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Tasmanian Industrial Commission

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T4013

 

TASMANIAN INDUSTRIAL COMMISSION

Industrial Relations Act 1984
s.29 application for hearing of an industrial dispute

Bakery Employees and Salesmen's Federation of Australia
(Tasmanian Branch)

(T.4013 of 1992)

and

Bass Bakery

 

COMMISSIONER P A IMLACH

2 November 1992

Termination of employment - whether Sunday loading forms part of employees' weekly wage for the purpose of calculating redundancy payment

REASONS FOR DECISION

This was a dispute hearing application made under Section 29 of the Act by the Bakery Employees and Salesmen's Federation of Australia (Tasmanian Branch) (the Union). The dispute concerned the calculation of the weekly wage in a redundancy pay settlement between the Union and Bass Bakery of Burnie (the Company).

A redundancy agreement had been settled between the Company and the Union for a number of employees, but, the dispute had arisen because the Union claimed, for two of the employees, that, because they had worked on every Sunday, the weekly pay component of their redundancy agreement should reflect the Sunday penalty payment of double time.

The Union submitted that the weekly pay for redundancy purposes should be calculated on the same basis as annual leave pay which, in the Bakers Award (the Award) (as in many others) was prescribed as "... the amount of wages they would have received in respect of the ordinary time they would have worked had they not been on leave ..." - In other words, the Sunday pay should be included. The Union submitted that there was no difference between annual leave pay and redundancy pay for such calculations.

To assist in its submissions the Union produced two exhibits, one was a copy of a letter confirming the terms of the redundancy package settled with the Company and the other was a copy of a recent interpretation decision by the President of the Commission specifically about the amount of annual leave pay required to be paid by the Award.

The Union also said that it was unable to find any precedent as to how a "redundancy" weekly wage should be made up.

The Tasmanian Confederation of Industries (the Confederation) appeared for the Company and rejected the Union's arguments. The Confederation referred to the details of the redundancy agreement and noted that, in a number of areas, the agreement went beyond normal standards especially in the context of previous arbitral proceedings before the Commission.

In support of its submissions the Confederation quoted a decision of the Commission (Commissioner J King) in matter T.1676 of 1988. In the view of the Confederation that case established the need for the Commission to find that the employer had "acted in a harsh, unjust or unreasonable manner". The Confederation submitted that the employer had not acted harshly, unjustly nor unreasonably in this case, therefore, it was incumbent upon the Commission to refuse this application.

Put another way, the Confederation argued, the Commission should only intervene when it finds a purpose for so doing: in this case, the Confederation maintained, there was no purpose to be found and therefore there should be no intervention.

The Confederation disputed the Union's contention that there was a connection between the quantum prescriptions for annual leave pay and redundancy pay. The Confederation submitted that there was no necessary connection between the quantum of annual leave pay and the (weekly) quantum of redundancy pay, for example, in the case of annual leave the employment relationship continues which is not the case with redundancy.

The Confederation advised that, for 22 years service one employee had received under the redundancy agreement a payment of $19,642 and the other, for 18 years, had received $15,248 in severance payments, which were reckoned as fair and generous settlements.

The Confederation also advised the Commission that were the Union's claim to be accepted, the Company might review its agreement not to offset the redundancy payments against payments out of an employer sponsored private superannuation fund to the two employees.

The Confederation confirmed also that it had been unable to find a precedent case on this issue.

The reason the whole redundancy agreement had not been declared invalid by the Company, the Confederation said, was because the payment of monies (without the Sunday penalty amount) had been made before the Union sought the additional amounts.

In the first instance I do not accept that there is any established connection between the amount of annual leave pay and the (weekly) amount of redundancy pay. The Award clearly prescribes the amount of annual leave pay, but, it makes no reference at all to redundancy pay. Further, annual leave pay is determined by prescription whereas, ideally, the terms of a redundancy payment should be settled by agreement between the parties. I accept the arguments of the Confederation in this regard.

In the case where a redundancy pay has to be settled by arbitration the Commission will be aiming to arrive at a minimum and a maximum figure; in other words, not too much nor too little.

In this particular matter it seems to me that, even at the flat weekly rate of pay, the terms of the two redundancy settlements are in excess of what would have been decided if the whole matter of these redundancies was put in the hands of the Commission. That being the case the application is not granted. I decide that the flat weekly wage already paid in the redundancy settlement was sufficient and I decline to increase it to reflect the Sunday penalty rate.

 

P A Imlach
COMMISSIONER

Appearances:
G Strickland and P Nielsen for the Bakery Employees and Salesmen's Federation of Australia (Tasmanian Branch)
T Edwards for the Tasmanian Confederation of Industries
J Packham for Bass Bakery, Cooee

Date and Place of Hearing:
1992.
Hobart:
October 20.