Ellison v Sandini Pty Ltd [2018] FCAFC 44

Federated Clerks Union of Australia, Industrial Union of Workers, W.A. Branch v Automatic Totalisators Limited (1978) 58 WAIG 1452

Learoyd v Brook [1891] 1 QB 431

Lunn v Department of Justice PR972497 [2006] AIRC 301

Nasr v Mondelez Australia Pty Ltd [2021] FWC 2802

New South Wales v Commonwealth [2006] HCA 52

Ngo v Link Printing Pty Ltd (1999) 94 IR 375

Plaintiff S157/2002 v Commonwealth [2003] HCA 2

Potter v Minahan [1908] HCA 63

Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28

Royal Automobile Club of Australia v Sydney City Council (1992) 27 NSWLR 282

Richardson v Sedemuda Pty Ltd (t/as South West Ceramics) [1985] WASC 356

S v Boulton [2006] FCAFC 99

Somerset v Stewart (1772) 98 ER 499

Taylor v The Owners – Strata Plan No 11564 [2014] HCA 9

Victoria v Commonwealth [1996] HCA 56

The United States v Fisher et al. assignees of Blight, a bankrupt (1805) 2 Cranch 358

Wilson v Anderson [2002] HCA 29

Zheng v Cai [2009] HCA 52

Result : Compliance notice confirmed; Claim dismissed

Representation:

Claimant : Mr K Kutasi (of counsel) as instructed by Solve Legal

Respondent : Ms S Power (of counsel) as instructed by the State Solicitor’s Office

REASONS FOR DECISION

1         The claimant (Arc Holdings) has applied to this Court seeking a review of a compliance notice pursuant to s 84U(1)(a) of the Industrial Relations Act 1979 (WA) (IR Act).

2         The compliance notice was issued on 8 May 2023 by the respondent (Ms Catalucci), in her capacity as Industrial Inspector under the IR Act. The compliance notice states Ms Catalucci’s reasonable belief that Arc Holdings contravened s 9(2) of the Long Service Leave Act 1958 (WA) (LSL Act), by failing to pay pro rata long service leave to Patrick McCormick upon the termination of Mr McCormick’s employment on 29 October 2020.

3         The compliance notice requires Arc Holdings to remedy the contravention by paying Mr McCormick pro rata long service leave in the amount of $9,345.21, calculated based on Mr McCormick’s period of employment from 23 October 2012 to 29 October 2020.

4         Arc Holdings does not dispute that Mr McCormick’s period of employment was from 23 October 2012 to 29 October 2020. Nor does Arc Holdings dispute Ms Catalucci’s calculation. Arc Holdings denies that Mr McCormick is entitled to pro rata long service leave upon the termination of employment under the LSL Act on the basis that:

(a)    The compliance notice incorrectly identifies Mr McCormick’s continuous employment as being between 23 October 2012 and 29 October 2020, amounting to eight years and one week, when Mr McCormick had two separate periods of continuous employment:

(i) Under an apprenticeship contract from 11 December 2012 to 1 November 2017, for a period of four years, 10 months and 22 days; and

(ii) Under a contract of employment in his role as Electrician from 2 November 2017 to 29 October 2020, for a period of two years, 11 months and 28 days.

(b) The two periods of employment cannot be considered continuous as Mr McCormick’s employment as an apprentice was not terminated at Arc Holding’s initiative, but rather due to the completion of the apprenticeship contract.

5         Pursuant to s 84U(3) of the IR Act, Arc Holdings has the burden of proving that it has not committed the contravention.

6         The parties agree the compliance notice refers to the consolidated version of the LSL Act, current between 11 September 2010 and 21 December 2021.

7         In these reasons for decision, references to the LSL Act refer to the LSL Act as applicable at 29 October 2020, unless expressly stated otherwise.

8         Arc Holdings submits that the claim involves the proper interpretation of ‘continuous employment’ in s 8(1) of the LSL Act:

An employee is entitled in accordance with, and subject to, the provisions of this Act, to long service leave on ordinary pay in respect of continuous employment with one and the same employer, or with a person who, being a transmittee, is deemed pursuant to section 6(4) to be one and the same employer.

Arc Holdings’ contentions

9         On 16 November 2023, Arc Holdings filed an Outline of Submissions contending:

(a) Mr McCormick’s employment agreement dated 23 October 2012 (First Contract), states his Employment Classification as ‘Apprenticeship’, and states the Term as ‘4.5 years’.

(b) The First Contract refers to the Arc Holdings (WA) Pty Ltd Collective Agreement 2009‑2014 (First Agreement).

(c) Clauses 33(a) and (b) of the First Agreement state:

Employees engaged on apprenticeships or traineeships are engaged as fixed term employees for the duration of those apprenticeships and traineeships. During that time, they are entitled to all the benefits of full time employment, provided that this clause overrides any contradictory clause in this Agreement.

Notwithstanding any provisions of this Agreement, should the Apprenticeship or Trainee Training Agreement and/ or Training Contract be cancelled, either by expiry or for other reasons, the employee will also be terminated.

(Arc Holdings’ original emphasis)

(d) Upon the completion of Mr McCormick’s apprenticeship, the First Contract expired, and his employment terminated in accordance with the First Contract and the First Agreement. At that time, Mr McCormick’s accrued entitlements were paid out to him, which had the effect of ‘resetting the clock’ on his long service leave accruals.

(e) The 1933 edition of the Oxford English Dictionary defines ‘continuous’ as follows:

1. Characterised by continuity; extending in space without a break; connected, unbroken.

2. Uninterrupted in time, sequence, or essence; going on without interruption.

(f) Mr McCormick’s employment was interrupted in time and sequence on the termination of the First Contract.

(g) Mr McCormick’s employment was also interrupted between his apprenticeship and re‑employment, as apprenticeships are a unique kind of contract under which different rights and responsibilities arise: Learoyd v Brook [1891] 1 QB 431. Such contracts are necessarily fixed term, largely due to their fundamental purpose of education and training: Horan v Hayhoe [1904] 1 KB 288 as cited in Richardson v Sedemuda Pty Ltd t/as South West Ceramics [1985] WASC 356, 5.

(h) Section 6 of the LSL Act provides the definition of ‘continuous employment’ as set out in s 4(1) of the LSL Act. Section 6(1) and s 6(2) set out the detailed circumstances in which periods of absence, termination, interruption, standing-down and industrial action are deemed to be included in an employee’s continuous employment. These circumstances include transmission of business. However, these circumstances do not include prior employment as an apprentice.

(i) Under s 6 of the LSL Act, three provisions apply to terminations of employment. However, these do not apply to Mr McCormick on the basis that:

(i) Mr McCormick’s employment as an apprentice was not terminated by Arc Holdings with the intention of avoiding obligations under the LSL Act or any award or industrial agreement in respect of annual leave: s 6(1)(c). Rather, Mr McCormick’s employment as an apprentice was terminated by the expiry of the term in the First Contract. Termination of employment upon the expiry of a fixed term contract is not termination at the initiative of the employer: Victoria v Commonwealth [1996] HCA 56 (Victoria); Lunn v Department of Justice PR972497 [2006] AIRC 301 (Lunn).

(ii) That s 6(1)(c) does not apply is supported by clauses 14.1 and 14.6 of the Arc Switchboards Enterprise Agreement 2014-2018 (Second Agreement):

Employees engaged on apprenticeships or traineeships are engaged as fixed term employees for the duration of those apprenticeships or traineeships. During that time, they are entitled to all the benefits of full time employment, provided that this clause overrides any contradictory clause in this Agreement.

Any time served by an employee as an apprentice shall be disregarded when consideration is given to the eligibility and/or calculation of long service leave entitlements.

(iii) Mr McCormick was re-employed within two months of the termination of his employment as an apprentice on a ground other than slackness of trade: s 6(2)(f). However, the First Contract expired on its termination date. Mr McCormick’s employment was not terminated at the initiative of Arc Holdings: Victoria; Lunn; Nasr v Mondelez Australia Pty Ltd [2021] FWC 2802 (Nasr).

(iv) Whilst Mr McCormick was re-employed within six months of the termination of his employment as an apprentice, his employment as an apprentice was not terminated on the ground of slackness of trade: s 6(2)(g).

(j) Section 6 is exhaustive of the absences and interruptions that are deemed not to break continuous employment. By virtue of the negative implication canon, termination of employment due to the expiry of a fixed term contract is a circumstance the legislature failed to exempt from breaking continuous employment: New South Wales v Commonwealth [2006] HCA 52.

(k) Section 6 should not be construed to fill ‘gaps disclosed in legislation’ or make an insertion which is ‘too big, or too much at variance with the language in fact used by the legislature’: Taylor v The Owners – Strata Plan No 11564 [2014] HCA 9 [39].

(l) Reading into s 6 a circumstance that the legislature failed to include could give rise to a constitutional issue related to the separation of powers: Plaintiff S157/2002 v Commonwealth [2003] HCA 2 [102] (Gaudron, McHugh, Gummow, Kirby and Hayne JJ); Zheng v Cai [2009] HCA 52 [28] (French CJ, Gummow, Crennan, Kiefel and Bell JJ).

(m) Judges should not give effect to an intention which Parliament would have had if it had thought about it, but did not: Construing Statutes, 20 Statute L. Rev. 107, 110 (1999).

(n) Section 84 of the Industrial Relations Legislation Amendment Act 2021 (WA) (Amending Act) amended s 6 to include s 6(7) in the LSL Act as applicable at the date of the claim:

If an employee enters into a contract of employment with an employer within 52 weeks after completing an apprenticeship with the employer, the period of apprenticeship is taken to be a part of the employee’s continuous employment with the employer.

(o) It is strongly inferred that s 6(7) was included because it was not previously contemplated that a period of apprenticeship would form part of an employee’s continuous employment. Section 4 and s 6 have not been substantially amended since the introduction of the LSL Act in 1958, which supports Arc Holdings’ argument that the legislature had provided an exhaustive list of circumstances where employment is deemed continuous despite an intervening occurrence or circumstance.

(p) The inclusion of s 6(7) is an admission that the previous iteration of the LSL Act did not intend for the period of apprenticeship to be considered as part of the employee’s continuous employment. The amendments to the LSL Act were the result of Parliament intentionally expanding the reach of the LSL Act: Minister’s Second Reading Speech to Parliament, Hansard, Legislative Council of Western Australia, 17 November 2021, p5551:

The bill will strengthen protections for vulnerable workers, while at the same time modernise the state industrial relations system. The state system was last comprehensively reviewed and updated in 2002 by the Gallop Labor government. The system is overdue for reform, which this bill will comprehensively deliver on.

(Arc Holdings’ original emphasis)

(q) The compliance notice should be set aside because on the proper interpretation of ‘continuous employment’ in s 6, Mr McCormick’s employment was only continuous for the duration of his employment as an Electrician from 2017. His period of employment as an apprentice cannot be included on the basis that:

(i) On the ordinary meaning of ‘continuous’, the termination of Mr McCormick’s employment as an apprentice interrupted his employment.

(ii) The termination of Mr McCormick’s employment as an apprentice is not remedied by being deemed to constitute continuous employment under s 6.

(iii) Principles of statutory construction, including omitted-case, negative inference, and non-derogation from the common law, as properly applied, support Arc Holdings’ contentions.

Ms Catalucci’s contentions

10      On 23 November 2023, Ms Catalucci filed an Outline of Submissions contending:

(a) There is no requirement at law that an employee be employed under a single contract to be entitled to long service leave. An employee may accrue long service leave under multiple contracts provided there is no break in continuous employment: Federated Clerks Union of Australia, Industrial Union of Workers, W.A. Branch v Automatic Totalisators Limited (1978) 58 WAIG 1452 (Federated), 1455.

(b) Mr McCormick’s employment was not interrupted. The First Contract ended on 1 November 2017. On 2 November 2017, Mr McCormick’s employment contract as an Electrician began (Second Contract).

(c) It is irrelevant how the First Contract ended; whether it was terminated by Arc Holdings or by a fixed term that ran its course. It is the continuity of employment that matters, not the continuity of contract.

(d) On its face, clause 14.6 of the Second Agreement seems to exclude from long service leave calculations a period of service as an apprentice. However, s 29(2) of the Fair Work Act 2009 (Cth) (FW Act) provides that in the event of an inconsistency between a term of an enterprise agreement dealing with a non-excluded matter under the FW Act (such as long service leave) and a State law, the latter prevails: FW Act, s 27(1)(c) and s 27(2)(g).

(e) Section 5 of the LSL Act only allows an employer to contract out of long service leave entitlements if an adequate benefit in lieu is provided, and the agreement is in writing. There is no evidence of this, and in any case, enterprise agreements would not meet the criteria of an agreement between an employer and an employee as required by s 5.

(f) In any case, clause 14.1 of the Second Agreement specifies that apprentices are entitled to all the benefits of a full time employee. It notes that this provision overrides any contradictory clause, and clause 7 acknowledges that employees are entitled to long service leave in accordance with applicable State legislation. Therefore, when read as a whole, clause 14.6 does not operate to disregard Mr McCormick’s long service leave entitlements.

(g) Section 4(1)(a) of the LSL Act defines an ‘employee’ as including ‘any person employed by the employer to do work for hire or reward including an apprentice’.

(h) Section 4 always contemplated that an apprentice would be an employee for the purposes of the LSL Act.

(i) If the period of apprenticeship did not contribute to the period of continuous employment, apprentices would not accrue a long service leave entitlement after 10 years or receive a pro rata entitlement upon termination after seven years of continuous employment, which is typical for apprenticeships lasting between three to four years.

(j) The reference to apprentices in s 4 would be meaningless unless service as an apprentice counts towards an employee’s continuous employment.

(k) There is nothing in the LSL Act to suggest an apprentice’s service should be excluded from their period of continuous employment.

The Hearing

11      At the hearing, Arc Holdings’ counsel argued that:

(a) The LSL Act does not define continuous employment. Therefore, the LSL Act is to be read in conjunction with the common law understanding of continuous service.

(b) Section 6 of the LSL Act outlines the exceptions for what is deemed continuous employment. Section 6 does not include termination and re-commencement of employment. The LSL Act would need to have specifically included this to override the common law understanding of continuous service.

(c) While the LSL Act refers to continuous employment, there is no practical difference between continuous service and continuous employment. They have the same meaning.

(d) The common law meaning of continuous employment does not encompass all periods of employment. It does not include employment that has been broken by resignations or terminations.

(e) When Mr McCormick’s apprenticeship ended, his employment was terminated. Although Mr McCormick was re-employed by Arc Holdings the following day, his continuous employment was broken when his apprenticeship ended.

(f) The FW Act also does not define continuous employment. In respect of the FW Act, the courts have found that continuous employment is broken by a resignation: Ngo v Link Printing Pty Ltd (1999) 94 IR 375 (Ngo) [16]:

The relevant law was the subject of extensive consideration by Gray J in Birrell v Australian National Airlines Commission (referred to in par 8). The conclusion to be drawn from that case is, we think, clear – a unilateral withdrawal of a notice of termination of a contract of employment is not possible (at 110). There was some suggestion by the appellant that Birrell has been overtaken by later cases. We do not agree; Birrell was applied by the Federal Court in 1993 in Saddington v Building Workers Industrial Union of Australia (1993) 49 IR 323 at 336, by the Commission in the same year in Ampol Ltd v Transport Workers Union of Australia (1993) 54 IR 134 at 138 and in 1995 by Ryan J as a member of the Industrial Relations Court in Fryar v Systems Services Pty Ltd (1995) 60 IR 68 at 87-88.

(g) The fact that Mr McCormick re-commenced employment the following day is irrelevant to the LSL Act. Mr McCormick’s employment was not continuous. It was broken.

(h) Ms Catalucci erred in her written submission in stating that apprenticeships generally last three to four years and implying that if this did not form part of the employee’s continuous employment, an apprentice would not qualify for a long service leave entitlement, rendering s 4, which includes an apprentice in the definition of employee, as meaningless. That submission is incorrect on the basis that:

(i) Firstly, it assumes inaccurate facts about apprentices. While many apprentices begin their first job as an apprentice, others may have worked for an employer before starting an apprenticeship, such as commencing employment as a trades assistance before beginning an apprenticeship as an electrician. This means it is entirely possible for an employee to qualify for long service leave while still an apprentice.

(ii) Secondly, it does not understand the history of apprenticeships. Apprenticeships started as a form of bonded servitude and were for longer periods of time than they are today. Around the time of the second world war, the common apprenticeship in Australia lasted seven years. The LSL Act was written in 1958, and s 4 and s 6 have not been amended at any stage between then and 2021 until the new s 6(7) was inserted in 2021. This means s 4 did, and continues to have, work to do in relation to apprentices.

(iii) Thirdly, an apprenticeship may go beyond seven years. Mr McCormick took five years to complete his apprenticeship. There is nothing preventing an apprentice taking time to complete their apprenticeship. An apprentice may take longer to complete their apprenticeship for reasons including illness, misadventure, or failing at college.

(iv) Fourthly, apprenticeships were unregulated prior to the Industrial Training Act 1975 (WA) (Training Act), now the Vocational Education and Training Act 1996 (WA) (VET Act), which introduced the concept of a training contract specifying a fixed term contract of employment. The VET Act overrides the LSL Act. This could not have been contemplated when the LSL Act was written in 1958. If Parliament did not intend this, it could have amended the LSL Act, but chose not to do so until 2021.

(i) It is possible for an employer to agree to recognise an employee’s service as an apprentice as continuous service on re-employment after the apprenticeship. That is a matter of contract between the employer and employee. However, in the case of Arc Holdings and Mr McCormick, it was agreed that there would be a termination of employment at the end of the apprenticeship. As a result, Arc Holdings paid Mr McCormick his accrued but untaken annual leave entitlements upon the completion of his apprenticeship.

(j) No concerns have been raised regarding Arc Holdings’ payment of Mr McCormick’s annual leave entitlements at that time. If Arc Holdings were not entitled to do so, it would have constituted an offence. Arc Holdings fulfilled its contractual obligations and complied with both State and Federal law.

(k) At the conclusion of Mr McCormick’s apprenticeship, it was at the discretion of Arc Holdings to re‑employ him. His re‑employment does not alter the fact that there was a break in Mr McCormick’s continuity of employment. The temporal proximity of the two contracts between Arc Holdings and Mr McCormick is not relevant.

(l) Further and in the alternative, s 27 of the FW Act is subsidiary to s 26, which states:

[The FW] 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.

(m) The State cannot use the LSL Act to circumvent s 26 of the FW Act. Therefore, if the State sought to legislate that continuous employment should be treated differently under the LSL Act than under the FW Act, the LSL Act needs to explicitly state this. Firstly, the LSL Act does not explicitly state that continuous employment has a different meaning than it does under Federal law. Secondly, s 26 of the FW Act would render it illegal for the LSL Act to do so.

(n) The definition of continuous employment is a matter of Federal law; the State cannot legislate or determine this aspect. Consequently, the Federal understanding of continuous employment applies to Mr McCormick’s employment. This means that continuous employment under the LSL Act must be interpreted with the same meaning as it would have if these proceedings were brought for the non‑payment of annual leave under the FW Act.

(o) Further and in the alternative, Ms Catalucci’s written submissions regarding the interpretation of the LSL Act fails on the principle of legality: Wilson v Anderson [2002] HCA 29 [8]:

In the construction or interpretation of a statute, the object of a court is to ascertain, and give effect to, the will of Parliament. Courts commonly refer to the ‘intention of the legislature’. This has been described as a ‘very slippery phrase’, but it reflects the constitutional relationship between the legislature and the judiciary. … Parliament manifests its intention by the use of language, and it is by determining the meaning of that language, in accordance with principles of construction established by the common law and statute, that courts give effect to the legislative will.

(footnote omitted)

(p) A vital common law principle of construction is the principle of legality in understanding the intention of Parliament. It dates back to Somerset v Stewart (1772) 98 ER 499 and appeared in the United States Supreme Court decision of The United States v Fisher et al. assignees of Blight, a bankrupt (1805) 2 Cranch 358, 390:

Where rights are infringed, where fundamental principles are overthrown, where the general system of the laws is departed from, the legislative intention must be expressed with irresistible clearness to induce a court of justice to suppose a design to effect such objects.

(q) The principle of legality has been adopted in Potter v Minahan [1908] HCA 63 and S v Boulton [2006] FCAFC 99 (Boulton) [120]-[127]:

The Statutory Exclusion of Common Law Rights

120 The principles which govern the statutory abrogation of common law rights are well settled. They have been stated by the High Court on numerous occasions and have been analysed and applied by Full Federal Courts twice in the last three years. It is unnecessary to set out the detail of each of those authorities, or to refer to every one of them, but the following principles can be distilled.

121 First, a statue is not to be construed as abrogating important common law rights and privileges except by clear words or necessary implication; Sorby v The Commonwealth (1983) 152 CLR 281 at 289-90, 309, 311, 316; Daniels Corporation International Pty Limited v Australian Competition and Consumer Commission (2002) 213 CLR 543 at [11]; A v Boulton (2004) 136 FCR 420 at [54]; Griffin v Pantzer (2004) 137 FCR 209 at [46].

122 Second, an intention to exclude a common law privilege may be gleaned from a statute even though express words of exclusion are not used; Sorby at 289.

123 Third, the question of whether the statute impliedly abrogates a privilege is to be determined upon the proper construction of the statute, considered as a whole, and from its character and purpose; Sorby at 289, 309.

124 Fourth, important common law privileges are not to be lightly abrogated and the oft cited phrase ‘necessary implication’ requires that there be a high degree of certainty as to the intention of the legislature; the intention must be manifested by unmistakable and unambiguous language; Hamilton v Oades (1989) 166 CLR 486 at 495; Coco v The Queen (1994) 179 CLR 427 at 437.

125 Fifth, what is required is that there be a manifestation or indication that the legislature has directed its intention to the question of abrogation and has consciously determined that the privilege is to be excluded; Coco v The Queen at 437; Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 at [30] per Gleeson CJ.

126 Sixth, general words will not be sufficient to disclose the requisite intention unless it appears from the character and purpose of the provision that the obligation was not intended to be subject to any qualification; Pyneboard Pty Ltd v Trade Practices Commission (1983) 152 CLR 328 at 341; Coco v The Queen at 438; Plaintiff S157 at [30]; Griffin v Pantzer at [53].

127 Seventh, the presumption that the legislature does not intend to abrogate entrenched common law rights may be displaced by implication if it is necessary to prevent the statute from being rendered inoperative or meaningless or from frustrating the evident statutory purpose; Mortimer v Brown (1970) 122 CLR 493 at 495; Coco v The Queen at 438.

(r) Arc Holdings and Mr McCormick decided to enter into a fixed term employment contract terminating at the conclusion of the apprenticeship. Any interpretation of continuous employment under the LSL Act that contravenes Arc Holdings’ common law right to contract with Mr McCormick on the terms they have chosen would violate the principles of legality.

(s) If Parliament intended for the period of employment between the end of a fixed term contract and the commencement of a new contract to be counted towards an employee’s continuous employment, it would have needed to expressly state this in the LSL Act.

(t) There is no implication from the text of the LSL Act to read into the LSL Act such an intention: Attorney-General (SA) v Corporation of the City of Adelaide [2013] HCA 3 [42]:

Statutes are construed, where constructional choices are open, so that they do not encroach upon fundamental rights and freedoms at common law. The common law presumption against the parliamentary intention to infringe upon such rights and freedoms has been described as an aspect of a ‘principle of legality’ which governs the relationship between parliament, the executive and the courts. The presumption is of long standing and has been restated over many years. It can be taken to be a presumption of which those who draft legislation, regulations and by-laws are aware. To apply it is to act conformably with legislative intention as explained by this Court in Lacey v Attorney‑General (Qld).             

(footnotes omitted)

(u) In summary, Mr McCormick’s employment is only continuous for the duration of his employment under the Second Contract. His period of employment under the First Contract cannot be included on the basis that:

(i) The ordinary meaning of ‘continuous’ meant Mr McCormick’s employment was interrupted on the termination of his employment at the end his apprenticeship.

(ii) The termination of his employment was not remedied by being deemed to constitute continuous employment under s 6.

(iii) The principles of statutory construction including the principle of admitted case, negative inference and non‑derogation from common law support Arc Holdings’ argument.

12      At the hearing, Ms Catalucci’s counsel argued that:

(a) There is a distinction between continuous employment and continuous service. Arc Holdings framed the issue in this case as the proper interpretation of continuous employment in the LSL Act, thus the appropriate definition to be determined is continuous employment, not continuous service.

(b) There was no break in Mr McCormick’s employment. The First Contract ended on one day, and the Second Contract began the next day. Continuous employment does not necessitate a single contract of employment. An employee may have multiple contracts of employment and still maintain a period of continuous employment.

(c) If continuous employment were considered to break by the conclusion of one contract and the beginning of a new one, then an employer could circumvent their long service leave obligations by terminating and initiating new contracts every few years.

(d) Section 6 of the LSL Act is a deeming provision. If a period of employment is not deemed to be excluded, then it is included.

(e) Mr McCormick’s employment was continuous, thus there is no necessity to resort to the deeming provisions in s 6.

(f) In any case, s 6 is not relevant to the matter of continuous employment in this instance. To invoke the deeming provisions, Arc Holdings must first demonstrate that the employment was not continuous, which it has not done.

(g) Mr McCormick went home from work on 1 November 2017, and returned to work the next day on 2 November 2017. This does not constitute a break, absence, or interruption in employment for the purposes of the LSL Act.

(h) It is inconsequential how the First Contract concluded, whether it was terminated by Arc Holdings or if it was a fixed term contract that ran its course. What matters is the continuity of employment rather than the continuity of contract.

(i) The termination of the First Contract does not create an interruption in time, as argued by Arc Holdings. Mr McCormick was not absent between the First Contract and the Second Contract.

(j) The existence of two contracts is no barrier to an entitlement to long service leave. There is no requirement at law for Mr McCormick to be employed under a single contract: Federated, 1455:

However, even if the correct conclusion should be that there was no subsisting contract of service over the qualifying period, it does not follow that clause 19 incorporating the provisions of long service leave does not apply in the circumstances.

…

There is no doubt in this case that there was only one employer over the qualifying period and there is no doubt that there was continuous service over the same period of the type envisaged by the award. why therefore should the worker be denied long service leave, merely because the continuous service followed from a series of independent contracts rather than pursuant to a subsisting contract of service over the qualifying period?

(k) There is no basis for Arc Holdings’ contention that the termination or expiry of the First Contract has the effect of resetting the clock for Mr McCormick’s long service leave entitlements.

(l) Arc Holdings relies on clauses 14.1 and 14.6 of the Second Agreement for the contention that Mr McCormick’s employment was interrupted when the First Contract ended. Clause 14.6 effectively states that time served as an apprentice is disregarded when considering eligibility to, or calculation of, long service leave entitlements. However, there is no basis for this contention because:

(i) Firstly, s 29 of the FW Act provides that the LSL Act prevails over the Second Agreement where there is any inconsistency:

29  Interaction of modern awards and enterprise agreements with State and Territory laws

(1)  A modern award or enterprise agreement prevails over a law of a State or Territory, to the extent of any inconsistency.

(2)  Despite subsection (1), a term of a modern award or enterprise agreement applies subject to the following:

(a)  any law covered by subsection 27(1A);

(b)  any law of a State or Territory so far as it is covered by paragraph 27(1)(b), (c) or (d).

Note: In addition, a term of an enterprise agreement could be an unlawful term and of no effect if it requires or permits a designated emergency management body to act other than in accordance with a State or Territory law and this affects or could affect the body’s volunteers (see paragraphs 194(baa), 195A(1)(d) and 253(1)(b)).

(3)  Despite subsection (2), a term of a modern award or enterprise agreement does not apply subject to a law of a State or Territory that is prescribed by the regulations as a law to which modern awards and enterprise agreements are not subject.

(ii) Secondly, s 5 of the LSL Act only permits Arc Holdings to contract out of the LSL Act if it provides Mr McCormick with an adequate benefit in lieu of his long service leave entitlements, and the agreement is documented in writing. While Arc Holdings and Mr McCormick may have agreed to terminate the First Contract at the conclusion of his apprenticeship, there is no evidence that they agreed to forfeit his long service leave entitlements. There is no evidence that both prerequisites of s 5, for an adequate benefit in lieu and a written agreement, were fulfilled.

(iii) Thirdly, while clause 14.1 of the Second Agreement states that apprentices are engaged as fixed term employees, the clause also states that apprentices are entitled to all the benefits of full time employment. The clause expressly states that it overrides any other contradictory clause in the Second Agreement. Clause 7.6 of the Second Agreement states:

The Employee shall be entitled to long service leave in accordance with applicable State or Territory legislation.

(v) Thus, when reading the Second Agreement as a whole, and together with the LSL Act, clause 14.6 of the Second Agreement does not operate to disregard Mr McCormick’s entitlements under the LSL Act. Additionally, to the extent that it attempts to do so, it would have no effect due to the operation of s 5 of the LSL Act.

(m) While s 6(7) was inserted in the LSL Act as applicable at the date of the claim by the Amending Act, there is no basis for Arc Holdings’ contention that this leads to a strong inference that s 6(7) was added to cover a situation not previously contemplated, on the basis that:

(i) Firstly, s 6(7) refers to a situation where there is a gap in employment of up to one year. By contrast, Mr McCormick went home one day and came back the next.

(ii) Secondly, s 4 of the LSL Act has always included an apprentice in the definition of ‘employee’. This reflects that Parliament did turn its mind to apprentices, and considered a period of apprenticeship would form part of an employee’s continuous employment.

(iii) If this was not the case, the Amending Act could have amended s 4. Further, and in response to Arc Holdings’ argument that apprenticeships were historically for longer periods, the Amending Act could have removed s 4 if it was an outdated provision. However, the Amending Act did neither of these things.

13      In reply, counsel for Arc Holdings argued that:

(a) Arc Holdings does not argue that two employment contracts cause a break in continuous employment. Rather, the termination of Mr McCormick’s employment at the conclusion of his apprenticeship resulted in the break in his continuous employment. The duration of the break, whether it was for a day, a week, a month or even a minute, is irrelevant. It is the termination of employment that breaks continuity of employment.

(b) Further, Arc Holdings does not argue that all fixed term contracts result in the termination of an employee’s employment at the conclusion of the fixed term. Many employees are re‑employed following a fixed term and will sign a new employment contract. It is a matter for those individual contracts whether they recognise or do not recognise continuous service. In Mr McCormick’s case, the First Contract was for the term of his apprenticeship. When his apprenticeship ended, the First Contract ended, and his employment was terminated as a matter of law. It is the termination of Mr McCormick’s employment that leads to the break in Mr McCormick’s continuity of employment.

(c) Arc Holdings argues that the LSL Act must cede to an employer and employee’s common law right to contract in relation to their employment relationship, unless the LSL Act expressly states otherwise. The LSL Act does not state that separate periods of employment, broken by a termination of employment, count towards continuous employment. The LSL Act now states this on the insertion of s 6(7) in 2021. If two separate periods of employment were always to have counted towards continuous employment, then there would have been no need to add s 6(7).

(d) Arc Holdings argues that it is irrelevant that s 4 of the LSL Act defines an ‘employee’ as including an apprentice because at the time Mr McCormick claimed an entitlement to long service leave, he was not an apprentice. The relevant issue is whether Mr McCormick’s previous periods of employment are considered continuous. Arc Holdings argues that his employment under the First Contract does not count because there was a termination of employment, which necessarily breaks the continuity of his employment.

Consideration

14      There is no dispute that:

(a) Arc Holdings is an ‘employer’ under the LSL Act and at all relevant times was Mr McCormick’s employer.

(b) At all relevant times Mr McCormick was employed by Arc Holdings and was its ‘employee’ as defined by s 4(1) of the LSL Act:

(a) any person employed by an employer to do work for hire or reward including an apprentice;

(b) any person whose usual status is that of any employee;

(c) Mr McCormick was first employed by Arc Holdings on 11 December 2012, and his last day of employment with Arc Holdings was 29 October 2020.

(d) During his employment, Mr McCormick was employed under the First Contract from 11 December 2012 to 1 November 2017, and under the Second Contract from 2 November 2017 to 29 October 2020.

(e) If the entirety of Mr McCormick’s employment with Arc Holdings constitutes continuous employment under the LSL Act, Mr McCormick would be entitled to the amount of long service leave stated in the compliance notice.

15      Arc Holdings submits that the First Contract was for the duration of Mr McCormick’s apprenticeship, and on the completion of the apprenticeship, the First Contract ended in accordance with its term, and Mr McCormick’s employment was terminated. The termination of employment is evidenced by Arc Holdings paying to Mr McCormick his accrued but untaken annual leave entitlements. The termination of employment broke the continuity of Mr McCormick’s employment, such that at 29 October 2020, Mr McCormick had not completed at least seven years of continuous employment to become entitled to long service leave under s 8(3) of the LSL Act.

16      Ms Catalucci submits that the First Contract and the Second Contract were contiguous; there was no break, absence or interruption in Mr McCormick’s employment to break the continuity of his employment under the LSL Act, such that Mr McCormick was entitled to a pro rata payment of long service leave under s 8(3) of the LSL Act on the termination of his employment.

17      Therefore, this matter involves the statutory construction of ‘continuous employment’ under the LSL Act. Specifically, whether the termination of the First Contract breaks the continuity of Mr McCormick’s employment under the LSL Act, as Arc Holdings contends.

18      In undertaking the task of construing the LSL Act, I will apply the oft cited principles of statutory construction in Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28 (Project) [69]‑[71] (McHugh, Gummow, Kirby and Hayne JJ):

The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined ‘by reference to the language of the instrument viewed as a whole’. In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that ‘the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed’. Thus, the process of construction must always begin by examining the context of the provision that is being construed.

A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions. Reconciling conflicting provisions will often require the court ‘to determine which is the leading provision and which the subordinate provision, and which must give way to the other’. Only by determining the hierarchy of the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme.

Furthermore, a court construing a statutory provision must strive to give meaning to every word of the provision. In The Commonwealth v Baume Griffith CJ cited R v Berchet to support the proposition that it was ‘a known rule in the interpretation of Statutes that such a sense is to be made upon the whole as that no clause, sentence, or word shall prove superfluous, void, or insignificant, if by any other construction they may all be made useful and pertinent’.

(footnotes omitted)

19      I will also apply s 8 and s 18 of the Interpretation Act 1984 (WA) (Interpretation Act):

8. Written laws always speaking

A written law shall be considered as always speaking and whenever a matter or thing is expressed in the present tense, it shall be applied to the circumstances as they arise, so that effect may be given to every part of the law according to its true spirit, intent, and meaning.

18. Purpose or object of written law, use of in interpretation

In the interpretation of a provision of a written law, a construction that would promote the purpose or object underlying the written law (whether that purpose or object is expressly stated in the written law or not) shall be preferred to a construction that would not promote that purpose or object.

20      The LSL Act does not define ‘employment’ or ‘continuous employment’ and therefore these words should be construed in accordance with their ordinary meaning.

21      Section 6(1)(a) to s 6(1)(d) outline the periods of absence, periods following the termination of employment by an employer to avoid the obligation to pay leave entitlements, and periods during which the employment is interrupted by military or other service, that are deemed to be included in an employee’s employment.

22      Section 6(2)(a) to s 6(2)(i) outline the periods of interruption arising from a transmission of business, periods of absence, periods of stand-down, and periods between an employee’s termination of employment and re-employment within a certain number of months, that are deemed to be included in an employee’s continuous employment.

23      I agree with Arc Holdings’ submission that s 6 does not specifically deem a period following the termination of a fixed term apprenticeship contract and an employee’s re-employment, as continuous employment. However, I disagree with its submission that s 6 needs to expressly state this otherwise the period does not count for the following reasons:

(a) Firstly, s 6 is a deeming provision. Deeming provisions involve artificial assumptions, and ‘it will frequently be difficult or unrealistic to expect the legislature to be able satisfactorily to [prescribe] the precise limit to the circumstance in which, or the extent to which, the artificial assumptions are to be made’: Ellison v Sandini Pty Ltd [2018] FCAFC 44 [209]-[213].

(b) Secondly, s 6 operates to treat certain periods of absences from, and interruptions to, employment that might not have counted towards an employee’s continuous employment as deemed to be counted. This means, s 6 would have no role to play if an employee was not absent from, or there was no interruption to, their employment.

(c) Thirdly, s 6 is intended to operate broadly and not be limited by the circumstances stated in the provision. This is apparent from s 6(2)(i) which deems any absence not specified in s 6(1) and s 6(2) as counting towards an employee’s continuous employment, unless the employer gives written notice to the employee during the absence or within 14 days of the termination of the absence, that the continuity of their employment has been broken by the absence.

24      I find Arc Holdings’ reliance on Victoria, Lunn, Nasr and Ngo to support its submission that Mr McCormick’s employment terminated at the end of the First Contract by operation of law thereby breaking his continuous employment under the LSL Act, to be unsustainable for the following reasons:

(a) In Victoria, the States of Victoria, South Australia and Western Australia impugned the Federal government’s authority to legislate regarding certain industrial relations matters traditionally governed by State governments. The High Court was asked to determine the constitutional validity of certain provisions amending the Industrial Relations Act 1988 (Cth) made by the Industrial Relations Reform Act 1993 (Cth) and the Industrial Relations Amendment Act (No 2) 1994 (Cth). The full passage containing the proposition relied upon by Arc Holdings follows [140]:

It is also necessary to consider whether, in terms, the prohibitions in ss 170DB, 170DC, 170DE(l) and 170DF impair the right of the States to determine ‘the term of appointment [of those whom they wish to employ]’. The relevant words of each prohibition are that ‘[a]n employer must not terminate an employee's employment’. In the case of s 170DC, the prohibition is elaborated by reference to a specific reason and, in the case of ss 170DE(l) and 170DF, by reference to specific reasons. As a matter of ordinary language, an employer does not terminate an employee's employment when his or her term of employment expires. Rather, employment comes to an end by agreement, or, where the term is fixed by award or statute, by operation of law.

(footnote omitted)

(b)   It is readily apparent from the above, that the provisions the High Court were considering in this passage involves the termination of employment by the employer. This passage does not involve the issue of continuous employment.

(c) Lunn and Ngo were unfair dismissal cases in the Australian Industrial Relations Commission, and Nasr was an unfair dismissal case in the Fair Work Commission. It is trite to say that these decisions are not binding on this Court. But in any event, these decisions do not deal with the issue of continuous employment. Rather, being unfair dismissal cases, they deal with the question of whether the employee’s employment terminated at the initiative of the employer, or whether the employment terminated for other reasons such that the employee cannot claim they were dismissed. In Lunn and Nasr, the Commission found the employment ended by the effluxion of time, and therefore the employee’s employment was not terminated at the employer’s initiative. In Ngo, the Commission found that the employee had voluntarily resigned; the employment terminated at the employee’s own initiative and not at the initiative of the employer.

25      Pursuant to s 84U(3) of the IR Act, Arc Holdings has the burden of proving its case. I do not find that Victoria, Lunn, Nasr and Ngo stand for the proposition that it argues they do.

26      Victoria, Lunn, Nasr and Ngo concern the issue of whether the termination of employment was at the employer’s initiative. Under the LSL Act, the relevance of a termination of employment ‘by the employer’ arises under:

(a) Section 6(1)(c), s 6(2)(f) and s 6(2)(g), which deem any period following the termination of the employment by the employer as part of the employee’s employment and continuous employment if the termination arose for a reason outlined in the provision.

(b) Section 8(2)(c)(ii) and s 8(3)(b), which disentitle an employee from receiving a pro rata long service leave payment on the termination of employment for serious misconduct.

27      Unless the First Contract was terminated in circumstances arising under s 6(1)(c), s 6(2)(f), s 6(2)(g), s 8(2)(c)(ii) or s 8(3)(b), I agree with Ms Catalucci’s submission that it is irrelevant whether the First Contract terminated by the effluxion of time or at Arc Holdings’ initiative.

28      I find Arc Holdings submissions that ‘continuous employment’ under the LSL Act has the same meaning as continuous service, that it should be construed as having the same meaning as under the FW Act, and that s 26 of the FW Act would render it illegal for the LSL Act to be construed inconsistently with the FW Act, to be untenable for the following reasons:

(a) Firstly, s 26(2)(c) of the FW Act expressly excludes a State or Territory law dealing with long service leave from the definition of a ‘State or Territory industrial law’ under s 26(1) of the FW Act:

(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:

…

(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

(emphasis added)

(b) Secondly, s 27(1)(c) and s 27(2)(g) of the FW Act expressly state that s 26 of the FW Act does not apply to a law of a State or Territory that deals with long service leave:

(1)  Section 26 does not apply to a law of a State or Territory so far as:

…

(c) the law deals with any non-excluded matters; or

(2)  The non-excluded matters are as follows:

…

(g)  long service leave, except in relation to an employee who is entitled under Division 9 of Part 2-2 to long service leave;

(emphasis added)

(c) Thirdly, the FW Act does not contain a definition of continuous employment.

(d) Fourthly, implicit in the definition of ‘service’ under s 22(1) of the FW Act is that a period of service is narrower than, and thus necessarily different to, a period of employment:

A period of service by a national system employee with his or her national system employer is a period during which the employee is employed by the employer, but does not include any period (an excluded period) that does not count as service because of subsection (2).

(e) Fifthly, the LSL Act does not refer to ‘service’, but to an employee’s ‘employment’ and to their ‘continuous employment’.

29      I find Arc Holdings’ submissions that the Training Act, now the VET Act, overrides the LSL Act, and that if Parliament did not intend this, it could have amended the LSL Act, to be untenable for the following reasons:

(a) Firstly, it is not clear on what basis Arc Holdings submits that the Training Act, now VET Act, overrides the LSL Act.

(b) If it is because the Training Act was enacted after the LSL Act, then I find there is no basis for its submission as I do not find the Training Act raises any irreconcilable conflict with the LSL Act: Royal Automobile Club of Australia v Sydney City Council (1992) 27 NSWLR 282 (RAC), 294.

(c) Further, as the Training Act was enacted later, and absent any express repeal of any provisions of the LSL Act, I consider it to be safe to presume ‘that Parliament intended the two statutes to work harmoniously together so that each operates within its respective field of application’: RAC, 294.

(d) Secondly, Parliament has amended the LSL Act.

(e) Section 46 of the Industrial Relations Legislation Amendment and Repeal Act 1995 (WA), amended s 4(1) of the LSL Act to insert the following definition of an ‘apprentice’:

‘apprentice’ means an apprentice under the Industrial Training Act 1975;

(f) Section 54 of the Training Legislation Amendment and Repeal Act 2008 (WA) amended both the definitions of ‘apprentice’ and ‘employee’ in s 4(1) of the LSL Act:

(3)  In section 4(1) insert in alphabetical order:

 apprentice means a person who is an apprentice under a training contract registered under the Vocational Education and Training Act 1996 Part 7 Division 2;

(4)  In section 4(1) in the definition of employee in paragraph (a) delete ‘apprentice or industrial trainee;’ and insert:

 apprentice;

(g) These amendments suggest that Parliament turned its mind to the interaction of the Training Act and the LSL Act in 1995, and the interaction of the VET Act and the LSL Act in 2008, and did not consider their interaction to raise any conflict or concern that the statutes did not work harmoniously together.

30      I agree with Ms Catalucci’s submissions that s 4 of the LSL Act always contemplated that an apprentice would be an employee for the purposes of the LSL Act.

31      Section 4(1) of the LSL Act defines an ‘employee’ as expressly including an apprentice:

employee means, subject to subsection (3) –

(a)  any person who is employed by an employer to do work for hire or reward including an apprentice; or

(b)  any person whose usual status is that of an employee;

(c)  any person employed as a canvasser whose services are remunerated wholly or partly by commission or percentage reward; or

(d)  any person who is the lessee of any tools or other implements of production or of any vehicle used in the delivery of goods or who is the owner, whether wholly or partly, of any vehicle used in the transport of goods or passengers if the person is in all other respects an employee;

(emphasis added)

32      The amendment made to s 4(1) of the LSL Act by s 83(2) of the Amending Act reiterates that an ‘employee’ includes an apprentice:

employee –

(a)  means –

(i)  a person who is employed by an employer to do work for hire or reward, including as an apprentice; or

(ii)  a person whose usual status is that of an employee;

and

(b)  includes a casual or seasonal employee;

(emphasis added)

33      This definition of employee, expressly including an apprentice, applies to all provisions of the LSL Act, other than s 4(3) which outlines when a person does not qualify as an employee under s 4(1): s 6 of the Interpretation Act.

34      Section 8(1) of the LSL Act states:

An employee is entitled in accordance with, and subject to, the provisions of this Act, to long service leave on ordinary pay in respect of continuous employment with one and the same employer …

(emphasis added)

35      As the definition of ‘employee’ is defined to expressly include an apprentice, applying s 6 of the Interpretation Act to s 8(1) of the LSL Act, means it should be construed as:

An apprentice is entitled in accordance with, and subject to, the provisions of this Act, to long service leave on ordinary pay in respect of continuous employment with one and the same employer…

(emphasis added)

36      Given an apprentice is an employee as defined by s 4(1) of the LSL Act and applying Project and s 8 and s 18 of the Interpretation Act, I find ‘continuous employment’ should be construed to include a period of apprenticeship.

37      I find the construction of s 4 and s 8 of the LSL Act as providing for a period of apprenticeship consistent with Project [71] and Browne v Director General, Department of Water and Environmental Regulation [2020] WASCA 16 [61] (Buss and Murphy JJ), that a court construing a statutory provision must strive to give meaning to every word of the provision.

38      I also find this construction supported by s 7(1) of the LSL Act, which deems an employee’s employment for the purposes of the LSL Act as commencing on the day the employee was first employed by the employer:

For the purpose of this Act the employment of an employee by the employer by whom he is employed on the coming into operation of this Act shall, subject to the provisions of this section and to those of section 6, be deemed to have commenced on the day on which the employee was first employed by that employer, but in the calculation of the employee’s entitlement to long service leave under this Act not more than 20 years’ continuous employment before the coming into operation of this Act shall be counted.

(emphasis added)

39      Applying Project and s 18 of the Interpretation Act, I find this construction gives best effect to the purpose of the LSL Act, which is to confer an entitlement to a paid period of rest (or a payment in lieu on termination of employment) to an employee who has given a long period of continuous employment.

40      I also find this construction supported by the Explanatory Memorandum, Industrial Relations Legislation Amendment Bill 2021 (WA) (Explanatory Memorandum), which assists in ascertaining the meaning of s 6 of the LSL  Act: s 19 of the Interpretation Act:

38. The Bill amends the LSL Act to:

a)  clarify the absences that do not break an employee’s continuous employment, and the absences that do and do not count towards the length of an employee’s continuous employment. This includes specific provisions relating to casual and seasonal employees, and apprentices;

b)  clarify existing provisions relating to the cashing out of long service leave;

c)  replace existing transmission of business provisions with transfer of business provisions, based on the FW Act transfer of business provisions;

d)  provide for increased flexibilities regarding the taking of long service leave;

e)  enable a long service leave entitlement to be enforced under s 83 of the IR Act and so ensure that contraventions attract a penalty consistent with the treatment of contraventions of other minimum employment entitlements; and

f)  repeal spent provisions.

…

575. Section 6(7) provides that, if an employee enters into a contract of employment with an employer within 52 weeks of completing their apprenticeship with the employer, the period of the apprenticeship is taken as part of the employee’s continuous employment.

576.  An apprentice is an employee as defined in existing s 4(1) and therefore service as an apprentice is part of their period of continuous employment. However, an apprenticeship is a training contract and, once completed, the training contract ends. Section 6(7) ensures that if the employee is subsequently employed under an employment contract with the employer, the service under the apprenticeship contract is part of their continuous employment.

(footnote omitted) (emphasis added)

41      The Explanatory Memorandum draws a distinction between amendments to the LSL Act that serve to ‘clarify’, ‘replace’, ‘provide for’, ‘enable’ and ‘repeal’: [38].

42      The Explanatory Memorandum makes clear that the amendments to the LSL Act ‘clarify’ that a period of apprenticeship does not break an employee’s continuous employment: [38]. This infers that a period of apprenticeship never broke an employee’s continuous employment.

43      The Explanatory Memorandum makes clear that as an apprentice is an employee as defined by s 4(1), a period of apprenticeship is part of their period of continuous employment: [576].

44      The Explanatory Memorandum also makes clear that the LSL Act is concerned with the employment relationship, as opposed to the employment contract: [576].

45      The Explanatory Memorandum makes clear that whilst an apprenticeship contract ends at the end of the apprenticeship, the period of employment under the apprenticeship contract is part of the employee’s continuous employment: [576].

47      I find that while the First Contract expired on the completion of the term covering Mr McCormick’s apprenticeship on 1 November 2017, this did not terminate his employment relationship with Arc Holdings. This is because, on 2 November 2017, his employment with Arc Holdings continued, as an Electrician. I find that there was no absence, break or interruption in Mr McCormick’s employment between the ending of the First Contract and the commencement of the Second Contract, for the purposes of the LSL Act. I find Mr McCormick’s employment under the First Contract is continuous with his employment under the Second Contract.

48      I find that this is the case even though Arc Holdings paid out Mr McCormick’s accrued but untaken annual leave entitlements at the completion of the First Contract. The payment of Mr McCormick’s annual leave accruals may have had the effect of ‘resetting the clock’ for the purposes of his annual leave entitlements, but not for determining his continuous employment under the LSL Act.

49      I find that Arc Holdings’ reliance on the principles of legality to support its submission that the LSL Act must cede to its common law right to contract with Mr McCormick, unless the LSL Act expressly states otherwise, to be untenable for the following reasons:

(a) Firstly, it is unclear that the imputed common law right to contract with Mr McCormick to terminate the First Contract, would fall within the category of principles, rights and privileges that have been recognised by courts: Pearce DC, Statutory Interpretation in Australia (9th ed, 2019) 5.60:

Personal Rights

• Infringing personal liberty
• Restricting right of community (liberty and association)
• Limiting freedom of movement
• Restricting right to assemble
• Challenging detention in custody
• Limiting re-entry of citizen to Australia
• Expanding the liability for deportation
• Removing right of refusal of blood test
• Stopping going about lawful business (random breath testing)
• Liming the bringing of an action for mental injury
• Requiring making of statutory declaration
• Restricting freedom of speech/expression
• Interfering with equality of religion

Criminal offences and rights at trial

• Removing requirement of intent to commit a criminal offence (men rea)
• Extending scope of penal statute
• Determining whether or not a person has committed a criminal offence is vested in courts exercising criminal jurisdiction, and not persons or bodies exercising executive power
• Limiting trial by jury
• Permitting Crown to appeal from acquittal of sentence
• Finality in imposition of penalty
• Removing mistaken belief as defence to criminal charge
• Using information obtained by means of telephone interception
• Permitting administration of interrogatories in criminal proceedings
• Requiring self-incrimination
• Requiring production of documents
• Permitting disclosure of information compulsorily acquired

Courts and procedure

• Restricting right to continue action once commenced
• Removing legal professional privilege
• Denying legal representation
• Denying natural justice/procedural fairness
• Making findings affection personal reputation
• Denying hearing before dismissal from office

Business rights

• Limiting ability to carry on one’s own business or trade
• Interfering with preparation of goods for sale and selling them
• Preventing acting by means of an agent
• Restricting right to enter into a legal contract

Property rights

• Excluding others from entry onto premises and other tortious conduct
• Permitting search for and seizure of property
• Interfering with vested property rights
• Alienating property without compensation
• Extinguishing native title
• Restricting fishing in tidal waters
• Limiting power to dispose of an interest in a lease
• Preventing subleasing of land
• Removing minority shareholders’ property rights and causes of action
• Restring rights to ground water

Miscellaneous

• Preventing navigation of a navigable river

(b) Secondly, it is trite to say that any common law right for an employer to contract with its employee is subject to compliance with law and public policy.

(c) Thirdly, s 5 of the LSL Act indicates that Parliament directed its intention to the question of abrogation of any common law rights of an employer to freely contract with its employee in relation to the LSL Act: Boulton, 125:

5. Limited contracting-out of long service leave

 An employer and an employee  may agree that the employee may forego his entitlement to long service leave under this Act if –

(a) the employee is given an adequate benefit in lieu of the entitlement; and

(b)  the agreement is in writing.

(d) Arc Holdings’ common law right to contract out of the LSL Act, only arises if it has satisfied both requirements in s 5(a) and s 5(b). Given Arc Holdings’ stance in these proceedings, it is plain that it did not provide Mr McCormick a benefit in lieu of his long service leave entitlement (s 5(a)).

(e) This means that the First Contract cannot and does not extinguish Arc Holdings’ obligations under the LSL Act to pay Mr McCormick pro rata long service leave on the termination of his employment.

Conclusion

50      For the preceding reasons, I find that Mr McCormick’s employment was continuous for the period from 23 October 2012 to 29 October 2020.

51      As Mr McCormick completed at least seven years of continuous employment, he was entitled to pro rata long service leave on the termination of his employment on 29 October 2020, pursuant to s 8(3) of the LSL Act.

52      Arc Holdings had an obligation to pay Mr McCormick his pro rata long service leave entitlement on the termination of his employment, pursuant to s 9(2) of the LSL Act.

53      Pursuant to s 84U(3) of the IR Act, Arc Holdings has the burden of proving that it has not committed the contravention of s 9(2) of the LSL Act.

54      Given that Arc Holdings has failed to do so, the compliance notice will be confirmed, and the claim will be dismissed.

C. TSANG

INDUSTRIAL MAGISTRATE