T6540 (17 February 1998)
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TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 Chief Executive, Workplace Standards Authority RESTAURANT KEEPERS AWARD
Interpretation of award - Annual Leave clause - "continuous service" and its application to workers compensation absence - re-hearing consequent on decision of the Full Bench on appeal in matter T6795 of 1997, dated 14.4.97 - declaration that service not broken by workers' compensation absences when calculating annual leave entitlements REASONS FOR DECISION By order dated 14 April 1997 a Full Bench hearing an appeal against a declaration by me pursuant to section 43 of the Industrial Relations Act 1984, dated 6 February 1997, in matter T6540 of 1996 revoked that declaration and directed me to "rehear the subject-matter de novo". Accordingly the matter was relisted for 22 May 1997. Mr S Cooper, a legal practitioner, sought and was granted leave to appear as agent for the Australian Liquor, Hospitality and Miscellaneous Workers Union - Tasmanian Branch, and the Tasmanian Trades and Labor Council, organisations which had appeared in the matter at first instance. Mr G Williams and Mr S Gates appeared for the Workplace Standards Authority and the Tasmanian Chamber of Commerce and Industry Limited respectively as had been the case in the original matter. Mr G Williams outlined the circumstances of the actual case which had prompted the Authority to seek a declaration on how subclauses (a) and (c) of Clause 9, Annual Leave, of the Restaurant Keepers Award (the award) should be interpreted. He explained that the actual case concerned an employee working for a business which was an unlicensed restaurant/take away food outlet. The employee had commenced working with the business on 5 March 1991, and on 25 July 1994, as the result of a work related injury that day, commenced a period of workers' compensation absence. The employee remained on workers' compensation until 18 April 1996. On 24 April 1996 the employee accepted a lump sum settlement of her workers' compensation claim and signed a deed of release. Mr Williams said the parties agreed the employee lawfully terminated her employment. The Annual Leave clause is as follows:
Mr Williams submitted that in respect of the employee's annual leave entitlement there were two possible methods by which the entitlement could be calculated. He tendered Exhibit W.5, setting out the two methods which were:
Mr Williams addressed the dictionary meanings of the word "continuous" and "service", and dealt with the distinction between "continuous service" and "continuous employment" in the annual leave context. The award contained other references to "continuous service", Mr Williams said, specifically Clause 25, Parental Leave which contained a definition of the expression which applied only to that clause. He said Clause 34, Superannuation, also used the expression "continuous service". The expression was not defined in that clause. He referred me to judgments in other cases involving the distinction between continuous service and continuous employment, notably F C Bermingham v. C J Francis, Queensland Industrial Court (Matthews J, President) 4/8/75; Richard Affleck v. Evans Anderson Phelan (Pty) Ltd, Queensland Industrial Court, (Hanger J, President) 27/11/64. Mr Williams submitted that a declaration under section 43 required the President to interpret the award only. He said that the only body capable of interpreting the provisions of the Workers' Rehabilitation and Compensation Act 1988 was the Supreme Court of Tasmania and the President was not clothed with that authority by the provisions of the Industrial Relations Act. It was argued that if another Act has an effect on an award, as provided in section 42, then "it is under that legislation (the other Act) that a decision would need to be made as to (its) effect on the award".1 He said the President had no authority to interpret that effect and that the interpretation was limited by the Industrial Relations Act to the words contained in the award. In concluding his submission Mr Williams said that given his research he felt that an absence on workers' compensation could not be classed as continuous service for the purposes of the award. Mr Cooper disagreed with Mr Williams' observations in relation to section 42 of the Industrial Relations Act. He said that section 42 provided that an award had effect subject to the provisions of any other Act that dealt with the same subject matter. In that context he referred to sections 84 and 138A of the Workers' Rehabilitation and Compensation Act. In respect of the interpretation of section 84, Mr Cooper tendered two decisions of Cosgrove J, in the Tasmanian Supreme Court, Cannon v. Coats Patons (Australia) Ltd, 1985, and Foster v. Fonthill Pty Ltd, 1987, both of which dealt with the question of workers' compensation and annual leave entitlements. He said they were the only reported decisions he had been able to find on this point. The first case involved a worker who was injured in 1970 and became entitled to workers' compensation in respect of total incapacity. In 1974 the worker's employment was terminated by the employer and in 1975 her compensation payments were terminated. She did not receive the balance of her compensation until an agreement was reached on the subject in 1978. The question of payment for annual leave was reserved by that agreement. The employee claimed payment for the annual recreation leave she would have been entitled to if she had been at work at least until the time her workers' compensation payments were terminated. It was noted that the "award provided that she was entitled to a period of twenty-one consecutive days' leave annually after twelve months' continuous service"2. The matter was dealt with having regard to section 8C of the Workers' Compensation Act 1927. That provision was as follows:
Cosgrove J. found that "at the time of her injury the plaintiff was employed by the defendant and that the relevant contract of service was the award" [the award was not identified in the judgement], and that "the employee is entitled to be paid something in excess of the weekly payment due under the Act". His Honour said:
Mr Cooper submitted that Cosgrove J had before him an award employee and he had concluded that the employee was "clearly entitled to continue to accrue ... leave while she remained entitled to workers' compensation".4 In the other case referred to he said, Justice Cosgrove, amongst other things, relied on his previous judgment and found that a former employee was entitled to "holiday pay" calculated for the period that weekly workers' compensation payments would have continued. Mr Cooper said that section 42 of the Industrial Relations Act "enjoins the commission to have regard to other acts that apply to the same subject matter". Section 84 of the Workers' Compensation Act, he said specifically applies to annual leave, an award matter, and whether or not periods of workers' compensation absence are to be counted for annual leave purposes. He said that the decision in Cannon v. Coats Patons (Australia) Ltd was "directly on point"5 and determined that such periods are to be included when estimating annual leave entitlements. Mr Cooper went on to submit that there cannot be anything in an award about workers' compensation because workers' compensation is not an "industrial matter", being expressly excluded from the definition in the Act. Mr Cooper submitted further that I was not being asked to make a finding in relation to the employee's workers' compensation entitlements. He said the workers' compensation entitlements of the employee had been settled. Mr Cooper submitted that the decisions referred to by Mr Williams dealt with absences not authorised by the employer and he conceded that unauthorised absences "could not, in the ordinary course, count towards continuous service".6 He further submitted that the award does not constitute the whole of the contract of service between the employer and the employee. An implied term in the contract of service was that the employer must "have in place a policy of workers' compensation", to cover employees, he said. Any absence on workers' compensation, Mr Cooper submitted, was therefore an absence recognised within the terms of the contract of service. This point was illustrated, he said, by comparing a worker absent on sick leave with a worker absent because of a work caused injury. The former employee's absence would not affect continuity of service but the latter's absence would do so, which, according to Mr Cooper, exposed the "fallacy of any submission" that an absence on workers' compensation should affect an employee's continuity of service. The Commission was referred to section 138A of the Workers' Rehabilitation and Compensation Act, which, Mr Cooper said, provided that if a worker is incapable of working by reason of an injury in respect of which an employer is liable to pay compensation, the employer must, subject to certain provisos, for up to twelve months from the date the employee was incapacitated, make similar employment available to the employee. He said that recent addition supported his proposition that it was the intention of parliament that employment and service would continue in that case, even if for a given period of time. Mr Cooper urged me to adopt an interpretation that was the most beneficial to the worker and to declare that "continuous service" for the purpose of the Annual Leave clause should include any absence on workers' compensation. Mr Gates relied on Bermingham v. Francis, and on The Australian Rope and Cordage Workers Union v. A Forsyth and Co. Pty Ltd 51 CAR 794; Wire Workers Wire Fence & Tubular Gate Workers Union of Australia v. Rylands Bros. (Aust) Pty Ltd and others 53 CAR 180; Chard Affleck & Evans Anderson Phelan (Pty) Limited, Industrial Court of Queensland; and The Australian Journalists Assoc. v. Advertiser Newspapers Ltd 1982 A.I.L.R. 444 to support his contentions that:
Mr Gates emphasised that those responsible for drafting the award chose the words "continuous service" as opposed to "continuous employment" when the meaning of the expressions was "well recognised and understood in industrial jurisprudence". He referred the Commission to other provisions in the award which dealt with the concepts of service and employment. These included subclause 7(a) of the award, the definition of Introductory/Entry Level, which dealt with the number of additional hours which might "be served" at that level by mutual agreement. Clause 9(a) of the Annual Leave clause, Period of Leave, he said, showed that it was intended that "continuous service" would be "actual service", not employment. Clause 9(b), Proportionate Leave on Termination, referred to an entitlement "for each completed month of service" where the period of engagement is less than 12 months. He said that "whilst employment may be for 12 months .... there may be periods of absence" and that annual leave will not accrue in respect of those periods of absence because they are not regarded as service.7 Subclause 9(g), Pro Rata for Part-time Employees on Termination, also specifically referred to service, not employment, he said. He submitted that Clause 17, Full Week's Wages, required a full time employee to be paid for 38 hours per week for each week that the employee is ready, willing and available to work during the hours prescribed in Clause 20, Hours of Work. He said if an employee is on workers' compensation, that employee is not working and "therefore ... not performing service and therefore ... not entitled to payment".8 Clauses 32 and 34, Sick Leave and Superannuation, also referred to entitlements based on service as distinct from employment, and according to Mr Gates the award generally adopted a very clear and consistent line that distinguished between continuous service and continuous employment. Mr Gates submitted that I should not determine what the "provision ought to mean" as that was not permitted under the "rules of interpretation", and in that respect he referred me to the second guideline in President Koerbin's decision in matter T30 of 1985. He said the words in the award were clear and unambiguous. As to Mr Cooper's submission that the workers' compensation legislation was an implied term of the employment contract, Mr Gates argued that recent decisions of the High Court of Australia9 had determined that award clauses could not be imported into the contract of employment independently of the intentions of the employer and employee. He said that the workers' compensation legislation fell into the same category of statutory rights and obligations as an award provision and was not therefore part of the contract of employment. He too referred to the dictionary definitions relating to "continuous" and "service" and submitted that "service must be actual service to the employer and that absence is not service"10. Mr Gates submitted that where an "absence from service" occurred which was a paid absence under the award, continuity of service was not broken because the award specifically recognised such an absence. He said "terminations, strikes, or other unauthorised absences would break continuity as no agreement exists with the employer to not provide service".11 Further, he said unpaid absences "such as unpaid leave or extended leave with the express authorisation of the employer would not break continuity but would not count as part of service". Mr Gates further submitted that it was not for the Commission to interpret the provisions of the Workers' Rehabilitation and Compensation Act. He said that section 84 of that Act did not create an entitlement to annual leave nor did it deem workers' compensation absences to be service. It was simply, he said, a "provision pertaining to the taking of annual leave by an employee who is entitled to annual leave by virtue of the award". He said "it's the terms of the contract and it's the terms of the award which create the entitlement to the leave" 12, and he emphasised that section 84 did not create the entitlement. Further he said that the judgement in Cannon and Coats Patons was not "authority to say that the Act will entitle an employee to annual leave if the contract of employment says they are not going to get annual leave."13 If I were to leave aside Mr Cooper's submissions in respect of the effect of the Workers' Rehabilitation and Compensation Act on annual leave entitlements and in respect of the application of section 42 of the Industrial Relations Act, I would be satisfied, having considered the case precedents put forward by the other parties, that the award does not provide for employees, absent on workers' compensation, to count such absences as service for the purpose of calculating entitlements to annual leave. However it is clear from the cases referred to by Mr Cooper that the Supreme Court has established that the workers' compensation legislation of this State entitles an employee to annual leave or to receive a payment equivalent to annual leave based on any period an employee is absent on workers' compensation. Whether that payment is a payment due under the Workers' Rehabilitation and Compensation Act or the Industrial Relations Act is a matter upon which I am not prepared to rule. However, having regard to the intent of section 42 of the Industrial Relations Act and to the decision of Cosgrove J., neither of which I can ignore, I consider it would be inappropriate for an award of the Commission to purport to prescribe provisions which are inconsistent with an Act of Parliament dealing with the same subject matter, and certainly inappropriate for a declaration under section 43 to find that the award meant something that was in conflict with an Act of Parliament. In the circumstances I am not prepared to declare that the award requires something to be done or not to be done that is contrary to the requirements of the Workers' Rehabilitation and Compensation Act. Accordingly, pursuant to section 43 (1A)(a) of the Industrial Relations Act 1984, I declare that for the purposes of Clause 9(a) and (c) of the Restaurant Keepers Award, "service" shall not be broken by any period of workers' compensation absence during the time for which workers' compensation is payable and any such period shall be counted for the purpose of calculating annual leave entitlements under both those subclauses. It is recommended that one of the parties to the award make application in accordance with section 23 of the Act to vary the award to clearly indicate that workers' compensation absences are included when calculating service for the purpose of annual leave entitlements. F D Westwood PRESIDENT Appearances: Date and place of hearing: 1 Transcript p.36 |