Department of Justice

Tasmanian Industrial Commission

www.tas.gov.au
Contact  |  Accessibility  |  Disclaimer

T6540 (6 February 1997)

 

TASMANIAN INDUSTRIAL COMMISSION

Decision Appealed - See T6795

Industrial Relations Act 1984
s43 application for interpretation of an award

Chief Executive, Workplace Standards Authority
(T6540 of 1996)

RESTAURANT KEEPERS AWARD

 

PRESIDENT F D WESTWOOD

HOBART, 6 February 1997

Interpretation of award - Annual Leave clause - "continuous service" and its application to Workers Compensation absence

REASONS FOR DECISION

The Chief Executive of the Workplace Standards Authority pursuant to section 43 of the Industrial Relations Act 1984 has made application for the interpretation of Clause 9, Annual Leave, of the Restaurant Keepers Award with particular emphasis on the phrase "continuous service".

In particular an interpretation was sought as to whether absences on workers compensation affected "continuous service" for annual leave purposes.

Clause 9, Annual Leave, is worded in the following manner:

"9.    ANNUAL LEAVE

(a)    Period of Leave

    A period of 28 consecutive days' leave shall be allowed annually to an employee on weekly hire after 12 months' continuous service (less the period of annual leave).

    By agreement between the employer and the employee annual leave may be taken in more than one period.

(b)    Leave to be Given and Taken

    The annual leave shall be given and taken within a period of 12 months of such leave falling due and, except as provided in subclause (c) of this clause, payment shall not be made or accepted in lieu thereof.

(c)    Proportionate Leave on Termination of Service

    Where an employee on weekly hiring is engaged for a period of less than 12 months or whose employment is terminated within the period by the employer through no fault of the employee, or the employee lawfully leaves the employment, the employee shall be paid at the ordinary rate of wage as follows:

    twelve and two thirds hours for each completed month of continuous service.

(d)    Annual Leave Exclusive of Public Holidays

    The annual leave prescribed by this clause shall be exclusive of any of the holidays mentioned in Clause 19 - Holidays with Pay hereof, and if any such holiday falls within the period of an employee's annual leave, another day or days shall be added to that leave for each such holiday so falling.

    Where the holiday falls as aforesaid and the employee fails without reasonable cause, proof whereof shall be upon him or her to attend for work at his or her ordinary starting time on the working day immediately following the last day of the period of his or her annual leave; he or she shall not be entitled to be paid for any such holiday.

(e)    Calculation of Service

    Where the employer is a successor or assignee or transmittee of a business, if an employee was in the employment of the employer's predecessor at the time when he became such successor or assignee or transmittee, the employee in respect of the period during which he was in the service of the predecessor shall, for the purpose of this clause, be deemed to be in the service of the employer.

(f)    Payment for Period of Leave

    (i)     Employees other than Takeaway Service Attendants and Clerks

      All employees, before going on annual leave, shall be paid the amount of wages they would have received in respect of the ordinary time they would have worked had they not been on leave during the relevant period. In addition thereto, all employees, other than casual or part-time employees, shall be paid an amount equivalent to the minimum wage as prescribed in Clause 8 - Wage Rates, subclause 2 - Minimum Wage. Part-time employees shall receive a pro rata amount of the additional payment prescribed in this subclause.

    (ii)    Takeaway Service Attendants and Clerks

      (a) All employees before going on leave shall be paid the amount of wages they would have received in respect of the ordinary time which they would have worked had they not been on leave during the relevant period.

      (b) In addition thereto all employees (including part-time employees engaged to work 20 or more hours per week) shall receive a loading of 17 1/2 percent on payments made for annual leave as prescribed in subparagraph (a) hereof.

Such loading shall not apply to proportionate leave on termination of service.

(g)    Pro rata for Part-time Employees on Termination

    For the purposes of calculation, a part-time employee's payment shall be determined by: 

      average number of hours
      worked each week in the        X
      accrual period
                   38

      12 2/3 hours for
      each completed
      month of service

    For payment of annual leave to part-time employees the 10 percent loading shall be paid for all purposes. The pro rata loading outlined in subclause (f) of this clause shall also apply."

Mr Williams for the Workplace Standards Authority, said that the authority had been approached by the employer and a past employee to clarify the employee's entitlements on termination. The employee had commenced employment on 5 March 1991 and on 25 July 1994 had suffered a back injury at work. From that date until 18 April 1996 the employee had been absent on workers compensation. On 24 April 1996 the workers' compensation matter was settled by the payment of a lump sum; the employee signed a release and the employee, it was agreed, lawfully terminated her employment.

During her employment the employee had taken 13 weeks' of paid annual leave.

If the period of workers compensation absence was to be counted as service for the purposes of annual leave Mr Williams said there would be an accrual of 20 weeks and 12.66 hours; less 13 weeks taken, a balance of 7 weeks and 12.66 hours at termination.

Alternatively, if the workers' compensation period was not to count as continuous service, the total accrual would be 13 weeks and 12.66 hours; less 13 weeks taken, a balance of 12.66 hours at termination.

The Commission was provided with an assortment of dictionary definitions for the words "continuous" and "service"; referred to a number of cases in other jurisdictions which turned on the meaning of those two words; and comparisons were made with the use of those words in other clauses of this and other awards.

Ms Hudson, for the Australian Liquor, Hospitality and Miscellaneous Workers Union - Tasmanian Branch (the ALHMWU) an organisation with members subject to the award, submitted that an employee who was injured in the course of his or her employment and consequently received workers compensation during the period of recuperation was still being employed ".. by the employer on a continuous basis". (Transcript p.11) Further, she contended that the period of absence could be deemed to have been authorised by the employer. If the absence was authorised by the employer it should be accepted that the absence did not affect the continuity of service. Ms Hudson said Section 84 of the Workers Rehabilitation and Compensation Act 1986 provided that workers were entitled to annual leave whilst receiving workers compensation payments.

Mr Gates for the Tasmanian Chamber of Commerce and Industry Limited (the TCCI) relied on a number of case precedents which he said established what was meant by the expression "continuous service" and which made a clear distinction between a period of "employment" and a period of "service". It was submitted that for service to be continuous the employee was required to be available to serve the employer in accordance with the terms of the contract of employment. An absence not provided for in the contract of employment, which included the provisions of a relevant award, would break the continuity of service. He added that such a break might not have the effect of breaking the period of employment.

Mr Gates rejected the proposition that section 84 of the above Act should be taken into account in determining the annual leave due to the employee. He maintained that section 84 simply stated that in respect of annual leave an employee, even though absent on workers compensation, was entitled to whatever the award provided. He added that the purpose of this interpretation was to determine what the award provided.

However, Mr Gates said there was no specific recognition in the award to the effect that an absence on workers compensation would count for annual leave purposes and since the employee was unable to present for work and provide service in accordance with the contract of employment the absence could not count for annual leave purposes.

Ms Fitzgerald, for the Tasmanian Trades and Labor Council (the TTLC) submitted that the words "service" and "employment" when used as nouns were synonymous. She referred to section 84 of the Workers Rehabilitation and Compensation Reform Act 1995 and submitted that the Commission must give consideration to that section when interpreting the annual leave clause and its relationship to the workers compensation matters.

Section 84 of the Act is worded in the following manner:

"Paid holidays during incapacity

84(1) If during a period for which compensation would otherwise be payable to a worker under this Act there occurs any period during which the worker would be entitled, under the normal contract of service in force when the right to compensation occurred, to be absent from his or her employment on annual recreational leave on full pay -

(a) the worker must be given by his or her employer a similar period of leave on full pay in lieu of that annual recreational leave at some time within 3 months from the date of his or her return to work, or at the termination of his or her right to compensation under this Act if he or she does not then return to work; or

(b) if the worker so desires, the worker may, by arrangement with his or her employer, take annual recreational leave during the period of incapacity for which compensation is payable.

(2) If a worker takes annual recreational leave during a period of incapacity in accordance with subsection (1)(b), the worker is not entitled to receive weekly payments for compensation during that annual recreational leave.

(3) An employer must not attempt to cause or require a worker to take annual recreational leave during a period of incapacity for which compensation is payable.

Penalty: Fine not exceeding 100 penalty units."

Although it is not a matter for this tribunal to rule on it would seem to me that section 84 of the Workers Rehabilitation and Compensation Act can only come into effect once the employee's entitlements under his or her contract of service (or award) have been established. This application has been made in order to determine how the award should be applied in these circumstances. Once that has been established the Act can come into play.

The cases relied upon by Mr Gates have certain aspects to them which make it difficult to apply them directly to the circumstances of this case. In the Wire Workers matter1 the Commonwealth Court of Conciliation and Arbitration was dealing with an appeal from a decision by a Conciliation Commissioner which purported to allow striking employees to receive their annual leave entitlements which had been withdrawn by the employer. The matter was conducted having regard to the National Security (Industrial Peace) Regulations.

The majority decision of the Court as expressed by Kelly J. contained this introduction:

"The New South Wales awards referred to in the order under appeal confer rights to annual leave subject to the performance by employees of twelve months' continuous service. I am of opinion that continuity of service in this connexion is not synonymous with continuance of employment in the sense of engagement. So that, although it may be that by virtue of the National Security (Man Power) Regulations, an employee in a "protected" undertaking may not "terminate his employment", I think that he can, by his conduct in ceasing work without a legitimate reason, break the continuity of his service with his employer. By going on strike these employees broke the continuity of their service for the purposes of the annual leave provisions of the awards mentioned."

(Page 188)

Piper C.J. in the same matter confirmed that it had been "held by the N.S.W. Industrial Commission that `service' is the qualifying factor and not employment and that the two words are not synonymous". [Page 187]

The decision raises other considerations which might have application in this case, particularly the suggestion that if a "legitimate reason" existed for ceasing work, continuity of service might not be broken.

The Australian Rope and Cordage Workers matter2 also set against the background of National Security (Industrial Peace) Regulations, concerned the interpretation of the Annual Leave clause of the Rope and Cordage Workers Award which provided that any absence from work on account of sickness or accident up to fourteen days in any twelve months would be deemed to be part of continuous service. The court held that "unauthorized absences" were "breaches of continuous service". It is not clear whether authorised absences were considered to be those specifically provided for in the award or simply absences authorised by the employer.

In the Birmingham v. Francis matter3, Matthews J, President of the Queensland Industrial Court, held that "continuous service" in relation to long service leave entitlements meant service which was given in accordance with the contract of service without interruption. The distinction was made between "service" and "employment". In this matter Matthews J, and I paraphrase his decision, found that the contract of service established the days of work; that the employee had no other employer and worked uninterruptedly for the employer for all time in each week that he was required to perform his duties and that he was always available to perform them.

In Richard Affleck v. Evans Anderson Phelan (Pty) Ltd (1964) (57 Q.G.I.C. 408), referred to in the above matter, the President of the Queensland Industrial Court, Hanger J, also dealt with the issue of "employment" and "service". In relation to long service leave entitlements, section 17(3) of the then Industrial Conciliation and Arbitration Act of Queensland provided that an absence from work on leave granted by the employer "including such absence through illness or injury" would not interrupt continuity of service. He found that while such an absence did not break the continuity of service, nothing said that the period of absence was to be treated as service.

Given these precedents I am satisfied that "continuous service" for the purpose of this award means the uninterrupted provision of the employee's labour in accordance with the contract of service entered into between the employee and employer. In this case the contract of service is supported by an award, viz. the Restaurant Keepers Award. The employee was a full time worker and, subject to conditions in the award, the employer was to provide work for the employee for 38 hours per week. The employee was to be available to work for the employer for 38 hours per week.

It is not clear from the precedent cases discussed whether authorised absences from work were those identified in the relevant award or legislation, or whether the employer was in a position to authorise an absence which would not affect the continuity of service. However, having considered the words of the award I have concluded that it is the award which provides for those absences which do not affect continuous service. In this case compassionate leave, parental leave, public holidays and sick leave are provided for in the award and if granted, in my opinion, do not affect the continuity of service. No reference is made in the award to an absence on workers compensation or indeed any absence arising from work caused illness or injury, and accordingly I must conclude that such an absence is an interruption to the provision of continuous service to the employer and consequently does not count for the purposes of calculating annual leave entitlements. Indeed it might be argued that such absences break service completely requiring a fresh start at least for annual leave purposes, a situation which does not apply in the case under review.

Section 43 of the Industrial Relations Act 1984 requires the President, when application is made, to declare how a provision of an award is to be interpreted. In this case an interpretation is sought as to the emphasis to be placed upon the words "continuous service" as used in the Annual Leave clause and the effect an absence on workers compensation might have on the accrual of annual leave. The guidelines used by the Commission in interpretation matters require the President to attribute to the words under consideration, if they are clear and unambiguous, their generally accepted meaning. This case is one where the words in contention are in my opinion clear and unambiguous.

Accordingly, having considered the submissions of the parties and the material referred to in those submissions, I declare that Clause 9, Annual Leave, of the Restaurant keepers Award, subclause (a), Period of Leave, means that an employee on weekly hire is entitled to 28 consecutive days leave each year after having provided to the employer 12 months continuous service (less the period of annual leave). Continuous service meaning uninterrupted service in accordance with the award. Put another way, absences from work must be provided for by the award to avoid interruption to service.

The words "continuous service" have the same meaning in subclause (c), Proportionate Leave on Termination of Service.

Since absences on workers compensation are not provided for in this clause, I declare, pursuant to section 43 of the Act, that an absence on workers compensation interrupts continuous service for the purposes of Clause 9, Annual Leave, of the Restaurant Keepers Award.

I recommend the organisations with an interest in this award apply themselves to ensuring that the award contains provisions which reflect current practice and/or standards.

 

F D Westwood
PRESIDENT

Appearances:
Mr G J Williams for the Chief Executive, Workplace Standards Authority
Ms H Hudson for the Australian Liquor, Hospitality and Miscellaneous Workers Union - Tasmanian Branch
Ms L Fitzgerald for the Tasmanian Trades and Labor Council
Mr S J Gates for the Tasmanian Chamber of Commerce and Industry Limited

Date and place of hearing:
1996
November 7
Hobart

1 Wire Workers Wire Fence and Tubular Gate Workers Union of Australia and others v. Rylands Bros (Aust.) Pty Ltd and others (1944) 53 C.A.R. 180
2 Australian Rope and Cordage Workers Union v. A Forsyth & Co. Pty Ltd; re George Kinnear and Sons Pty Ltd (1944) 51 C.A.R. 794
3 F C Birmingham v. C J Francis (1975) Queensland Industrial Court (Matthews J. President)