement of terms and conditions of employment;

(iii)   providing for the making and enforcement of agreements (including individual agreements and collective agreements), and other industrial instruments or orders, determining terms and conditions of employment;

(iv)   prohibiting conduct relating to a person’s membership or non‑membership of an industrial association;

(v)   providing for rights and remedies connected with the termination of employment;

(vi)   providing for rights and remedies connected with conduct that adversely affects an employee in his or her employment; or

(c)   a law of a State or Territory that applies to employment generally and deals with leave (other than long service leave or leave for victims of crime); or

(d)   a law of a State or Territory providing for a court or tribunal constituted by a law of the State or Territory to make an order in relation to equal remuneration for work of equal or comparable value; or

(e)   a law of a State or Territory providing for the variation or setting aside of rights and obligations arising under a contract of employment, or another arrangement for employment, that a court or tribunal finds is unfair; or

(f)   a law of a State or Territory that entitles a representative of a trade union to enter premises; or

(g)   an instrument made under a law described in paragraph (a), (b), (c), (d), (e) or (f), so far as the instrument is of a legislative character; or

(h)   either of the following:

(i)  a law that is a law of a State or Territory;

(ii)  an instrument of a legislative character made under such a law;

that is prescribed by the regulations.

…

7         The IR Act is a ‘general State industrial law’: s 26(3)(c) of the FW Act.

8         The effect of s 26(1) of the FW Act is that the FW Act generally excludes the application of the IR Act to national system employees and national system employers.

9         But s 27(1)(c) of the FW Act states that s 26 of the FW Act ‘does not apply to a law of a State’ so far as the law ‘deals with any non-excluded matters’. 

10      Under s 27(2)(o) of the FW Act, ‘non-excluded matters’ include ‘claims for enforcement of contracts of employment, except so far as the law in question provides for a matter to which paragraph 26(2)(e) applies’. 

11      It is useful to note that Stass Environmental argues that the Commission does not have jurisdiction to deal with a claim for denied contractual benefits where the contractual benefit is also a safety net entitlement.  Though ‘safety net entitlement’ is not defined in the FW Act, it is clear from the FW Act that the National Employment Standards (NES) and modern awards (national system awards) provide safety net entitlements for national system employees.

Issue

12      I must decide whether Mr Grobler’s claim for denied contractual benefits is a non-excluded matter and therefore within the Commission’s jurisdiction.

Stass Environmental’s submissions

13      As set out below, the parties do not agree about the identity of the Mr Grobler’s former employer.

14      Stass Environmental says its correct name is Stass Environmental Pty Ltd.  I understand its submission to be that Stass Environmental is a constitutional corporation.  As a result, Stass Environmental is a national system employer and Mr Grobler is a national system employee under the FW Act.

15      In response to Mr Grobler’s submissions, Stass Environmental sent an email to my Associate on 2 March 2017 stating:

…Stass Environmental Pty Ltd has been registered with ASIC on 30th June 2016.  It is on this date that the ABN and all other responsibilities in respect of Stass Environmental have been transferred from Patricia Margaret Stasikowski to Stass Environmental Pty Ltd.  

As of 30th of June 2016, Patricia Margaret Stasikowski was no longer a trustee for Stass Family Trust as this was taken over by Stass Environmental Pty Ltd.

16      Mr Grobler’s Contracts provide for annual leave and annual leave loading. 

17      Stass Environmental concedes that the FW Act does not apply to a claim for the enforcement of a contract of employment: s 27(2)(o) of the FW Act, citing Triantopoulos v Shell Company of Australia Ltd [2011] WAIRC 00004; (2011) 91 WAIG 67 (Triantopoulos) as authority for the proposition that the Commission can deal with claims for contractual benefits under a contract of employment against a national system employer. 

18      Stass Environmental says the Commission does not have jurisdiction to deal with a claim for denied contractual benefits where an employee claims safety net entitlements against a national system employer. 

19      It says s 12 of the FW Act defines a ‘safety net contractual entitlement’ as an entitlement under a contract that relates to subject matters described in s 61(2) or s 139(1) of the FW Act. 

20      Section 61(2) of the FW Act sets out the NES relating to annual leave.

21      Section 139(1) of the FW Act provides that a modern award may include terms about leave, leave loading and arrangements for taking leave. 

22      Stass Environmental’s argument that Mr Grobler’s claim for denied contractual benefits is not a non-excluded matter under s 27 of the FW Act relies on its construction of s 542(1) of the FW Act.

23      Section 542(1) of the FW Act provides that:

For the purposes of this Part, a safety net contractual entitlement of…a national system employee, as in force from time to time, also has effect as an entitlement of the…employee under this Act.

24      Stass Environmental says this means that the FW Act applies to safety net entitlements and excludes the IR Act under s 26 of the FW Act.  Therefore, the Commission does not have jurisdiction to deal with a claim for safety net entitlements against a national system employer. 

25      Stass Environmental says there is a difference between safety net entitlements and a ‘purely contractual employment benefit’ because safety net entitlements are a minimum benefit that a national system employer must provide to a national system employee, whereas a purely contractual employment benefit is in excess of safety net entitlements.  Stass Environmental says it is clear that the FW Act applies to safety net entitlements and this excludes the Commission’s jurisdiction.

26      Stass Environmental says if a contract provides for the same benefit as the entitlement under the NES, then the benefit under the contract should be considered a safety net entitlement.  It says the Contracts provide for four weeks’ annual leave per year which is the same as the entitlement under the NES.  Therefore, Mr Grobler’s annual leave benefit under the Contracts should be considered a safety net entitlement. 

27      Stass Environmental argues the same reasoning applies in relation to annual leave loading.  The Contracts provide for 17.5% annual leave loading which is the same as the annual leave loading provided for by the Manufacturing and Associated Industries and Occupations Award 2010, which it says covered Mr Grobler.  Alternatively, if Mr Grobler was not covered by that national system award, he was covered by the Professional Employees Award 2010, which also provides for annual leave loading of 17.5%.  Because the contractual benefit to annual leave loading is the same as the national system award entitlement to annual leave loading, it is therefore a safety net entitlement. 

28      Stass Environmental says that if the annual leave and the annual leave loading benefits in the Contracts were above safety net entitlements ‘they would have been purely entitlements, in other words, “contractual benefits”, not contemplated by the [FW Act], and accordingly, the [FW Act] would not exclude the operation of the [IR Act].’

29      Stass Environmental did not provide, and I am unaware of, any authority to support its argument that the Commission does not have jurisdiction to deal with a claim for denied contractual benefits where the benefit claimed is also a safety net entitlement under the FW Act.

Mr Grobler’s submissions

30      At the directions hearing, Mr Grobler was unsure about the identity of his former employer.  In his written submissions, Mr Grobler says he was employed by Patricia Margaret Stasikowski as trustee for Stass Family Trust trading as Stass Environmental.  I understand that Mr Grobler asks that I issue an order amending the respondent’s name accordingly. 

31      Mr Grobler says because Patricia Margaret Stasikowski is a natural person, Stass Environmental is not a national system employer.  The Commission has jurisdiction to deal with his claim.

32      Even if Stass Environmental is a national system employer, Mr Grobler says the Commission has jurisdiction to deal with his claim.

33      Mr Grobler says he is claiming unpaid annual leave and leave loading owed to him under the Contracts.  The Commission has jurisdiction to deal with such a claim: Higgins v Gateway Printing [2010] WAIRC 00296; (2010) 90 WAIG 529. 

34      Mr Grobler says the Commission should reject Stass Environmental’s characterisation of contractual benefits as safety net entitlements. 

35      A claim for contractual benefits, even if those benefits are considered safety net entitlements, can be made outside of the FW Act: s 548 of the FW Act.

Consideration

36      Along with his submissions about jurisdiction, Mr Grobler filed documents as evidence to support his submission that his employer was Patricia Margaret Stasikowski as trustee for Stass Family Trust trading as Stass Environmental. 

37      Stass Environmental has not had an opportunity to test that evidence or to put its own evidence to the Commission.

38      I do not consider that I can make a finding about whether Mr Grobler was employed by Stass Environmental Pty Ltd or Patricia Margaret Stasikowski as trustee for Stass Family Trust trading as Stass Environmental.  The parties have not been properly heard about that issue.

39      It is not necessary for me to decide whether Mr Grobler was employed by Stass Environmental Pty Ltd or Patricia Margaret Stasikowski as trustee for Stass Family Trust trading as Stass Environmental to deal with Stass Environmental’s jurisdictional objection.  This is because, as I will explain, I find that even if Stass Environmental is a national system employer, s 26 of the FW Act does not exclude the Commission’s jurisdiction to deal with Mr Grobler’s claim.

40      Section 26 of the FW Act excludes the application of the IR Act to national system employees and national system employers.  But s 26 of the FW Act does not apply so far as the law deals with a non-excluded matter: s 27(1)(c) of the FW Act.  Non-excluded matters in s 27(2) of the FW Act include claims for enforcement of contracts of employment (except in so far as the law provides for a matter in s 26(2)(e) of the FW Act, which is not relevant here). 

41      Scott ASC found in Triantopoulos that the FW Act does not exclude the Commission’s jurisdiction to deal with claims for denied contractual benefits.  I agree with her reasoning. 

42      That annual leave or annual leave loading happen to be safety net entitlements does not mean annual leave or annual leave loading are no longer contractual benefits.

43      That a national system employee may be able to apply under the FW Act to enforce a claim for failure to pay annual leave or annual leave loading as safety net contractual entitlements does not exclude this Commission’s jurisdiction under s 29(1)(b)(ii) of the IR Act.  A claim for enforcement of a contract of employment is a non-excluded matter under the FW Act.

44      At [30] of his written submissions, Mr Grobler says ‘Applicant [sic] could apply for payment of an entitlement, even if deemed to be a safety net entitlement, outside of the Fair Work instrument’, referencing s 548 of the FW Act.

45      Section 548 of the FW Act enables proceedings to be dealt with as small claims proceedings in certain circumstances.  That section is not relevant to this matter.  It does not relate to claims for denied contractual benefits made in this Commission. 

46      The difference between a safety net entitlement and a contractual benefit is not, as Stass Environmental suggests, the quantum.  The difference between a safety net entitlement and a contractual benefit is the source.  Here the source of the benefit claimed by Mr Grobler is the Contracts, not the NES or a national system award.

47      Section 541 and s 542 of the FW Act enable an inspector to enforce safety net contractual entitlements where an inspector also applies to a court for an order relating to a contravention of a safety net entitlement.  Before those sections were introduced, an inspector could not apply to a court to enforce contractual entitlements or safety net entitlements at a contractual rate of pay. 

48      The sections of the FW Act Stass Environmental relies on do not prevent an employee from enforcing contractual benefits.  That a safety net contractual entitlement has effect as an entitlement under the FW Act does not mean that a claim for denied contractual benefits is no longer a non-excluded matter under s 27(2)(o) of the FW Act.  Provision in the FW Act for enforcement of safety net contractual entitlements is in addition to, and not excluding, enforcement under state industrial laws. 

49      This construction is consistent with paragraph 2144 of the Explanatory Memorandum, Fair Work Bill 2008 (Cth):

The effect of clauses 542 and 543 is that a national system employer or national system employee may apply to the Federal Court or the Federal Magistrates Court to enforce a statutory entitlement corresponding to a safety net contractual entitlement.  This is in addition to the right to pursue breaches of a contract of employment in a State or Territory court.

50      I agree the Commission does not have jurisdiction to make orders about an entitlement under the NES or a national system award.  But Mr Grobler’s claim is for the enforcement of his contract of employment. 

51      Just because a contract provides for a benefit that is also an entitlement under the NES or a national system award does not mean that the contractual benefit must be considered a safety net entitlement for enforcement purposes. 

52      A contractual benefit exists and is enforceable as a contractual benefit even though the person entitled to it may also have an entitlement under the NES or a national system award.

53      That there may be other avenues available to Mr Grobler, including avenues under the FW Act, does not exclude this Commission’s jurisdiction to deal with Mr Grobler’s claim for denied contractual benefits. 

54      I find Mr Grobler’s claim for denied contractual benefits is a non-excluded matter under s 27 of the FW Act.

55      The Commission has jurisdiction to deal with Mr Grobler’s claim.

56      Stass Environmental’s objection to the Commission’s jurisdiction is not upheld.

57      This matter will be listed for hearing.